Buying and Selling NFTs – All You Need to Know
For as young as it is, NFT trading has become a booming business. As the most successful NFTs got sold for tens of millions of dollars, it’s natural that many people want to hop on to the scene. So no matter if you’re a digital artist or an investor, this guide will cover how to buy and sell NFTs as well as many useful tips in the process.
How To Buy NFTs?
Most of the time, NFTs are bought with cryptocurrency, so the first thing you should do is set up a crypto wallet. Two of the most popular crypto wallets are Metamask and Coinbase Wallet. As for where to buy, OpenSea is the biggest NFT marketplace.
- Once you’ve visited OpenSea, connect your crypto wallet
- Click ‘Explore’ to start browsing through the NFTs. There are many categories: trending, art, collectibles, domain names, music, sport… You can add collections to watchlists to keep track of your favorite items
- Some items allow ‘Buy Now’ and some let you ‘Make Offer’. You can set your price along with an expiration date. The seller can choose whether to accept the offer or not.
- Once an exchange has finished, you can see the NFT appearing in the ‘Collected’ tab of your profile page as well as in your wallet.
2.5% of the transaction amount will go to OpenSea. There is also an account initialization fee for your first listing and gas fee. If the seller accepts an offer, they will be responsible for paying a gas fee. However, if the buyer chooses ‘Buy Now’ and buys it at a fixed price, then they also pay for the gas fee.
How To Sell NFTs?
As for artists and traders, it’s super easy to sell NFTs on OpenSea. As always, linking your crypto wallet is the default first step. The process for selling NFTs on OpenSea goes as follow:
- Click on ‘My Collections’ then ‘Create Collection’. On OpenSea, NFTs are sold within a collection so you have to make a collection first then add items into it.
- Choose a logo image, feature image and banner frame for your collection. These, along with the name, will be the first thing potential buyers see. There’s also an option to set a ‘Royalties’ which is a percentage going to you every time a buyer resells your NFT on the secondary market. However, this cannot exceed 10%.
- Now, click on your newly-created collection and choose ‘Add Item’. Set the name, picture, supply number (number of items that can be minted)… You can choose between Ethereum or Polygon blockchain. Polygon is faster and the seller/buyer doesn’t have to pay gas fee, but Ethereum is the more popular blockchain with more users
- Finally, you can choose your price either as a fixed amount or a timed auction.
9 Tips For Buying and Selling NFTs
Tip 1: Although many NFT-community Discord servers are useful for getting giveaways and airdrops, there are also a lot of scammers on them. So if you join a server, it’s best to turn off DMs so no scammer can lure you with their tricks.
Tip 2: Always do your own research before buying. Because the minting process on many NFT platforms is free, some NFTs are just spam copies of digital assets in the past.
Tip 3: If you’re an artist wanting to make money off of selling NFTs, have reasonable expectations and focus on growing your audience. People are often blindsided by the big numbers that a few NFTs manage to pull without noticing all the ones that nobody buys. Anyone can put an NFT on sale, the hard part is finding a buyer for it. So remember that most of the work has to be done behind the scenes, as in making a name for yourself to a wider audience.
Tip 4: Choose the supply number for your digital art carefully. Having many NFTs of the same digital asset can net you more sales but at the same time, scarcity is a big factor in the value of an NFT so many NFTs of the same digital file can reduce their own value. Find your sweet spot.
Tip 5: Understand that trading NFTs comes with a high level of risk. There is the volatility of Ethereum itself, and there’s also the volatility of the asset’s value. The NFT you bought may never be bought again at such a high price. Moreover, NFTs, unlike cryptocurrencies, are not easy to liquidate: you can’t just go exchange them for cash any time you want.
Tip 6: Some collections on OpenSea have a verified mark on them. This means either there is an uncommonly high traction around the project or that it represents a public brand. The decision to ‘verify’ a collection is solely at OpenSea’s discretion.
Tip 7: You don’t have to do a public listing if you already have a specific buyer in mind. OpenSea lets people do private listings as long as you know the recipient’s digital wallet address.
Tip 8: It’s a good idea to turn on email notifications for NFT marketplaces so you can be informed on important activities such as when a new offer is made on your listing. MetaMask won’t notify you about these things.
Tip 9: If you trade NFTs on the Ethereum blockchain, save your buy/sell for when the blockchain is less congested to save gas fee. Research has shown that Ethereum gas fee tends to be lowest on Saturday and Sunday, from 1 AM to 3 AM (EST).