NFT
Nonfungible tokens (NFTs), a new method to distribute and sell digital art, have the potential to open up new revenue streams for digital artists. These are five ways you can monetize digital art using NFTs.
Fractionalized ownership
This allows multiple investors to purchase a share of the artwork by splitting it into smaller pieces and selling them off as tokens. An artist could create 100 tokens to sell a piece or art, and each buyer would own a portion of it.
Related: How do I assess the value and utility of an NFT
Dynamic NFTs
Dynamic NFTs can be described as a type NFT that changes over the course of time. This creates a unique experience for the owner. Dynamic NFTs have the ability to use external data sources such as social media feeds or actual occurrences to update artwork.
For example, “The Eternal Pump” is a dynamic NFT that changes in response to the rise and fall of the cryptocurrency market. As cryptocurrencies become more valuable, the artwork becomes more complicated and more abstract. They allow collectors to track the evolution of artwork over time and can be followed by viewers. Dynamic NFTs are a great way to engage and involve new levels of people.
I feel extremely fortunate to have been able to purchase @dmitricherniak’s work, The Eternal Pump, today on the @artblocks_io artist playground. Another incredible body of work by an amazing artist. pic.twitter.com/NRywp1kQaC
— pixelpete (@pixelpete) February 22, 2021
The auction is a way for dynamic NFTs to be monetized. Collectors can offer their services and the highest bidder becomes the owner. Because of their unique features and changing nature, dynamic NFTs can be highly valued. For a fee, artists can also offer collectors unique dynamic NFTs via subscription-based platforms. These NFTs could change often, providing subscribers with a steady stream content.
Royalties
NFTs can automatically be programmed to pay an artist a percentage for each sale. This allows artists to keep making money even after they sell their original work. For example, the digital artist Pak sold an NFT called “The Fungible” for $502,000, and the NFT was automated to pay the artist a 10% royalty on every subsequent sale. The NFT has been resold many times since then and the artist has received over $2 million in royalties.
X/X Cube
Fungible* Open Editions
A personalized set of NFTs will be generated based on the number of cubes owned. pic.twitter.com/p5qO4NgHJp
— Pak (@muratpak) April 6, 2021
Gamification
This is done by creating nonfungible interactive tokens that users can use in games or play with. Axie Infinity, for example, uses NFTs to create game assets. Players can trade, buy, and sell them to build their characters.
NFTs can also be offered as rewards for achieving certain activities or goals in an app or game. A fitness app might offer tokens that are non-fungible to users who meet their daily workout goals.
Related: What is STEPN (GMT)? A beginner’s guide on the Web3 lifestyle app
Tie-ins of physical assets
NFTs and physical asset tie-ins allow you to link a physical asset with a unique digital asset. This is usually done using a unique code or identifier. This allows you to verify ownership and authenticity of the physical asset, and also allows for the transfer or value of the associated virtual asset.
However, an NFT could be used to signify ownership of a physical asset such as a piece or car. CarForce, for instance, is working on NFTs that represent ownership of high-end automobiles. The NFT serves as a digital key to the vehicle that allows the owner access to the car.
Related: What is tokenized property? A beginner’s guide to digital real estate ownership