With this month’s Sandbox guide focusing on creating NFTs, this issue of Tools aims to provide a quick comparative overview of some of the NFT marketplaces mentioned in the guide: OpenSea, Rarible, OneOf, and NiftyGateway. Before diving into these platforms, remember that there are a few important top-level decisions to make, and key things to understand:
- There are many different NFT platforms, which operate on multiple blockchains – and thousands of cryptocurrencies operate in this ecosystem. But there are some very common ones to use.
- Thus, consider which community the artist’s fanbase belongs to when choosing a platform. Which cryptocurrency do they own? Are they early adopters of crypto or would they more likely buy via traditional methods like credit or debit cards?
- “Gas fees” – the fees associated with buying and creating NFTs, and attaching them to the blockchain – are determined by supply and demand, can be costlier than you think, and fluctuate heavily according to network usage.
- There are many different crypto “wallets” – where you store both your cryptocurrency and NFTs – available to use, which all have different features. But again, there are some very common ones to use.
- One draw of NFTs is that the creator gets paid again when they are sold on – 5% to 10% of the secondary sales price is considered a standard royalty payout.
OK – let’s compare some of these platforms – and again, if the jargon seem a little complex – check out our Guide, which is designed to make this much clearer.
OpenSea bills itself as “the world’s first and largest NFT marketplace”.
- Supported blockchains: Ethereum, Polygon, Klatyn
- Compatible wallets:MetaMask, Coinbase Wallet, TrustWallet, Portis, Fortmatic/Magic and many more
- Cost to use: When first starting to sell on OpenSea, there are two one-time transactions.
- To initialise your account for making sell orders, which only needs to be done once for your account
- To allow OpenSea to access your item (or all items in the collection, if the collection supports it) when a sale occurs. This may be needed if the item you are listing was not minted on OpenSea – but instead through a custom NFT contract. If this is your first time listing an auction, you will also need to approve WETH for use. WETH (Wrapped ETH) is an “ERC-20 token” – equal in value to ETH, that allows users to make pre-authorised bids that can be fulfilled at a later date without any further action from the bidder
- Sellers do not have to pay “gas fees” [i.e. system fees] to “mint” [i.e. create] each individual item – until the item is sold. This is known as “lazy minting”, as opposed to minting NFTs upon listing them. There are also gas fees payable when the item is sold – and who pays the fees depends on the transaction:
- Revenues: OpenSea charges a Service Fee of 2.5%. Creators can set a creator earnings percentage of up to 10%, which they receive every time the NFT is resold on the secondary marketplace. Note that creator earnings also apply to primary sales (sales by you).
- For example, if you set a sale price of 1 ETH and have a creator earnings of 10% on the collection, you’ll receive 0.875 ETH from the sale (2.5% goes to OpenSea and 10% is in the creator earnings amount) and then 2-4 weeks later, you’ll receive the 10% creator earnings amount (0.1 ETH).
- With OpenSea’s Service Fee of 2.5% and a Creator Earnings of max. 10%, the highest percentage that can be deducted from an NFT sale on OpenSea is 12.5%.
- Artists / music clients who’ve used the platform: The Weeknd, The White Stripes, Duke Dumont
- Advantages: Many different payment options, charging some of the lowest fees overall, lazy minting available
- Disadvantages: Security issues. For example, OpenSea has recently been battling with plagiarised NFTs, which should be noted.
Rarible says that it wants to become “the most accessible and user-friendly platform for digital items”.
- Supported blockchains: Ethereum, Flow, Tezos, Polygon
- Compatible wallets: MetaMask, Rainbow, Coinbase, Fortmatic, Portis, and more.
- Payment methods: debit card, credit card, ETH, FLOW, XTZ, MATIC
- Cost to use: there are two fees associated with creating an item for the first time on Rarible:
- Approval transaction: The approval transaction is standard on the Ethereum network and gives your wallet permission to interact with Rarible. (This fee happens once per smart-contract type)
- Mint transaction: The minting transaction is a contract interaction that puts the file on IPFS & Ethereum. (The process that puts the work ‘on-chain’)
Fees depend on the blockchain and your chosen minting option. For example: Ethereum tends to have higher fees, while the Flow blockchain is cheaper to mint on. You also have the option to create NFTs for free, where the buyer pays the “gas fee” for the NFT to be written to the blockchain.
- Revenues: when transacting an NFT, Rarible takes 2.5% on the buyer side and 2.5% on the seller side from every sale happening on the marketplace. As a creator, you can set your royalties when you mint your NFT, which is typically between 5-10%. You will receive this royalty into your wallet every time your NFT sells.
- Advantages: lazy minting available, simple to use marketplace, sellers and buyers are rewarded RARI tokens with Rari token holders being able to vote on proposals that affect the platform.
- Disadvantages: a service fee charge to both seller and buyer.
OneOf claims to be the “most inclusive NFT platform” due to the accessible pricing of its NFTs and various payment options. It also claims to be an eco-friendly NFT option, although other platforms, like Serenade, make similar claims about their low carbon footprint.
- Supported blockchains: Tezos
- Compatible wallets:MetaMask is not compatible, you need a wallet that supports Tezos FA2 e.g. Trust Wallet.
- Payment methods: debit card, credit card, XTZ (a native cryptocurrency for the blockchain Tezos), BTC and ETH prepaid options available later in the year.
- Cost to use: The first time you prepay in ETH or any other ERC-20 tokens, however, requires a one-time “wallet gas fee” to deploy a smart-contract and receive your payment securely. OneOf uses Wise for payment processing. There is a $5 USD transaction fee for each financial transfer to your Wise Account.
- Revenues: The Resale Royalty is a small % of the sale price that goes back to the artist or creator of the NFT. Every time the NFT changes hands on the OneOf Marketplace, the artist receives a % from the sale (usually up to 10%)
- Artists / music clients who’ve used the platform: Grammy Awards, Doja Cat, John Legend, Alesso, The Kid LAROI
- Advantages: OneOf claims Tezos uses over 2m times less energy than other proof-of-work blockchains, Tezos is affordable to mint, collect, and sell, OneOf has a focus on music alongside sports/lifestyle, runs an Emerging Artist Spotlight Program
- Disadvantages: The Tezos community is not quite as large and active as the ETH community (yet).
NiftyGateway’s USP is exclusivity: you need to apply to be able to sell an NFT on the platform.
- Supported blockchains: Ethereum
- Payment methods: debit card, credit card, Gemini Balance, prepaid ETH
- Compatible wallets: You’ll need a wallet that’s compatible with ERC-721 Ethereum tokens. There are many on the market, including Lumi Wallet, Trust Wallet and imToken.
- Cost to use: According to the company, there are no gas fees on NiftyGateway as they run on a custodial system. Collectors will be liable for gas fees when:
- Depositing NFTs into Nifty Gateway
- Purchasing an NFT with Prepaid ETH
- Withdrawing Prepaid ETH
- Revenues: The platform takes 5% of the NFT sale price in fees and taxes + 30 cents to cover transactions fees. When the NFT is sold on the secondary market, the original artist receives a 10% royalty.
- Artists / music clients who’ve used the platform: Grimes, Deadmau5, Carl Cox, Li Yachty
- Advantages: Elevate artist branding via exclusivity of the platform, easy user interface
- Disadvantages: Higher service fee compared to other marketplaces
Intrigued? Ready to create your NFT? Here’s Music Ally’s NFT archive.