How Do NFT Marketplaces Make Money?

NFT marketplaces sell NFTs or non-fungible tokens. These digital art pieces, collectibles, or other digital assets use ethereum blockchains to create unique objects for the buyer. NFT marketplaces, like Opensea and Rarible, allow buyers to purchase their own NFTs easily. 

How do NFT Marketplaces Work?

NFT Marketplaces allow users to purchase NFTs from digital artists. NFTs on these websites come from various mediums, including videos, still images, trading cards, video games, online real estate, and gifs. 

On these NFT platforms, users connect their crypto wallets and use Ether currency to purchase NFT art. 

Some of the most popular online marketplaces for purchasing NFTs, include Functionality and Super Rare. Each site contains different types of digital collectibles, depending on their niche. Some NFT marketplaces, like Opensea, sell just about every kind of digital asset a user could want, even domain names. Others only sell one particular type of collectibles, like Enjin, which exclusively sells gaming NFTs. 

NFT marketplaces either sell for a fixed price or have bidding that works similar to eBay. 

Gas Fees

Fees are one of the most significant ways that NFT marketplaces make their money. 

Gas fees are an essential fee to understand if you are buying NFTs. The gas fees come from the amount of money that an NFT marketplace has to spend to produce a transaction or create a smart contract. The specific price comes from the computation power required to finish the purchase. 

Miners have to solve unique problems for the technology to work, and once they find the solution, the transaction is processed and added to the blockchain. Solving these complex problems requires a lot of energy, so sites charge the buyer or seller an extra fee. 

In ethereum, Gwei is how sites measure gas prices, and they denote a unit of gas used in the minting process. 

Commission and Posting Fees

Many NFT marketplaces charge sellers a commission or posting fee to put their products up for sale. The commission is a set percentage of the amount of money taken by the site when they sell an NFT. For example, 2.5% is a standard rate in the NFT market. So, if an item sells for $100, the site takes $2.50, and the creator earns $97.50. 

Commission rates of popular NFT marketplaces:

• Rarible – 2.5%
• Nifty Gateway – 5% of secondary sales and $0.30
• Opensea – 2.5%
• Super Rare – 15

The percentage is sometimes higher for large purchases, like the sale of Beeple’s “Everydays: The First 5000 Days” for $69 million. Christie’s took between 12% and 14% from Beeple’s final sale.

T-Bonds

NFT T-bonds are like a crypto version of the Government of Canada Bonds or US Treasury Bonds, which they are named after. Users buy them with cryptocurrency, like bitcoin, at a fixed price which will mature over time. 

The T-bond issuer sells the bond at a discounted rate to gain money. Later, after a certain period, the issuer must repay the buyer what the bond is worth. T-bonds are like loans that are on blockchain technology and only exist in a digital wallet. Of course, even though they’re only digital, a purchaser can use them to buy new things once they’ve matured, like digital artwork. 

So, like government bonds, both the issuer and the buyer gain from the bond. 

Subscriptions

Finally, some sites have created subscription-based features to make money. Users can pay for certain features, such as: 

• Being able to see the most valuable digital items for sale
• Daily summary emails 
• Pay to view certain NFTs