How to Minimize NFT Costs
The NFT industry has grown into a diverse, innovative, and bustling digital economy of its own right over the last couple years. Did you know there are tens of thousands of monthly buyers in the NFT industry?
Fans and brands have formed new NFT communities, new NFT marketplaces have sprouted up, and of course amazing art pieces have continued to shine across the internet.
Considering the popularity of NFTs, it’s really no wonder the average weekly NFT trading volume (in 2022) sits at $674.95k (according to The Block at time of article, see chart below).
Given that most NFT sales are routed through Ethereum (80–90%), there is surely an enormous amount money that goes towards covering NFT gas fees. As more folks adopt Ethereum for NFTs or anything else, gas fees will continue to rise.
Luckily, when it comes to buying an NFT, there are a handful of ways you can minimize your NFT transaction fees.
Gas fees are the most costly part of many NFT transactions, and thus it’s important to understand what they are and why they are important. Gas fees are essentially what a transaction on Ethereum costs.
When you send ETH to another person, the transaction must be verified via a Proof-of-Work consensus before being approved and added to the blockchain. This consensus protocol requires Ethereum miners to use lots of computing power to solve complex mathematical problems in order to potentially approve a group of transactions (called a block). But the catch is that transactions can be prioritized for speed in exchange for higher gas fee allocation.
Ethereum miners will optimize to first validate the transaction with the highest paying gas fee. Low gas fees could be approved, but they may take significantly more time than a larger gas fee would.
So naturally, as Ethereum users increase their usage of any DeFi options on Ethereum, gas fees will continue to rise. This function is the same as basic supply and demand. If the supply of transactions increases but the demand (mining power) doesn’t grow as quickly, mining power (gas fees) becomes more sought after and more expensive.
One of the best ways to avoid ludicrously high gas prices is by using Ethereum sidechain technologies, or simply using other NFT-appropriate blockchains.
Looking for multi-chain optionality
At Fayre, one of our goals is to make NFTs accessible for anybody. That’s why we have incorporated multi-chain options in our NFT marketplace. At Fayre, fans and brands can enjoy the benefits of using Ethereum, Ethereum’s sidechain Polygon, as well as Binance Smart Chain (BSC). Let’s break down why these two alternative options are potentially more frugal.
Polygon is a sidechain that acts as a layer 2 on Ethereum. Any NFT creator can mint NFTs using Polygon and for significantly less than on the Ethereum blockchain.
In fact, Polygon was specifically designed to be an Ethereum scaling solution for reducing transaction costs and not compromising on transaction speeds. Polygon bypasses the issue of Ethereum gas fees so well that the average Polygon NFT transaction is orders of magnitude lower than any Ethereum transaction cost. Plus the throughput time on Polygon transactions is under 5 seconds because it is a layer 2 solution.
The Binance Smart Chain, or BSC, is another money saving route for NFT artists, fans and brands. BSC’s NFT fees and transaction times are significantly lower and quicker, respectively.
Thus, just like with Polygon, scaling the NFT industry with something like BSC is entirely possible without the need to rack up $430,000 worth of ETH gas fees. No, instead BSC provides low nft fees and high NFT transaction throughput and so any NFT minting costs, and NFT trading fees can be much more palatable for everyone.
The Fayre option
Fayre will soon be offering NFT fans and brands an even further improvement when it comes to NFT fees.
The launching of the Fayre NFT Marketplace will include the official introduction of the $FAYRE token. With the $FAYRE token, you can benefit from some incredibly advantageous perks. Even though the Fayre NFT Marketplace will have a super low transaction fee of 1.5%, using the $FAYRE token can knock that number down to 0%.
If you “lock” 25,000 $FAYRE for a total of ninety days, you will be granted 0% fees anytime you buy NFT art.
Consider how powerful a 0% transaction fee could be for high value NFTs compared to a transaction fee of 1.5%. If we take a fun example and imagine Beeple’s $69 million dollar NFT was resold on Fayre for $75 million dollars. By locking 25k $Fayre, you could waive “goodbye” to a gnarly $1,125,000!
But Fayre doesn’t stop there, because we’ve also created a Lock or List Bonus Program. Along with the first 2,500 wallets that lock up their 25,000 $FAYRE, the first 7,500 wallets that go through our whitelist process will receive 15,000,000 in $FAYRE bonuses!
The window of opportunity to save money on NFT fees will be maximized through Fayre’s multi-chain and $FAYRE locking opportunities.
If you’re just starting to get into NFTs, taking good care to protect your personal funds is essential. Not only should you look for the safest option when buying NFTs, you should also be interested in using the smartest transaction strategy.
Avoiding inexplicably high, and potentially surprising gas fees are some of the best ways to ensure you have an enjoyable NFT experience. Polygon and BSC, and other multi-chain alternatives, are strong options for traders looking to buy quality NFTs without selling the farm. With Fayre, staking can further improve the discounts as staking $FAYRE can provide several excellent perks including no transaction fees.