NFTs, or non-fungible tokens, have exploded in popularity over the past couple of years. An NFT is a unique digital asset that represents ownership of a digital or physical item like art, collectibles, real estate, music, videos, and more. NFTs are minted (created) and live on a blockchain like Ethereum, where the ownership and authenticity of each NFT is verified.
How much do NFT creators make? This depends on several factors, but top NFT creators are making millions creating and selling NFTs. In this article, we’ll break down the economics of how much do nft creators make and the potential earnings for NFT creators.
How NFT creators make money
There are several ways NFT creators can profit from their NFTs:
- Initial sale price: When a creator first mints and sells an NFT, they earn the initial sale price set by the creator or earned through an auction. Top NFT sales have reached millions of dollars for a single NFT.
- Royalties: Most NFTs are coded so the creator earns royalty payments each time the NFT is resold. Royalties typically range from 5% to 10% of the resale price. Royalties can be a significant source of passive income for NFT creators.
- Utilization fees: Some NFTs give the holder access to additional benefits like joining a community, accessing a service, or unlocking experiences. Creators can charge utilization fees each time the NFT is used to access these benefits.
- Appreciation: If the floor price or value of an NFT collection rises over time, the NFT creator benefits as the value of their unsold inventory appreciates. They can sell at higher prices in the future.
- Grants and investments: Successful NFT creators may have opportunities to earn grant funding to create new collections or receive investments into their NFT projects.
Factors impacting NFT creator earnings
Several key factors influence how much an NFT creator can potentially earn:
- Demand and popularity: More interest and demand for an NFT collection will drive higher sales and prices. Popular collections see the most success.
- Quality and uniqueness: Higher-quality, more unique and scarce NFTs tend to command higher valuations and prices.
- Community: NFT projects with an engaged community of collectors tend to be more successful long-term. Community drives demand.
- Utility and benefits: NFTs with exclusive benefits and real-world utility have more value for collectors.
- Name recognition: Established artists and creators tend to have more success out of the gate.
- Marketing: Promotion and marketing increase awareness and drive demand for new NFT projects.
Earnings potential for top NFT creators
The earning potential for top NFT creators is extremely high right now. Here are some real examples:
- Pixelmon raised over $70 million selling NFTs across 110,000 NFT collectors. The average sale price was $670 per NFT .
- Pak fetched over $91 million for his NFT collection called Archillect, selling over 270,000 NFTs. The average price was $336 per NFT .
- Beeple has earned over $169 million from his NFT drops, establishing himself as one of the top earning NFT artists .
- Other top creators like Coolman’s Universe and XCOPY have earned tens of millions from selling their generative avatar and artwork NFT collections.
- Bored Ape Yacht Club NFTs have an average sale price of $159,000 per NFT as one of the top projects . The creator Yuga Labs has likely earned over $100 million in royalties.
While exact earnings numbers are not public, these examples illustrate the massive earning potential for top NFT creators right now. The numbers will likely continue rising as the NFT market grows. But earning these types of returns requires building in-demand projects, forming engaged communities, and delivering real value with utility.
How much do average NFT creators make?
For most creators, more modest four to low five-figure sales are more realistic. Minting and selling out a collection of 10,000 NFTs for an average price of 0.2 ETH (around $260 per NFT currently) would earn around $2.6 million in revenue. The creator would need to cover platform fees, gas fees, marketing costs, and potential revenue sharing out of this total amount.
After costs, successful new creators may reasonably earn low to mid six figures for selling out a 10k collection if it gains decent traction. This does not include potential future royalty income, which requires maintaining ongoing demand and volume.
While overnight millionaire success stories do happen, they represent a small minority of creators. Building a consistently profitable and growing NFT project requires significant work.
Pathways for getting started creating and selling NFTs
If you want to start creating and selling NFTs, here are some tips:
- Learn blockchain basics: Understand the NFT ecosystem, wallets, blockchain transactions, gas fees, minting, marketplaces, etc. Being informed will help avoid costly mistakes.
- Find your niche: Determine your specialty – some options include digital art, 3D assets, photography, music, collectibles, metaverse items, memes, PFPs, etc. Leverage your unique skills and talents.
- Build a community: Engage on social media and Discord to start forming an audience. Tease your work and build excitement.
- Design your collection: Create compelling NFT assets with a consistent theme, style, and rarity attributes for more potential value.
- Mint your NFTs: Leverage platforms like Ethereum, Solana, or Polygon to mint your NFT collection with unique metadata.
- Market the launch: Promote via social media, influencers, giveaways, and other marketing tactics to create demand.
- List for sale: Sell on popular NFT marketplaces like OpenSea, Magic Eden, Solanart etc. Consider setting fair prices.
- Provide utility: Unlock exclusive benefits like merchandise, access, raffles, and other perks for added value.
It requires significant time, effort, skill, and a bit of luck to launch a successful NFT drop that sells out and earns strong revenue. Patience and persistence are key. But the financial upside can be tremendous if you build a popular project.
What percentage do NFT marketplaces charge?
Popular marketplaces like OpenSea, Rarible, and Magic Eden charge 2.5% – 5% fees on NFT sales. These fees are deducted from the list price when calculating royalties and seller profits.
How much do average NFTs sell for?
The average sale price for newer projects is generally 0.1 to 1 ETH, or around $100 to $1,000 per NFT. Established blue chip projects sell for higher, while free mints can sell for lower. Unique 1/1 NFTs also sell for more on average.
How many sales do you need to make money on an NFT collection?
The breakeven point varies based on minting and marketing costs. But selling at least 50% of a 5,000-10,000 collection at 0.1 ETH per NFT can potentially earn creators six figures in revenue after costs.
How much do NFT creators make? Top creators are earning tens of millions from popular collections with high demand and strong communities. But new creators more reasonably earn anywhere from thousands to low six figures for successful projects. Launching a profitable NFT project requires creativity, business savvy, and marketing skills. While challenging, the financial upside makes NFT creation worth considering for artists, brands, creators, and entrepreneurs.