royalties

5 ways to monetize your digital art with NFTs

Monetizing digital art with NFTs provides proof of ownership, increased value and potential for royalties.

Nonfungible tokens (NFTs) offer a new way to sell and distribute digital art, and they have the potential to unlock new revenue streams for artists in the digital age. Here are five ways to monetize your digital art with NFTs.

Fractionalized ownership

This involves splitting the ownership of an artwork into smaller parts and selling them as tokens, allowing multiple investors to own a stake in the artwork. For example, an artist can create 100 tokens for a piece of art and sell them to 100 different buyers, each of whom owns a share of the artwork.

Related: How do you assess the value of an NFT?

Dynamic NFTs

Dynamic NFTs are a type of NFT that changes over time, creating a unique and evolving experience for the owner. Dynamic NFTs can use external data sources to update the artwork, such as social media feeds or actual occurrences. 

For example, “The Eternal Pump” is a dynamic NFT that changes in response to the rise and fall of the cryptocurrency market. The artwork gets more complex and elaborate as the value of cryptocurrencies rises, while it gets more straightforward and abstract as their value falls. Because they allow viewers to follow changes to the artwork and see it develop over time, dynamic NFTs can bring a new degree of involvement and engagement to collectors.

Dynamic NFTs can be monetized via auction, where collectors can bid on them, and the highest bidder takes ownership. Dynamic NFTs that are highly sought after, due to their unique features and evolving nature, can command high prices at auction. Additionally, using subscription-based systems, artists can offer collectors exclusive dynamic NFTs for a fee. These NFTs might vary frequently, offering subscribers a steady stream of fresh content.

Royalties

NFTs can be programmed to automatically pay the artist a percentage of the sale each time the NFT is resold on a secondary market. This allows artists to continue to profit from their work even after the initial sale. For example, the digital artist Pak sold an NFT called “The Fungible” for $502,000, and the NFT was automated to pay the artist a 10% royalty on every subsequent sale. Since then, the NFT has been resold multiple times, and the artist has earned over $2 million in royalties.

Gamification

This involves creating interactive nonfungible tokens that users can play with or use in games. For example, Axie Infinity is a game that uses NFTs as game assets, with players able to buy, sell and trade them to build their game characters.

In addition, NFTs can be given as rewards for achieving particular goals or activities in a game or app. For instance, a fitness app may offer nonfungible tokens to users who reach their daily workout targets.

Related: What is STEPN (GMT)? A beginner’s guide on the Web3 lifestyle app

Physical asset tie-ins

Physical asset tie-ins with NFTs involve linking a physical object to a unique digital asset, typically using a unique identifier or code. This can provide a way to verify the authenticity and ownership of the physical object, while also allowing for the transfer of ownership and value of the associated digital asset.

That said, an NFT can be used to represent ownership of a physical asset, such as a piece of real estate or a car. For instance, a company called CarForce is developing NFTs that reflect ownership of high-end automobiles, with the NFT serving as a digital car key that permits the owner to enter and operate the actual automobile. 

Related: What is tokenized real estate? A beginner’s guide to digital real estate ownership

Bored Apes founders propose new model for NFT creator royalties

The BAYC founders want an NFT creator royalties model that ensures transferring NFTs between wallets remains free and encourages creators to remain within the NFT ecosystem.

The founder of Bored Ape Yacht Club (BAYC) has weighed in on the ongoing nonfungible token (NFT) creator royalties debate and shared a potential path forward that they believe best deals with the issue.

A Nov. 8 blog post from BAYC co-founder Wylie Aronow — co-signed by co-founders Greg Solano and Kerem Atalay — shared that they regard creator royalties as “the single most important factor that brought them [creators and artists] into the ecosystem.”

The post was in response to OpenSea’s Nov. 6 announcement that it would follow other NFT marketplaces on royalty enforcement, which Aronow said shows its intent “to move with the rest of the herd and remove creator royalties for legacy collections from their platform,” and opined this move was “not great,” adding:

”For as much as NFTs have been about users truly owning their digital assets, they’ve also been about empowering creators.”

In response, the BAYC founders proposed a model for NFT royalties that uses “allow lists” coded into an NFT collections smart contract, which permits NFT trading between regular wallets but only allows NFT trading for “marketplaces that respect royalties.”

A basic version of how this would work was explained, with the first step being to check if the wallet is a regular wallet or a smart contract making the transfer request.

Regular wallets would have transfer requests allowed, while transfers initiated by smart contracts are checked against “an oracle of contracts that are known to respect royalties,” with the requests approved if a match is found.

This model would allow free wallet-to-wallet transfers, which the BAYC founders emphasize is a must to ensure one of the core benefits of NFTs — asset ownership — is acknowledged, with owners able to move assets between wallets without fees.

Related: NFTs are the key to turning passive fandom into an active community

The BAYC founders acknowledge that this model does still carry trade-offs, citing allowlist maintenance and an increased barrier to entry for new marketplaces, but said that for now, this allowlist is relatively small, noting:

“To start with, there are only a handful of known good actors today. Starting the allowlist is easy–just add those couple marketplaces that pay creator fees. Done.”

Allowlist maintenance is what they see as the more challenging issue, particularly the make-up of the governing body, adding:

“The real work is just in figuring out what this governing body looks like. But I think that’s a solvable problem for the NFT ecosystem to take on.”

In a Nov. 8 tweet, popular NFT artist Mike Winkelmann, known as Beeple, applauded the post as a great way to protect creator royalties as many NFT marketplaces move away from them.


Nifty News: LooksRare the latest NFT market to sack royalties, Twitter’s tweeting tiles and more

LooksRare joins the lineup of NFT marketplaces that have abandoned default creator royalties but says its replacement solution is “competitive.”

Nonfungible token (NFT) marketplace LooksRare is the latest in a string of NFT markets to do away with enforcing creator royalties by default, following the likes of Magic Eden and X2Y2.

The platform tweeted on Oct. 27 that it would not be supporting creator royalties by default, instead choosing to share 25% of its protocol fees with NFT creators and collection owners. Buyers can still choose to pay royalties when purchasing an NFT but it will be on an opt-in basis.

Explaining the changes, it said 0.5% of its 2% protocol fee would go to collections, as long as that collection has a receiving address for the funds.

LooksRare said the willingness of buyers to pay royalties has “eroded” as a result of many NFT markets now moving to a zero-royalty model adding that these disadvantage creators by removing a source of passive income

For this reason, it says it wants to create a “competitive solution” through its fee-sharing model with creators.

The reaction from the community was mixed, with some praising LooksRare for the revenue sharing model, but well-known Twitter NFT statistician, the aptly named NFTstatistics.eth, said he doesn’t see the benefit.

“The average royalty paid is around 6%” they tweeted, “I wouldn’t say that giving artists 0.5% […] is a competitive solution that benefits creators.”

“I do get that everyone is trying to survive in this race to the bottom,” he added.

Twitter’s testing token tweeting tiles

Twitter’s development team announced on Oct. 27 that it’s testing “NFT Tweet Tiles” with some links to NFTs showing on the platform with a larger picture along with details of the NFT and the name of its creator.

Supported NFT marketplaces, for now, include Rarible, Magic Eden, Dapper Labs and Jump.trade. It comes after the platform rolled out NFT profile pictures in January, but only for its paid subscribers on Apple iOS.

The new feature could be a move to appease its most active users, as leaked internal Twitter documents show it found the topics of interest among English-speaking heavy users of the platform have shifted over the last two years, with one of the highest-growing topics now being cryptocurrencies.

There are also circulating rumors that Twitter is developing a crypto wallet, but so far, the claim hasn’t been backed by evidence nor confirmed by Twitter. Regardless, speculation abounds that it could be in the works with the takeover by crypto-friendly Elon Musk.

EPL lines up $35M NFT deal with Sorare

The top English men’s professional soccer league — the English Premier League (EPL) — is working on signing a nearly $35 million, or 30 million British pounds, NFT deal with Ethereum blockchain-based fantasy soccer game Sorare, according to Sky News.

Sorare is a fantasy soccer league trading card game where players buy, sell and trade NFTs player cards to manage a team. The team can then enter contests and earn in-game points based on the actual on-pitch performances of the corresponding players.

The EPL will hold discussions with its 20 clubs regarding the reported multi-year contract on Oct. 28. The deal will allegedly focus on static images of EPL players assigned to NFTs, which of course, will allow fans to buy, own and likely trade them.

In March, it was reported that the EPL tapped blockchain firm ConsenSys for an NFT deal allegedly valued upward of $300 million. Still, Sky News reports that a slide in NFT prices had ConsenSys renegotiating to lower the price of the agreement, which made Sorare’s offer more attractive to the league.

A separate deal between the EPL and blockchain developer Dapper Labs is reportedly also under discussion.

New NFT market gains on leader OpenSea in 24-hour trading volume

The new NFT marketplace and aggregator Blur hit a record high of 1,610 Ether (ETH), around $2.5 million, in 24-hour trading volume on Oct. 26, according to Dune analytics, placing it only behind the largest marketplace, OpenSea.

It topped its rivals LooksRare and X2Y2 in terms of market share on the day, taking to Twitter to celebrate the milestone.

The Ethereum-based platform launched a beta version on Oct. 19 with an airdrop of its native token BLUR to anyone who had traded NFTs in the last six months. It says it targets “pro traders” and offers no trading fees and optional royalties.

Related: TV streaming providers should start relying on NFTs

On the same day, NFT marketplace X2Y2 tweeted that it would like Blur “to stop using our listings on your website” and subsequently blocked Blur from its platform, claiming it violated X2Y2’s terms by using multiple application programming interface (API) keys.

More Nifty News

NFT marketplace myNFT will showcase its first-ever physical NFT vending machine at the NFT.London event slated for Nov. 2–4. It will allow eventgoers to buy an NFT by purchasing a displayed envelope, scanning a code to create a myNFT account and receiving the NFT in their newly created wallet.

Monkey Drainer, the pseudonym of an alleged phishing scammer, has reportedly stolen $1 million worth of ETH so far this week through creating copycat NFT minting websites, and its possible the scams may have stolen over $3.5 million in total so far.