How to Trade NFTs - A Comprehensive Guide - Crypto.ex
NFT trading has established a reputation for itself in recent years. The news was frequently filled with NFT deals worth millions of dollars, especially in 2021. Tom Brady, a professional football player, is prepared to sell his own unique NFT, while singers like Lil Nas X and Grimes have joined the trend. This demonstrates that NFTs based on singers, athletes, or video games may be quite valuable in the NFT market. More than $60 million was paid for the digital artwork of Beetle.
How to trade NFTs is undoubtedly going through your head now that you've read about the financial benefit connected to NFTs. We've broken down the procedure in this post to assist you. But first, let's take a look at some of the greatest markets for trading NFTs.
Top Locations for NFT Trading
NFTs have markets where users may purchase, sell, and trade NFTs, just like cryptocurrencies have their own cryptocurrency exchanges. Some of the top NFT markets are listed below:
OpenSea
One of the biggest NFT markets is OpenSea, which provides a huge variety of NFTs, including sports, art, trading cards, censorship-resistant domain names, and collectibles. The ERC 721 and ERC 1155 assets are also supported.
By using OpenSea's item-minting tool, artists and producers may create their own NFTs and mint them on the blockchain. You can build a collection of NFTs on the marketplace for free and without writing a single line of code.
Nifty Gateway
It is also referred to as the NFT marketplace and has sold pieces of art by well-known digital artists including Beeple, Daniel Arsham, Grimes, and Pak. A licenced cryptocurrency exchange called Gemini is in charge of running and maintaining this market.
Because Nifty Gateway enables artists to get royalties, creators are drawn to it. It manages all the technical aspects of producing and selling NFTs, simplifying NFT sales.
Rarible
A community-owned NFT marketplace with a heavy emphasis on artistic goods is called Rarible. You become a member of the Rarible community and the owner when you own the ERC-20 RARI token.
Every week, the market distributes 75,000 RARI. Furthermore, RARI tokens are awarded to active traders who purchase or sell on the platform. Rarible is a platform that allows artists and producers to mint and sell their digital creations, such music albums, books, or movies. The Rarible marketplace offers a variety of categories, including photography, art, metaverses, games, memes, domains, and music.
SuperRare
Compared to other NFT markets, SuperRare is unique. To be permitted to sell at the market, you must submit an application. You won't get a response from SuperRare if your application is declined. As a result, it is a one-of-a-kind marketplace for digital artwork.
Each piece of art was truly produced by an artist on the network and is a digital treasure. Later, it is tokenized and made available for purchase and exchange as a crypto-collectible. ETH, the native currency of the Ethereum blockchain, is used in every transaction on the market. Currently, SuperRare is collaborating with a select group of artists.
Costs Associated with NFT Trading
- Although NFT trading may be a profitable endeavour, there are expenses associated with NFT minting and trading that you simply cannot ignore. These expenses are as follows:
- Gas fees: The majority of NFTs rely on Ethereum. As a result, you must pay gas costs, which are the cost associated with completing transactions on the Ethereum blockchain, everytime you mint, buy, sell, trade, list, or accept the offer of an NFT. The blockchain's demand at the time a transaction is started determines the gas charge.
- Account fees: You must pay them once when you create your NFT marketplace account and link your cryptocurrency wallet to it.
How to Trade NFTs?
Fortunately, trading NFT is rather simple. However, we advise extensively familiarising yourself with the NFT market and investigating the NFT you intend to buy. How to accomplish it is as follows:
- Create a crypto wallet: If you are serious about trading NFT, you really need to have a crypto wallet. You will keep your NFTs in this location. Since the bulk of NFTs are Ethereum-based, as we previously stated, a wallet like MetaMask will be ideal.
- Become a member of the NFT Marketplace and buy an NFT: Select one of the top NFT markets from the list above, then sign up for the platform. Simple in nature, this process shouldn't take too long. It's crucial to keep in mind that purchasing and selling NFTs requires paying gas taxes. Put some ETH into your MetaMask wallet as a result. Find the NFT you wish to buy now, and finish the transaction.
- begin trading: Once you've purchased an NFT, you may put it up for sale. The end of that. You are now prepared to transact in NFTs.
Risks Associated with Trading NFT
Contrary to common assumption, not every sell from NFT trading is worth six figures. Most NFTs cost a several hundred dollars, while some might not even be sold. Here are a few dangers associated with trading NFTs while keeping that in mind.
Risks of Smart Contracts
The danger associated with smart contracts is currently obvious. A few months back, due to weak smart contract security, a well-known DeFi by the name of Poly was breached, and NFTs worth $600 million were taken. The hackers mounted a successful large-scale attack by taking advantage of the minuscule security holes in smart contracts.
Assessment Challenges
Another risk in the NFT market is the inability to assign value to an NFT. The value of an NFT depends on exclusivity, creativity, scarcity of buyers and owners, and more. However, in the absence of a fixed standard, the value of NFTs fluctuates greatly.
Legal Challenges
Currently, there is no legal definition of NFT. Different countries, such as Japan, UK and others, have taken different approaches while classifying NFTs. Therefore, there is a need for an international regulatory body to legalize NFTs and to set rules for NFTs.
Cyber Threats and Online Fraud Risk
With the popularity of NFTs, the risk of cyber threats has also increased. There are many replicas of authentic NFT stores on the Internet. They have the exact same logo and content on their website. They may sell you an NFT that is not even on the market or may sell you a counterfeit NFT.
Another risk is that someone poses as a popular artist and sells you counterfeit NFTs. There is a risk of fake giveaways, fake airdrops, copyright piracy, and more.
Intellectual Property Rights
Owning NFTs is another risk to consider. Sometimes people sell a replica of the original NFT. When you buy such NFTs, you have the right to use them, but you do not own the intellectual property rights. Therefore, it is important to have an international governing body that enforces trademark, right of publicity, copyright and ethical rights to decentralized blockchain technology.
Final Thoughts
It cannot be denied that NFTs have become a huge market. People have become millionaires through NFT trading, but there is a lot of risk involved. The price of an NFT could drop overnight, the market could get hacked, or someone could sell you a fake NFT. We advise you to thoroughly research the NFT marketplace and NFTs before making a purchase decision.
How to trade NFTs - FAQs
1. Where can I trade NFTs?
There are many places to trade NFTs, but OpenSea is one of the largest, followed by Rarible, Nifty Gateway, and SuperRare. These markets have huge NFT collections and they ensure a safe and secure NFT trading.
2. Can you get rich by trading NFTs?
While there is a possibility that you may make money selling your NFTs, there is also a chance that you may suffer losses. The price of the NFT may drop overnight, and you may have to sell for a loss. Or, the opposite could also happen. This is a risky venture, and we recommend doing your research before making a decision.
3. How do I convert NFT to cash?
Transfer the NFT to the market where you want to sell it. Within the NFT page, click "Sell" and you have sold your NFT and converted it to cash.
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