How artists earn through NFTs

NFTs comprised over 16% of the global art market in 2022 and the number has grown ever since. These digital art pieces are also seen making rounds in traditional auction houses for millions of dollars. So naturally, an increasingly high number of artists are also moving from traditional art to NFTs. Apart from the monetary benefits, some other reasons for this transition could be:

• gaining more control over their art
• having the liberty to interact with collectors directly
• some extra sources of income such as royalties
• getting to build an online community around their art that can be leveraged in their future endeavors.

Though, coming back to the monetary aspect, over 40 artists were known to make over $10 million through their NFT art with the top three of them earning over $100 million. So, let’s dig in deep into how creators and artists earn through NFTs and understand this scenario better.

1. Direct Sales

NFT artists are free to set a price for their collection irrespective of the marketplace or any other collection. So you are free to earn as much as you want to as long as you can back it up with substantial value.

2. Royalty fees

Most of the marketplaces allow creators to set 5-12% royalty fees on secondary sales. This means that if someone buys your art and sells it again on some secondary market, you can potentially earn some share of that sale. However, a lot of marketplaces are now changing their policies regarding the creator fees so it’s important to do your due diligence before minting your collection on a platform.

3. Multiple supply avenues

There are so many ways of selling an art piece. It can be a 1/1 NFT, have 10,000 copies - each with slight variation, be turned into an open edition, and so on. You can choose how you want your art to be sold.

4. Brand deals

Tiffany & Co. x CryptoPunks, Louis Vuitton x Beeple, and there are many more examples of brands partnering with NFT creators to leverage their reputation. In turn, the creator also gets more sales and publicity. So it’s a win-win situation for both and can be considered a possible revenue stream for NFT artists.

As per a report by Dune Analytics, there were about 4,000 unique NFT creators at its peak. The number may not seem huge but artists and creators all over the world have surely got a reason to start minting their art as NFTs. With the growing number of advancements in NFT, such as Soul Bound Tokens, we can expect for the use cases to keep growing.