Non-fungible tokens (NFT) are the in-thing right now. In a short time, they have become a widely acclaimed digital asset class with unmatched value, famous for selling at ridiculously high prices.
NFTs have made it possible to trademark anything, from digital art to physical assets like real estate, luxury watches and so on. More peculiarly, their rarity plays into the vanity of collectors who desire to trademark success or social status as a function of owning expensive super-rare items. The global community went bananas in March 2021 when Beeple, an American digital artist, sold an NFT artwork to an Indian entrepreneur at a whopping price of 69.3 million on Christies.
In the past few years, NFTs have converted a good number of crypto doubters. A prime example is the Shark Tank host, Kevin O'Leary. Originally an ex-crypto skeptic, he now holds a large position on an NFT project including other crypto assets as well. In Kevin's words: “I think non-fungible tokens are going to be bigger than bitcoin. They offer so much value around authentication, inventory management and all kinds of use cases in different asset classes.”
And according to Gary Vee, a Belarusian-American entrepreneur and internet personality, NFTs can be described as 'assets to communicate who you are.'
For content creators including musicians, artists, and influencers amongst others, non-fungible tokens provide unique, immutable certificates of authenticity and ownership for their fans, buyers and NFT collectors.
While creating NFTs is a great way to sell “creative assets” by digitizing them, the process is tasking and expensive. Due to the non-fungible tokens illiquidity and other concerns, NFT creators often have to rely on several NFT marketplaces to reach potential buyers. Unfortunately, selling NFTs through these channels is not cost-effective. In the absence of an alternative, NFT creators have to endure the exorbitant commission charges of popular NFT marketplaces amidst other limitations. Popular marketplaces often exert control over the market to the detriment of the creators On average, if an NFT creator sells an NFT token for $100, they end up pocketing only $60 or less. The way the market is structured, creating NFT marketplaces is arguably a highly lucrative business for all - except the artists, musicians, influencers and other creators.
Since going through NFT marketplaces cuts creators out of a huge chunk of their profits, why don't they bypass the markets and trade directly with a buyer you may ask.
To do this, creators will have to create a digital marketplace with features for hosting auction sales and facilitating the exchange of digital assets between the buyer and seller. Truth be told, building an NFT marketplace from scratch is even more expensive than settling for an existing one.