Is it Worth Minting an NFT?
Minting an NFT might sound complex, but it simply means publishing your NFT as a buyable asset on the blockchain (most of the cryptology is done for you by the marketplace).
If you're weighing up whether to mint vs buy NFTs, it's worth looking at options like the VQGAN+CLIP AI art generator from text that we have here at Nightcafe. It’s a great way to break into the world of making your own NFTs.
But how do NFTs gain value, and might you make a better profit as a reseller?
Let's take a look.
The Value of NFT Minting
Winding back to April 2021, a fairly unknown NFT collection called Bored Ape Yacht Club launched on Ethereum.
Early-stage investors were invited to mint (or create a new token) for a reasonable price of 0.08 ETH - about $359 AUD at today's valuation.
Twelve months on, you'd need to pay a floor price entry of 86.99 ETH (approximately $39,000 AUD).
The driving factor? Celebs like Steph Curry and Jimmy Fallon started collecting the NFTs.
This quick example makes it easy to demonstrate why minting can be a lucrative business - as can holding NFTs when they appreciate.
Prices rise alongside demand, so the greater the interest, the more each digital asset is worth.
Pros and Cons of Minting a New NFT
There are distinct advantages to being one of the first to mint a new token - it means you're one of the earlier investors and likely to get the lowest price.
Initial NFT prices have yet to make any price gain, which gives you the potential to make a tidy return on your investment.
One of the original investors in our story about Bored Ape Yacht Club NFTs sold his collection at Sotheby's for a whopping $25.2 million AUD.
You might also find that you might get a few little perks as an early adopter if you get in from day one!
Although that's not a given, previous drops have awarded:
- Project stakes in the DAO.
- Voting rights in allocating the community purse.
- Additional airdrops from related projects.
As with every investment, you need to watch out for a couple of risks - NFT values can drop sharply, and may be one of those tokens that just never appreciates.
Hotly tipped NFT launches can cause a flurry of activity, so in some cases, the initial price is bumped up by demand.
Digital art is never a sure thing, so if you're minting a new NFT, you need to be prepared to hold onto it until it's worth more than you paid.
Should I Buy an NFT rather than Minting it?
Whichever way you get into the NFT sector, you will have advantages and pitfalls to balance.
Minting into a new NFT project can be a great opportunity, but sometimes it's a better call to hedge your bets.
One of the best ways to sample the pace and appetite of the NFT world is to have a go at making your own NFT assets, with AI apps like the text-to-image creation we offer here at Nightcafe, which uses VQGAN+CLIP to make creating NFTs easily accessible even to non-coding newbies.
The concept works by harnessing the power of an algorithm to deliver text-to-art digital artworks, and it's a brilliant introduction to what's possible and what you can create with a little innovation!