The Easiest Guide for NFT Artists: Budget Plan for Minting an NFT

NFT is a great tool for artists to monetize their creativity and some of the top talented creators are earning pretty high amount on every NFT listing. But you also need to be aware of the cost that artists pay to mint and list their works onto the NFT marketplaces. So, to get your NFT career started, let’s quickly look at all the cost that you need to pay for one NFT listing, and hopefully it will help you calculate the necessary budget for your successful debut in the NFT world!

3 Types of Fees

The key to being familiar to NFT in financial terms is understanding what types of fees will be charged. When you convert your money into ETH on crypto exchange services or sending your ETH to your Metamask wallet, you will need to pay some transaction fee. And then, another fee called Gas Fee will be charged when you are in a NFT marketplace and are minting and listing your NFT art pieces.

Depending on NFT marketplaces but before or after your listing, the NFT marketplace asks you to pay commission fees to use the platform as well. So, you need to simulate the total estimated costs gathering those three types of fees and prepare the relevant budget would make your smooth first release.

Transaction Fees on Crypto Exchange Services

Let’s look at the transaction fees for crypto exchange service first. The cost varies depending on service providers, but let’s say if you use Binance, generally 3% to 4.5% of trading fee will be charged when you buy ETH using your credit card and 0.003ETH (as of May 2021) will be charged when you transfer your ETH to your Metamask.

Gas Fees at Minting and Listing Your NFTs

When you mint and list your NFT for sale, you need to pay gas fee for the network service. This varies depending on marketplaces as well as other factors.

Gas fee is calculated by a multiply by Gas amount x Gas Price. Gas amount varies depending on the action you are taking (for example, if you mint your image data, the amount would be around 200,000 to 500,000, while if you send ETH from your Metamask to Your friend’s Metamask, it would be only around 20,000) and gas price is determined by the real time network traffic and roughly ranges 30 Gwei to 200 Gwei (Gwei = 0.000000001 ETH).

Let me demonstrate a fee calculation example on Opensea. Let’s say you are trying to mint and sell your first NFT on Opensea at a fixed price, a typical required gas would be like, 300,000 x 60Gwei = 0.024ETH

When you mint your item, this calculation is automatically demonstrated on Metamask and you can easily check the payment amount in USD. So you don’t need to calculate like above every time.

This is the total required gas fee on Opensea but some NFT platforms, like Foundation, separate this fee into two different fees, minting fee and listing fee. So in this case you would need to pay gas fee twice.

Commission Fee

Commission fees are charged when you list your NFT for sale or after your work is sold to somebody, depending on marketplaces. Amount also varies, but let’s say you are using Opensea for now, the fee would be 2.5%. This would be deducted from sales you made, so the rest 97.5% will be your profit.

Simulation of Total Cost for the First NFT Listing

Now all the fees are explained. Let’s calculate the estimated cost you need to pay for your first listing. So the cost would be like:

(Gas fee for minting a NFT on Opensea 0.024ETH + Binance transfer fee 0.003ETH) / (100% – Binance credit transaction Fee 3.5%) = Nearly 0.028ETH = Approx. 110USD.

So, 110 USD is the typical budget that you need to prepare for your first minting and 2.5% commission fee will be deducted from your sales price after the successful sale.

Prepare Your Budget with a Margin

Here is one more important thing. It’s always better to have some extra budget. As explained, the gas fee is dynamically changing based on the real time network traffic so you might not be able to pay enough if you cut down small pence. Maybe you can add 15-20% margin to your budget just in case, otherwise you might need to repeat all the steps to add extra ETH to your wallet with extra expenses for the additional fees.

It’s always better to keep you updated with the latest standard gas price. You can always check the real time gas price on etherscan.io.

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