Non-fungible tokens are nothing new. Despite the bear market, NFTs are one of the aspects of web3 that is still making waves at the moment. Considering this factor, it is not surprising that more people will be trooping towards this niche and looking to become part of it. Before jumping on this train, you must understand the different forms of NFT sales and everything it entails.
You can read about our review of non-fungible tokens to gain insights of what digital assets are about. Back to the issue of discussion, many newbies are rushing off to buy NFTs, many of whom are getting “burned” and losing money. This may be through NFT Scams or Rug Pulls. However, one aspect that is often the fault of enthusiasts is the lack of comprehensive information on how these sales work.
Different Forms of NFT Sales
Just like with NFTs, there are two different forms of NFT sales. They include buying from the project or other users. When buying from another holder, the process is pretty simple. The individual puts up his or her asset on a third-party marketplace at a particular price. To make a purchase, you simply have to pay the amount set by the intending seller.
When you are buying from the originating source, this is why things become very interesting. Unlike a retailer, initiating projects is not limited to external mining platforms. They can also sell their NFTs on an in-house marketplace. During first mints, these are the two ways digital assets may be put up for sale:
NFT auctions are no different from a garage or yard sale, and the process remains the same. The team sets a base price, and interested investors begin placing bids according to the set rule. This procedure will continue till the allocated time elapses, and the person who tabled the highest price wins.
Auctions are not a regular occurrence within the NFT space. They are mostly reserved for rare items like digital artworks and unique collectibles.
As the name states, these are the usual ways of purchasing non-fungible tokens. The items are put into categories, and each gets a price tag. Investors simply pay for their preferred asset, which is transferred to their wallets.
This is the most common procedure and works with almost every project, from tickets, blockchain gaming accessories, and artwork to music and videos.
While these are not necessarily different forms of NFT sale, it is also vital to highlight them as variations. They are mostly regular merchandising events. However, the system works like a lottery. Such that nobody knows what they purchase till the exercise is over.
It is mostly blockchain gaming projects that adopt its method. It makes the initiative more exciting. Meanwhile, there are hardly any shady schemes. This is because blockchain also ensures transparency. Take Nakamoto Games using the Chainlink VRF to distribute NAKA Punks NFTs as an example.
Other Things to Consider When Participating in the Different Forms of NFT Sales
Besides the different forms, there are other factors that you need to consider before participating in NFT sales. This will help you prepare better and get the deal done.
Gas Fees: Most often than not, buyers are usually the ones who pay for gas fees. This may involve the minting of the NFT or the cost of transferring the asset to your wallet. Ensure you understand you ascertain the price of doing so. If possible, confirm if there are multiple blockchains that you can use in channeling the non-fungible token to your wallet. This is because some chains offer cheaper charges.
Token of Payment: It is not unusual that the token for paying gas fees differs from the cryptocurrency you trade in for the NFT. Before participating in any sale, ensure you know what is obtainable. You may need to obtain more than one coin. You should have a bit more than the price of the NFT you wish to buy in your wallet.
Platform of Sale: This is where things can get tricky, and people fall victim to scams. It can be on an in-house marketplace. This makes the process simple and ensures that buyers get to purchase only authentic assets. With an external NFT marketplace, investors have to take extra caution.
Do not use any link besides what the project provides. Also, avoid just scrolling through OpenSea or any third platform by yourself in search of the listing. Many dubious persons have been known to pirate original projects and list them for sale. Following the official instructions is an effective way to protect yourself.
It is easy to get lost when you do not have adequate information about something. This is the clear case in a very young niche like NFTs. However, understanding the different forms of NFT sales is an excellent start to protecting yourself. This guide can help you take advantage of the opportunities within this industry.