How Much Does Minting an NFT Cost?

Bull or bear market, 2020 and 2021 will forever be cemented in NFT history.

Reports have shown that NFTs garnered the most profit ($17.7 billion) in the crypto space in 2021 – the market exploded by over 20,000 percent from the year prior. The total value of transactions jumped from $82.5 million to over $17 billion. 

However, the times are changing– namely, the technology behind NFT platforms and various mechanisms is improving significantly. 

Today, we’re going to explore NFT minting– how much does it cost to mint an NFT today, and how will this be different in years to come? Read along as we explore what “minting” an NFT is and more. 

What Does Minting an NFT Mean?

A common misconception about NFTs is that people often confuse minting NFTs with buying NFTs. There’s a fundamental difference. Minting an NFT means creating something completely new on the blockchain. 

It’s ‌converting a digital file into a digital asset that lives on the blockchain, whether that asset is digital art, music, or collectibles like sports and trading cards. However, it’s not like the blockchain is hosting the files for the NFT itself– that would cause the blockchain to become incredibly bloated and inefficient.

Remember, an NFT is just a token; this token represents the ownership of a specific digital asset. It’s not the screenshot of the Bored Ape Yacht Club that’s valuable; it’s the token. 

Minting an NFT means publishing your unique token on a blockchain to make it purchasable by other people. 

NFTs are minted on a blockchain. Ethereum’s blockchain is very popular for minting NFTs, including Solana, Cardano, Tezos, and more. 

You can buy NFTs on a marketplace like OpenSea– and sometimes, these platforms will also allow creators to mint their NFTs. 

However, many projects will first launch on a third-party site dedicated to the minting of the project; the fees you can expect to pay are usually only those for the network, which can be a princely sum themselves.

How Much Does OpenSea Charge for Minting NFTs?

OpenSea is the most popular NFT marketplace. Primarily for Ethereum-based NFTs, OpenSea announced the addition of Solana NFTs to their marketplace in Q1 2022. 

OpenSea requires users to pay two fees before minting their digital assets on the platform. These minting prices aren’t fixed: they can be higher or lower depending on the function you seek to perform. 

The first fee you’ll pay as a first-time creator is used to initialize your account. As of April 2022, this fee typically costs $70 to $300

The second fee used to grant access to your account costs $10 to $30. 

You can avoid high gas fees if you spot days when gas fees are lower using tools like Etherscan

Then, OpenSea charges 2.5% for first-time sales of your minted NFT– it’s a multi-billion dollar company for a reason. 

How Much Does Rarible Charge for Minting NFTs?

With ‌400,000 NFTs created and 1.6+ million users, Rarible is another of the most popular NFT marketplaces globally. 

Most users choose Rarible over other platforms because it is a multi-chain platform, has easy-to-use tools, a decentralized governance system that’s more advanced than what you’ll get on most platforms, and a flexible royalty management system that allows creators to set up to 50% royalty fee.

Minting on Rarible is straightforward compared to other NFT marketplaces. The platform itself doesn’t charge a minting fee. You have to pay the gas fee for minting on three different blockchains available in the marketplace (Ethereum, Tezos, and Flow).

After paying the gas fees required for minting, Rarible charges a 2.5% fee for every NFT buy and sell transaction.

What Are Gas Wars and How to Avoid Paying High Gas Fees when Minting

If you’re active in the NFT space, “gas wars” are something you may have sweaty nightmares about. Gas, or the computational power needed to verify transactions on a blockchain network, can often cost hundreds, if not thousands, of dollar-worth of Eth.

Since “minting” an NFT to the blockchain is a much more computationally-heavy process, the network charges more than typical transaction fees. 

A gas war is an auction to get front row seats in an upcoming block of transactions to be validated on the Ethereum blockchain. If there is a surge in the number of people waiting for their transactions to get validated, the price gets too high, which triggers a scuffle.

Almost like a bidding war, people pay more so they can get their transactions processed quicker, ‌driving the transaction costs up. Gas wars are the main cause of high transaction fees on the blockchain. They’re prevalent on the Ethereum network, ‌infamous for its performance and scalability setbacks.

To avoid paying high gas fees, ‌learn how to track gas fees. Etherscan’s Gas Now is a handy tool that can help you to minimize gas prices.

How to Mint an NFT for Free on the Blockchain

Popular marketplaces like OpenSea and Rarible allow you to mint NFTs for free on the platform.

Recently, Rarible announced that you could mint for free on the platform (yes, no gas fees). The downside is that your asset goes on the Rarible collection and not your collection. This means Rarible has more control of your digital asset, and also, the buyer pays for your minting fee.

You can also mint for free on OpenSea. The new collection manager launched in December 2020 introduced a lazy minting feature, allowing creators to list NFTs paying no gas fees until they make the first purchase. Since the NFT isn’t transferable on-chain until they purchase, creators can list without paying a dime.

However, this is not applicable for first-time listing. If this is your first time listing on OpenSea, you still have to pay the gas fees needed to initialize your account.

The Polygon network also allows creators to “mint NFTs for free at the speed of light.” All you have to do is connect your Polygon account, upload your digital art, select the Polygon network during the minting process, and you’re good to go.

Final Thoughts: What to Expect for NFT Minting in the Future

Although the NFT market went ballistic in 2021, the 2022 bear market has many reconsidering their sky-high purchases.JPEGs– if not at least the hundreds or thousands of dollars they spent on gas fees to simply purchase the art. 

In this article, we learned what NFT minting is, how to mint your project on popular marketplaces, and avoid paying very high gas fees. 

However, increasingly more creative and consumer-friendly innovations are being built to make the creation and selling of NFT art a much more profitable endeavor. 

Layer-1 vs. Layer-2 Blockchains: What You Must Know

Bitcoin did the heavy lifting of creating a peer-to-peer decentralized and tokenized financial network. One person can send another person halfway around the world $1,000,000 in BTC for a paltry $20, sometimes even as low as a dollar and change. 

The problem is that microtransactions, such as sending a friend $4 for a cup of coffee, cost the same. 

Similarly, Ethereum created an entire galaxy of possibilities for DeFi, NFTs, and other decentralized applications. However, the breadth of its value has also been one of its detractions– as network gas fees skyrocket in times of extremely high traffic, making using the network ludicrously expensive for users and developers alike. 

CryptoKitties, an early sensational NFT game, nearly ground Ethereum’s network activity to a halt in 2018 due to the throng of transactions. Even today, gas fees can be hundreds or thousands of dollars to mint a new Ethereum-based NFT. 

However, problems are usually followed by problem solvers. Hundreds of developers have dedicated their professional lives of late to either building decentralized apps to help scale projects like Bitcoin or Ethereum or creating more scalable networks from the ground up. 

Layer-1: The underlying blockchain architecture. For example, Bitcoin and Ethereum.

Layer-2: A network that sits on top of Layer-1, which facilities network activity. For example, the Lightning Network and Raiden Network.

The following Layer-1 vs. Layer-2 blockchain guide explores both approaches and how they contrast. 

Layer-1 vs. Layer-2 Blockchains: The Basics

Layer-1 updates usually involve consensus protocol changes or sharding

As you may know, Bitcoin and Ethereum use a gawky but effective consensus protocol called Proof-of-Work (PoW). It’s good at what it does because it works. However, as network activity grows, its limitations become unbearable for many. 

PoW requires miners to solve cryptographically-difficult equations via computational power– hence Bitcoin mining facilities that are just warehouses with specifically designed computers running 24/7/365

At times, transactions can take way too long for convenience’s sake and become very expensive. Bitcoin can manage about seven transactions per second, whereas Ethereum can do 15-20. 

Proof-of-Stake (PoS) is a relatively newer protocol; rather than computation power, it relies on people (validators) staking a certain quantity of holdings to validate transactions.

Changing consensus algorithms can be a divisive ordeal, and switching from PoW to PoS on a network as large as that of Bitcoin or Ethereum would require achieving agreement among the majority of participants, which can be extremely difficult. 

Sharding is another Layer-1 scaling strategy. Sharding breaks transaction sets into smaller chunks called shards, which the network can process at a much faster rate. Think of cutting a PBJ sandwich into small pieces (shards) versus eating it bite by bite. Each small piece you eat is a finalized transaction, whereas the latter approach would require the whole sandwich to be eaten before the transactions are final. 

Attempting to implement scalability measures on a Layer-1 blockchain would require a full or partial network update, which is a slow and contentious process; if things go sideways, the entire network could face enormous damages. 

Many projects have been launched to provide users the scalability that the more legacy cryptocurrency projects have struggled to do. 

For example, chains like Solana, Cosmos, and Cardano (yet to launch anything) have emerged in attempts to unseat Ethereum as the most popular blockchain network for dApps, primarily targeting its scalability issues and low-hanging fruit. 

The user experience tends to be much faster and cheaper on the newer Layer-1s– transactions on Osmosis, a decentralized exchange built on Cosmos, cost around a penny. In contrast, the Ethereum DEX UniSwap can cost dozens or hundreds of dollars. 

However, the opportunity to scale the world’s most popular Layer-1s instead of launch new ones from the ground up is an admirable and lucrative challenge accepted by many. 

They do so through Layer-2 blockchain innovation

Layer-2: Attempts at Scalability

Layer-2s are essentially sandboxes for creativity with minimal or zero disruption to the underlying network.

There are two types of Layer-2 blockchains: state channels and nested blockchains.

A state channel allows for two participants who would otherwise interact on the blockchain to interact off the blockchain, limiting the congestion of the network. 

Imagine Bitcoin’s or Ethereum’s blockchain as a 10-lane superhighway with bumper-to-bumper traffic. A state channel would be the back-road approach you could take to avoid driving into a slow, expensive network and get to your end destination at a fraction of the time and cost. 

Here’s how state channels work: 

  1. A blockchain segment is sealed off through a smart contract or multi-signature means, where all participants agree on the conditions. Lightning Network and Raiden Network used Hashed Timelock Contracts (HTLCs) for their state channels. 
  2. The transaction participants can then directly interact without needing to submit their request to the miners on the Layer-1. 
  3. When all the transaction sets on the state channel are complete, the final state is added to the blockchain. 

So, while a transaction is technically not “final” until added to the blockchain, state channel projects like Bitcoin’s Lightning Network and Ethereum’s Raiden Network effectively carry out the role of policing and verifying transactions. 

The idea is that these “batched” transaction blocks can effectively internally settle; when they do, the entire batch is added to the blockchain. As such, Lightning Network enables fast microtransactions (low fees, fast settlement), and Raiden does the same thing for Ethereum’s broader functionality. 

However, state channels have some limitations. 

Nested blockchains aim to increase scalability exponentially, whereas state channels are more linear. 

Ethereum is a popular breeding ground for decentralized apps to solve scalability issues. OmiseGO, for example, is experimenting with a nested blockchain scaling solution called Plasma. 

In Plasma, multiple levels of specific-use blockchains sit on top of the leading blockchains in parent-child connections. The parent chain then dedicates specific work to child chains, such as a social network or decentralized exchange.

The root chain still calls all the shots and sets the ground rules, but nested blockchains relieve some load. 

Final Thoughts: What You Should Know About Blockchain Scalability

While the differences between Layer-1 and Layer-2 solutions might seem exclusively technical, it’s worth considering that by collecting NFTs, holding tokens, and using dApps, you’re the direct stakeholder in the whole ordeal. 

While Ethereum enjoys a considerable first-mover advantage for NFTs (and DeFi), boasting multi-billion-dollar dApps like OpenSea, competitors are gaining on its tail. 

As an NFT investor or creator, being aware of broader industry trends like scalability is an excellent way to keep your ear to the ground, whether that be for the purpose of finding the next BAYC (on another chain) or creating the next homerun NFT brand for a diehard layer-1 alternative. 

A Guide to Purpose-Built Blockchains

As blockchains exploded in adoption and use cases over the last decade, the number of challenges blockchains face has increased to meet the divergent and growing applications of the technology across various industries.

As cryptocurrencies and token offerings expand to more use cases and specific functions, their underlying infrastructure must specialize in creating a better developer and user experience. Programmatically different blockchains are being deployed for specific use cases, such as shipping, supply chains, financial infrastructure, and NFTs. 

Bitcoin and Ethereum are the original “catch-all” general-purpose blockchains; their purpose is to be the public blockchain network for all types of activity for all network participants. However, as adoption and usage have soared, catering to the network activity for the masses hasn’t been without problems.

While blockchain thus far has been most famous for its role in the rise of digital currencies, there is plenty of non-cryptocurrency uses for the technology. Purpose-built blockchains may make trade-offs with the core blockchain trilemma factors of centralization, security, and scalability to meet different industries’ needs with greater efficiency.

Challenges with Catch-All Blockchains

Most of the major public blockchains, like Ethereum, tend to face immense challenges with filling niche needs.

The first significant challenge in question is that of speed and throughput. Compared to Visa’s 65,000 transaction per second (tps) throughput, Bitcoin can only process 7 transactions per second, while Ethereum can do about 15-25 tps. Both are more decentralized than Visa, and permissionless, but specific use-cases might not need these advantages. 

Both the BTC and ETH networks have become busier than ever, especially with the NFT activity in 2021, and more adoption is on the horizon. As a result, the cost of sending a transaction has skyrocketed, regardless of what’s being sent. 

In Aug. 2021, Eth gas fees reached as high as $30 on average for a simple transaction, with smart contract transaction fees like for using dApps and NFTs being much higher, often in the range of $100-200 or more, which is a trend that had been increasing throughout 2021. 

“Catch-all” blockchains are like highways that don’t always differentiate the types of traffic to the extent that niche purpose blockchains can. Blockchain networks like Bitcoin and Ethereum are too slow and too expensive for the vast majority of smaller-scale, everyday transactions. 

Ethereum’s architecture isn’t customizable, but it does allow for a large array of different use cases including data recording data, supply chain management, insurance, tokenization of assets, and more. Moreover, Bitcoin and Ethereum were built with the principles of pseudonymity, censorship resistance, and transparency in mind.

This poses issues for some industries. For example, legacy regulated capital markets and financial services often have regulatory needs for identity, compliance, confidentiality, governance, and settlement, which aren’t fulfilled by Bitcoin’s and Ethereum’s functionality. 

What are Purpose-Built Blockchains?

These issues have led to blockchain projects building distributed ledgers that target specific use cases. 

Blockchains are diversifying to become more specialized to specific tasks and. For example, they can enable higher throughput activities, faster settlement time, and less fees. These three features can make supply chains more efficient, help move and store different types of information, or capture a higher volume of transactions than major public blockchains today. 

Specific purpose blockchains can be built solely around the efficient and cost-effective exchange of tokens, execution of smart contracts, or other enterprise functions.

With purpose-built blockchains, large-scale complex applications can solve their unique problems without compromising or bending to problems inherited by catch-all blockchain architecture.

Examples of Purpose-Built Blockchains

Acala is a DeFi-focused blockchain that builds a set of financial primitives including the ACA stablecoin, a DEX with unified liquidity provisioning, and staking derivatives. Acala aims to become a parachain on the Polkadot network and is fully EVM-compatible, meaning Ethereum developers can migrate their smart contracts without significant changes to the code. 

Acala is essentially a niche blockchain optimized for use case of DeFi, created with the goal of reducing public network congestion and creating a more efficient and robust ecosystem.

Solana is a high-performance public base-layer blockchain created to track historical events (using proof-of-history) and transactions in a specific sequence, optimizing scalability over decentralization, and enabling scalable apps for developers and users, with low transaction fees and high throughput.

Algorand created a highly scalable, low fee network, decentralized digital currency, and smart contract platform specifically for the financial services industry to use. 

Flow is dedicated to serving NFTs at a much more efficient scale than Ethereum.

Enterprise blockchains can be used to streamline business processes at scale and serve the needs of corporations in a permissioned and centralized manner. For the corporate use case, ledger data visibility can be restricted to a select group of people. 

A nation-state creating and using its own blockchain for central bank digital currencies is another example of a purpose-built blockchain with different parameters of centralization, security, and visibility of transactions.

Ant Group launched AntChain, its own in-house productivity blockchain platform, that it claims offers an “all-in-one workstation that reduces the deployment time of the company’s blockchain-based solutions by as much as 90 percent.” Today, AntChain handles over 100M digital assets on its blockchains daily, and affiliate AliPay handles 1B transactions per day.

Final Thoughts: 

Blockchain technology is expected to expand global GDP by nearly $1.8 trillion in the next decade. The technology of purpose-built blockchains can be used for specific and optimized use cases to serve large-scale and complex applications while meeting both the growing needs of enterprise and consumers. 

Without any updates to the core networks, catch-all blockchains would continue to experience immense challenges if they were used for every niche need: think more cars and trucks funneling into a bustling highway. 

Purpose-built blockchains solve for speed, throughput, and other architectural limitations to meet the global needs of varied industries, spanning public, private, and enterprise needs.