5 ways to monetize your digital art with NFTs

by · February 21, 2023

5 ways to monetize your digital art with NFTs

Nonfungible tokens (NFTs) offer a new way to sell and distribute digital art, and they have the potential to unlock new revenue streams for artists in the digital age. Here are five ways to make money from digital art with NFTs.

Fractional ownership

This involves dividing the ownership of an artwork into smaller parts and selling them as tokens, allowing multiple investors to own a stake in the artwork. For example, an artist can create 100 tokens for an artwork and sell them to 100 different buyers, each of whom owns a share of the artwork.

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Dynamic NFTs

Dynamic NFTs are a type of NFT that changes over time, creating a unique and evolving experience for the owner. Dynamic NFTs can use external data sources to update the artwork, such as social media or actual events.

For example, “The Eternal Pump” is a dynamic NFT that changes in response to the rise and fall of the cryptocurrency market. The artwork becomes more complex and elaborate as the value of cryptocurrencies increases, while it becomes more simple and abstract as the value falls. Because they allow viewers to follow changes in the artwork and watch it evolve over time, dynamic NFTs can bring a new level of involvement and commitment to collectors.

Dynamic NFTs can be monetized via auction, where collectors can bid on them, and the highest bidder takes ownership. Dynamic NFTs that are highly sought after, due to their unique characteristics and evolving nature, can command high prices at auction. Additionally, using subscription-based systems, artists can offer collectors exclusive dynamic NFTs for a fee. These NFTs can vary frequently, offering subscribers a steady stream of new content.

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Royalties

NFTs can be programmed to automatically pay the artist a percentage of the sale each time the NFT is resold on a secondary market. This allows artists to continue to profit from their work even after the first sale. For example, digital artist Pak sold an NFT called “The Fungible” for $502,000, and the NFT was automated to pay the artist a 10% royalty for each subsequent sale. Since then, NFT has been resold several times, and the artist has earned over $2 million in royalties.

Gamification

This involves creating interactive non-fungible tokens that users can play with or use in games. For example, Axie Infinity is a game that uses NFTs as game assets, with players able to buy, sell and trade them to build their game characters.

In addition, NFTs can be given as rewards for achieving certain goals or activities in a game or app. For example, a fitness app can offer non-fungible tokens to users who meet their daily fitness goals.

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Associations of physical assets

Physical asset associations with NFTs involve linking a physical object to a unique digital asset, usually using a unique identifier or code. This can provide a way to verify the authenticity and ownership of the physical object, while allowing for the transfer of ownership and value of the associated digital asset.

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That said, an NFT can be used to represent ownership of a physical asset, such as a property or a car. For example, a company called CarForce is developing NFTs that reflect ownership of high-end cars, with the NFT being a digital car key that allows the owner to enter and operate the car itself.

Related: What is Tokenized Property? A Beginner’s Guide to Digital Property Ownership