How do NFT Creators Make Money?

Josiah Nang-Bayi, MD
10 Min Read

NFTs (non-fungible tokens) took the digital world by storm in 2021, with creators, artists, musicians, and brands scrambling to mint their own unique blockchain-verified assets. Eventually, The NFT market surpassed $40 billion in sales volume that year, proving the medium’s lucrative potential for digital ownership and collectibles. But how exactly do NFT creators turn their crypto art and collectibles into profit in this new landscape? Let’s explore the key ways NFT creators can monetize their work.

11 Most Profitable Ways NFT Creators Make Money

Selling NFTs to Collectors

The most straightforward path to NFT profits is selling your original NFT works to collectors, investors and fans. Creators can earn income by:

– Setting a fixed sale price or minimum bid for their 1/1 works or limited editions.

– Conducting timed auctions through platforms like OpenSea, allowing bidding wars that drive up the final price.

– Marketing and promoting NFT drops to build hype and attract bidders. Social media campaigns, collaborations, and giveaways help attract buyers.

– Releasing content and utilities that add ongoing value for holders, increasing demand and prices over time.

Top NFT artists and projects regularly net 6 or 7-figure sale prices for rare and coveted works. But even creators new to the NFT space can quickly build an audience and reliable buyer base to fund their careers.

Earning Royalties on Secondary Sales

One of the most revolutionary aspects of NFTs is the ability to encode royalties so that creators earn a percentage every time their work is resold in the future.

NFT royalties typically range from 5-10%, secured through smart contracts on blockchain marketplaces like OpenSea. This provides creators with passive income as their work appreciates and trades hands.

Royalties incentivize creators to build their brand and community since they will profit from their NFTs over the long-term as their work changes owners and grows in value.

Bundled NFTs & Commercial Usage Rights

NFT creators have great flexibility to bundle exclusive rights, assets, and utilities into their NFT offerings. Potential added value elements include:

– Commercial usage rights to the underlying intellectual property for the holder

– Physical products, merchandise, or gift cards

– Access to exclusive experiences, events, or membership benefits

– Virtual assets to use across games, metaverse worlds, and applications

– Split royalties or shared ownership of future IP

– Creative experiences like collaborations, private lessons, or appearances

Bundle utility-heavy NFTs can enable much higher sale prices by packaging in legally binding rights and benefits that extend the asset’s value.

Creating Franchises & IP Licensing

The most successful NFT projects produce expansive franchises by leveraging blockchain rights management and fractional IP ownership.

Popular NFT brands like Bored Ape Yacht Club and CryptoPunks generate massive value from:

– Releasing new NFT collections that expand the IP’s universe 

– Licensing the IP for merch, media content, experiences, and more

– Developing web3 games and metaverse worlds featuring their signature characters

– Acquiring other brands and IPs to fold into their ecosystem

Building an iconic NFT brand across art, entertainment, and culture can enable lucrative franchising opportunities through decentralized IP control.

NFT Galleries, Museums & Displays

The burgeoning metaverse landscape allows NFT creators to showcase and sell their collections in new virtual settings. Digital art galleries, NFT museums, and online showrooms provide new venues for monetization:

– Curate and display NFT art in galleries & custom 3D spaces.

– Stage exclusive VR events and auction houses to engage collectors.

– Rent virtual land plots and marketplaces to showcase works.

– Partner with augmented reality apps to overlay NFTs in real world locations.

As virtual and augmented worlds expand, NFT creators can leverage these environments to attract new patrons beyond just core crypto users.

Creating Play-to-Earn NFT Games

Play-to-earn blockchain games that let players own NFT in-game assets and earn cryptocurrency rewards have become a massive market. Top titles like Axie Infinity and The Sandbox enable creators to profit by:

– Developing NFT characters, accessories, skins, and upgrades that other players purchase.

– Designing NFT items earned through gameplay and challenges.

– Crafting virtual environments, buildings, land and other goods as NFTs.

– Implementing staking or breeding mechanisms that increase NFT scarcity and value.

Fun and engaging play-to-earn game economies attract dedicated player bases who value the NFT assets.

Consignment Through Marketplaces

For creators who don’t want to handle all the blockchain complexities of minting and marketing their NFTs directly, consignment services through marketplaces like OpenSea offer an alternative path.

With consignment:

– The platform handles backend minting, blockchain fees and setting up the listing.

– Creators can provide guidance on pricing, auctions, promotion, etc. 

– The marketplace takes a platform fee but creators retain majority of sales proceeds.

– Consignment allows creators without crypto knowledge to focus on the art.

This makes NFTs more accessible to mainstream artists focused on their craft instead of blockchain technology.

Speculating on Promising Projects

Beyond creating original works, developers, designers and entrepreneurs can profit from NFTs by investing time and money into promising budding NFT projects.

– Provide artistic designs, assets, and IP for startup NFT collections.

– Develop utility and benefits to make NFTs more engaging and valuable.

– Promote and advisory services in exchange for NFTs or royalty shares.

– Flip allocations of new projects before broader release.

Contributing work, expertise, or capital to the next potential blue chip NFT collection before it takes off can grant access to lucrative allocation deals.

Fractionalized NFT Funds & Indexes

A newer method for profiting from top-tier NFTs as a creator is fractionalized funds. These allow investors to buy shares in an NFT fund or index that owns expensive works like Bored Apes, crypto art, metaverse land and more. Examples include Fractional , Masterworks and Index Coop.

Creators can partner with fractional platforms by:

– Having their works added to indexed NFT funds for passive income from fund performance fees.

– Curating their own specialty fractional funds with custom criteria.

– Promoting these fractional products to their communities to enhance accessibility and loyalty.

This allows creators to earn royalties from partial ownership of their works spread across thousands of smaller investors.

NFT Lending & Collateralized Loans

NFT-backed loans are expanding as a new commercialization option using NFTs as collateral.  Lending platforms like MetaStreet, NFTfi and Drops Loans allow customers to borrow against their NFT holdings.

For NFT creators, loans unlock capital without having to immediately sell the underlying work. Creators can:

– Pledge valuable NFTs as collateral for sizable, low-interest loans. 

– Use borrowed capital for personal income, to fund projects, or as working capital.

– Avoid capital gains taxes compared to liquidating the asset.

– Retain ownership of the borrowed against NFT.

Loans provide creators with flexible monetization of their NFT assets beyond outright sales.

Consulting & Services for Brands

Finally, individuals and agencies specialized in the NFT space can now offer lucrative consulting and services to help mainstream brands navigate these emerging opportunities. According to one report, demand for NFT, crypto and metaverse expertise increased 400% on LinkedIn in 2022.

Creators are getting hired to:

– Strategize how brands can leverage NFTs and web3 trends.

– Design branded NFT collections, merch, and virtual products.

– Build branded metaverse spaces and virtual storefronts. 

– Run NFT campaigns, activations, airdrops and marketplaces for companies.

– Educate internal teams and execs on crypto technology and culture.

This rising demand for NFT-focused skills and knowledge presents a major service monetization vector for creators immersed in the web3 space.

Summary Of How NFT Creators Make Money

NFTs enable digital creators and artists to tap into blockchain technology and strong crypto-native demand for verifiable digital goods. While still an emerging space, ample evidence demonstrates the wealth generation potential from selling digital art, collectibles, branded content, and virtual goods as NFTs. As the tools and infrastructure improve to streamline minting and distribution, expect participation in the creator economy to drastically expand. Many industries like gaming, entertainment and fashion are still just scratching the surface of what’s possible with NFT-fueled digital transformation.

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Josiah Nang-Bayi, MD is a medical doctor by profession, an author, a financial literacy and digital assets enthusiast, an entrepreneur and a growing philanthropist.
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