In the field of cryptocurrency, NFT (non-homogenized token) trading platform, as an emerging market, has attracted the attention of many investors and artists. With the rapid development of blockchain technology, the NFT trading platform has become a promising profit channel. Many people have made considerable profits by trading NFTs. How to profit from these platforms? This article will delve into the common profit models and explain the business logic behind them through some typical cases.
1. What is the NFT Trading Platform?
NFT trading platforms are decentralized marketplaces that allow users to create, buy, sell, and exchange NFTs (non-homogenized tokens). These platforms utilize blockchain technology to ensure that each NFT is unique and tamper-proof. Common NFT trading platforms such as OpenSea and Rarible provide users with a smooth trading experience, where participants can create, buy, and sell a wide range of digital assets, covering areas such as art, music, and virtual real estate.
Through these platforms, users can not only make purchases as consumers, but also participate as creators and investors. The profit model of the platforms revolves around transaction fees, platform certification services, user creation incentives, and many other dimensions.
2. Common NFT Profit Models
2.1 Transaction spreads
The most direct way to profit is through trading spreads. This approach is similar to buying low and selling high in traditional financial markets. On the NFT trading platform, users can earn the spread by purchasing certain low-priced NFTs, then waiting for market demand to rise, and eventually reselling those NFTs at a higher price.
For example, some popular NFT programs (e.g., CryptoPunks, Bored Ape Yacht Club) start out at a low price at launch, but over time, market demand spikes and prices soar. Investors who are able to make early purchases and successfully resell them can often realize considerable gains.
2.2 Earnings through creativity
In addition to trading spreads, creating NFTs and selling them through the platform is also an important way to monetize. Artists, designers, game developers, etc. can convert their works into NFTs and sell them on the platform. Not only do the creators get a one-time income from the sale, but they can also set royalties through smart contracts and continue to benefit from each secondary sale.
For example, Beeple, a famous artist, has made huge profits by converting his digital artworks into NFT and successfully auctioning them. And some game developers have created their own profit model by selling virtual items, characters, etc. on the NFT platform.
2.3 NFT Pledging and Lending
On some NFT trading platforms, users can also earn by pledging NFTs. Specifically, users lend ownership of NFTs as collateral or pledge them on the platform to earn a certain amount of interest. This model provides another way for NFT holders to make a profit, especially when certain NFTs have a high market value, and there is a greater potential for pledge earnings.
For example, NFT lending platforms such as NFTfi.com allow users to use NFTs as collateral for cryptocurrency loans, further enhancing the liquidity of NFTs. Lenders, in turn, can earn interest by choosing the right NFTs to pledge based on market conditions.
2.4 Community governance and token incentives
Some NFT trading platforms also use a decentralized autonomous organization (DAO) model that allows platform users to participate in platform governance and decision-making. On these platforms, users holding platform tokens can participate in the direction of the platform through voting and other forms of participation, and receive rewards in the process.
For example, token incentive systems on platforms (e.g., Aavegotchi, Rarible's RAR tokens) issue token rewards based on user participation. By holding and using these tokens, users can enjoy various preferential treatment within the platform, such as reduced transaction fees and participation in exclusive NFT releases.
3. NFT Trading Platform Profitability Case Study
3.1 OpenSea
OpenSea, as one of the largest NFT trading platforms in the world, adopts the profit model of platform commission. For each successful transaction, OpenSea will collect a certain percentage of commission, usually 2.5%. In addition, OpenSea also provides NFT creators with a "royalty" function, which allows creators to set a certain percentage of commission for each resale, which is also a source of income for the platform.
According to 2023 data, the OpenSea platform had a monthly trading volume of over $1 billion, successfully attracting a large number of investors and artists. Its revenue comes not only from trading fees, but also from NFT distribution, creator royalties, and platform promotion on multiple levels.
3.2 Rarible
Rarible, a decentralized NFT trading platform, is primarily monetized through transaction commissions and token incentives. On the Rarible platform, both the platform and creators receive a portion of the commission from each transaction.Rarible has also issued its own governance token, $RARI, and users are rewarded with tokens for participating in platform governance and transactions. This tokenized incentive has attracted a large number of users to participate.
Through its decentralized model, Rarible has ensured a fair distribution of revenue between creators and the platform, while also successfully stimulating community participation and promoting the long-term development of the platform.
4. How can I improve my chances of monetizing my NFT trading platform?
4.1 Keeping abreast of market trends
To be profitable on the NFT trading platform, it is vital to understand market trends and popular programs. Investors need to track the platform's trading data on a regular basis to analyze market demand and trends of popular NFT projects. Artists and creators should also pay attention to the current popular art styles or creative themes and seize the opportunity to create.
4.2 Selecting the right NFT program
Whether you are investing in NFT or selling your work on the platform as a creator, it is important to choose the right NFT project. Investors are advised to screen quality projects based on NFT's scarcity, community activity, and future growth potential.
4.3 Flexible use of multiple platforms
In the NFT market, the user base and trading rules may vary from platform to platform. Therefore, the flexible use of multiple platforms for trading can increase exposure and improve profit opportunities. For example, investing in digital art NFT on OpenSea and posting your own creative works on Rarible combine the advantages of the platforms.
concluding remarks
The NFT trading platform offers investors, artists and developers a variety of profit opportunities. Whether it's through trading spreads, creating profits, pledging and lending, or participating in the platform's governance, each can help users make a profit in the NFT space. To profit in this market over the long term, investors and creators need to continue to learn, adapt to market changes, and capitalize on opportunities with precision.
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