Updated: Mar 10, 2021
There's been wonderous innovations created by the surge of popularity in blockchain. Of course this includes decentralized finance (DeFi) and cryptocurrencies such as bitcoin. However, a very niche market is growing by leaps and bounds: Non-Fungible tokens (NFT). These are tokens that are totally unique, often representing digitally scarce goods such as pieces of art and collectibles. By existing on blockchain networks such as the ones propagated by Ethereum, NFTs can be easily verified as unique and scarce. In addition, ownership of NFTs can also fight copyright infringement. The most famous use of NFT technology is Cryptokitties, in which you could breed and collect virtual kittens. It was so popular back in the day, it nearly brought down the Ethereum network. In fact, at one point, a beautifully designed digital kitten sold for around $170,000! Selling NFTs is the most common way to make money, but this post will show you other ways, including within decentralized finance.
There are multiple ways to make money selling Non-Fungible Tokens. The most common way is selling them directly to users. Besides Cryptokitties, examples also include digital land in Decentraland, digital art on Nifty Gateway and scarce digital goods sold to players by video game publishers. For instance, in 2019, publisher Epic Games made over $4 billion by selling a digital item called "skins."
Another way to generate revenue selling NFTs is through secondary fees. Video game publishers do it all the time, with fees going as high as 99%. Transaction fees are also a healthy source of revenue. As this niche market grows, these fees should climb much higher.
Make Your Own NFT Art Using Rarible
NFTs are growing ridiculously fast now. Just last month, the major auction house Christie’s sold a digital portrait of the Bitcoin code “Block 21” for over $130,000! Both physical art and NFT, "Block 21" was created by Ben Gentilli and is meant to represent Satoshi Nakamoto’s vision, “forged out of the very code that lies at the genesis of it all."
To create your own NFT masterpiece, use the platform rarible.com. Rarible.com is a social community, marketplace, and an application to create Ethereum-based NFT digital art. You'll still need to create the art elsewhere, but once you're done, it's quite easy to upload it (as a JPG, PNG or GIF file) and press the “create collectible” button on the top right side of the screen.
Rarible then offers us two choices. Choose "single’" if you want your collectible to be entirely unique and one of a kind. Choose "multiple" if you want to sell more than one copy of this collectible. The final steps include picking a name, a description and a price. You can even add royalties so that you can profit if your buyer sells your art a second time. Royalty fees of 30% are not unheard of. When this "minting process" has been completed, your NFT will be available on the Rarible marketplace. Other collectible marketplaces include Opensea, Knownorigin, Nifty Gateway, and Makersplace.
Use Non-Fungible Tokens in DeFi
DeFi (Decentralized Finance) is a hot topic lately, becoming the center of attention in the financial world. Many experts believe mass adoption of DeFi is just around the corner. Nonfungible tokens is a sector that's fast gaining ground within the DeFi market. Similar to the way stablecoins represent fiat currencies like the dollar, NFTs can represent collectibles, digital goods and even real estate. So why not expand the market of collaterals used in DeFi lending to NFTs?
DeFi platforms like Crypto.com require collateral before it can lend you money. This collateral is usually in the form of cryptocurrencies like Ethereum (ETH). With the introduction of NFTs, one can now put other types of digital assets as collateral. For example, an artwork or a real-estate property can be tokenized as NFTs and be put up as collateral to secure a loan. Watch the video below for an in-depth explanation.