What is NFT Gas Fee? How to Create A Gas-free NFT Marketplace?

The NFT market witnessed unforeseen traction in 2021, led by the art-based collectibles. Towards the end of 2021, the NFT market saw a decline in sales — due to multiple reasons. Ever since the start of this year, the NFT ecosystem has been moving through ebbs and flows — however, the collectors have sent almost $37 billion to NFT marketplaces (as of May 2022) — while 2021’s entire average stands at $40 billion.

The creators/artists globally have spent billions of dollars on collectible NFTs; however, they’re also spending a major chunk of their money on ‘gas fee’ to process and validate their transactions. Unfortunately, this gas fee annoys the creator community who wishes to get rid of it. Hence some entrepreneurs are looking to create a gas-free NFT marketplace.

What is NFT Gas Fee?

Users must pay gas fees to cover the cost of the computational resources needed to conduct transactions on a blockchain. It is similar to the processing fees credit cards may tack on when you want to transfer money between accounts or pay bills.

Making a digital file into a digital asset and depositing it on the blockchain for transactional use is known as minting an NFT. Minting an NFT on Ethereum involves resource-intensive computation from miners, just like every other transaction. Gas fees are a means to pay miners for their work in assisting with the blockchain’s transaction recording. Calculating the NFT value can help with gas cost estimation.

Challenges for Creators When Crafting their NFT collection

While already-popular digital artists continue to embrace NFTs, the pandemic-inflicting financially-depleted artist community drives the NFT space. Artists and creators sense their must-deal situation in gas fees while crafting their NFT collection. But then, not every artist can afford the ‘pricey’ gas fees to create, buy & sell NFTs.

Not All NFTs sell for Six figures!

NFTs don’t often sell for six figures, despite what the general public thinks. The majority sell for a modest price of a few hundred dollars, and many might not even be sold. Given that you must pay gas fees to produce and sell your NFT, you can experience a financial loss instead of a gain.

Gas Fees don’t Determine the Asset Value

Gas prices are unrelated to the digital asset’s absolute value and, in certain situations, may even be more expensive than the assets that are being offered for sale. It is particularly challenging for up-and-coming artists who haven’t yet developed a name for themselves.

Imagine an artist forced to pay a ‘pricey’ gas fee to mint his first-ever NFT. The artist has only two options: one is to recoup that gas fee by overpricing their NFT, and the other is to sacrifice profits by underpricing an NFT — either way, the artist will suffer losses.

Understanding Gas Fees on NFT Marketplaces

Gas fees are inseparable from non-fungible tokens. Once you hop on the NFT marketplace development, you’ll realize that creators/artists must bear several external costs to create, buy & sell NFTs.

Most NFTs are moderately priced, selling for around $100, while many others never sell. And they don’t always sell for millions or hundreds of thousands of dollars, despite what your first impressions of NFTs might lead you to assume. You could potentially wind up losing money instead of making profits because you will be paying gas fees for making and selling your NFTs.

Avoiding Gas Fees

You’ll discover very quickly if you venture into the world of NFTs that gas fees are inevitable. But is it possible to reduce the Gas fee you must pay? Follow these steps to avoid paying the gas fee or at least minimize it:

• If you’re an artist/creator, choose the blockchain network wisely. Take Ethereum (for instance); apart from being a popular chain, it asks for a ‘pricey’ gas fee. Always list low gas fee networks, and choose the ideal from them.
• Ensure that you choose the NFT marketplace that embraces efforts to minimize the gas fees — like how OpenSea is doing with its move to the SeaPort protocol.
• Plan your minting time — because gas fees can be unreasonably high — resulting in fluctuating gas prices. Lazy minting can be a good option, which allows creators to mint their NFT (‘just-in-time’) at the time of purchase.

While all these techniques could help you navigate some sort of gas fees (while minting an NFT), nothing could better the option of launching your gas-free NFT marketplace — serving as a potential business model.

Conclusion

The NFT market is skyrocketing — is an understatement. However, paying high gas fees (while minting NFTs) remains an entry barrier. One must spend money to create, buy or sell their artwork-based NFTs. But the gas-free NFT marketplace, as a lucrative way-out option, makes it possible for the creator & buyer community to relish gas-free NFTs.