Nonfungible tokens (NFTs) offer a new way to sell and distribute digital art, and have the potential to open up new sources of income for artists in the digital age. Here are five ways to monetize digital art with NFT.
Fractionalized ownership
This involves splitting ownership of artworks 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 it to 100 different buyers, each of whom owns a portion of the artwork.
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Dynamic NFT
Dynamic NFTs are types of NFTs that change over time, creating a unique and evolving experience for their owners. Dynamic NFTs can use external data sources to update artwork, such as social media feeds or real-time events.
For example, “The Eternal Pump” is a dynamic NFT that changes in response to the ups and downs of the cryptocurrency market. The artwork becomes more complex and elaborate as the value of the cryptocurrency increases, but becomes more straightforward and abstract as the value decreases. Because it allows viewers to follow the changes in the artwork and see it evolve over time, dynamic NFTs can bring a new level of involvement and engagement to collectors.
Feeling incredibly lucky to have been one of the lucky few to pick one up @dmitricherniak‘s work, The Eternal Pump, in @artblocks_io Today’s artist’s playground. Another amazing work by an amazing artist. pic.twitter.com/NRywp1kQaC
– pixelpete (@pixelpete) February 22, 2021
Dynamic NFTs can be monetized through auctions, where collectors can bid, and the highest bidder takes ownership. Dynamic NFTs that are in high demand, due to their unique features and evolving nature, can command high prices at auction. In addition, using a subscription-based system, artists can offer exclusive dynamic NFT collectors for a fee. These NFTs may vary frequently, giving customers a constant stream of fresh content.
Royalties
NFT can be programmed to automatically pay the artist a percentage of the sale every time the NFT is resold on the secondary market. This allows artists to continue to profit from their work even after it has been sold first. For example, digital artist Pak sells an NFT called “The Fungible” for $502,000, and NFT automatically pays the artist a 10% royalty on each subsequent sale. Since then, the NFT has been resold several times, and the artist has earned more than $2 million in royalties.
X/X: Cube
Fungible * Open Edition
The number of cubes owned will send a private set of NFTs totaling the same fungible cube count. pic.twitter.com/p5qO4NgHJp
— Pak (@muratpak) April 6, 2021
Gamification
This includes creating interactive nonfungible tokens that can be played or used in games. For example, Axie Infinite is a game that uses NFTs as game assets, with players able to buy, sell and trade to build game characters.
In addition, NFTs can be given as rewards for achieving certain goals or activities in games or apps. For example, a fitness app can award nonfungible tokens to users who reach their daily exercise goals.
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Bonding of physical assets
Linking physical assets to NFTs involves linking a physical object to a unique digital asset, usually using a unique identifier or code. It can provide a way to verify the authenticity and ownership of physical objects, as well as allow the transfer of ownership and value of related digital assets.
That said, NFTs can be used to represent ownership of physical assets, such as real estate or cars. For example, a company called CarForce is developing an NFT that represents the ownership of a high-end car, with the NFT being a digital car key that allows the owner to enter and operate the actual car.
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