Tips for Buying NFTs

Welcome to the whirlwind world of NFT trading!

NFTs trade on a variety of different platforms and each one works a little differently. This article covers some tips about the biggest platforms and payment methods you may use during your NFT trading journey. 

Payment Methods

There are two primary ways to purchase NFTs: with Ethereum (ETH) or with a credit card. Credit card purchases are available only for the largest platforms, while Ethereum is accepted for almost all NFTs. 

MetaMask

Metamask is the most popular Ethereum wallet and is the best way to make NFT purchases with ETH. You can download it as a browser extension or a mobile app and either create or import an Ethereum address. It allows you to send and view any cryptocurrencies you own with that address from the Metamask interface on your device. If you want to view a NFT you own, then you can use Metamask to sign into a variety of NFT platforms that display them, such as Opensea

You will need to fill your wallet with some ETH to make transactions on the Ethereum network. If you need to buy some, the easiest way for new users is through Coinbase. Coinbase is also a good way to trade your ETH back into dollars to cash out to a bank account. 

For an even deeper look at MetaMask, check out this ultimate guide to MetaMask.

Transaction Fees

Transactions on the Ethereum network will incur a transaction fee. The exact cost depends on the “gas” price you select. The more you’re willing to pay, the faster the transaction will be processed. Metamask will select this for you by default or give you an option to select slow, average, or fast speeds.

This should be fine for most users, but if you want a little more control over setting the speed and cost you can use ETH Gas Station to determine current optimal gas prices. To set a specific gas price in Metamask for a particular transaction, look for a link near the transaction cost that either says “edit” or “advanced options” and change the “Gwei” box to your desired value.

Ethereum transaction fees are unfortunately quite expensive at the moment and can range from around $10 to $75 worth of ETH. This is due to the rapid expansion of projects built on top of Ethereum, which leads to tons of people competing to have their transactions processed.

However, these fees should gradually get much cheaper as a variety of scaling solutions are rolled out and adopted over the next year. 

Platforms

Nifty Gateway

Nifty Gateway is one of the largest platforms for trading NFT art with drops from the biggest artists. 

Fees

Secondary market transactions have a hefty 15% fee, with 10% going to the artist. 

Payment Methods

Nifty accepts both credit cards and ETH.

Withdrawals

The withdrawal options are to a bank account (US only and with a $5000 weekly limit) or to a Gemini account (no country restriction). 

Makersplace

Makersplace is another platform that releases art NFTs through drops, but not quite as popular as Nifty Gateway.

Graph from cryptoart.io

Fees

Makersplace charges a 12.5% fee on secondary market trades. 

Payment Methods

Makersplace accepts both credit cards and ETH.

Receiving Money

If you sell something on Makersplace for ETH, it will be sent to your connected Ethereum address (which you set up through metamask). If someone paid you through credit card, Makersplace will pay you either through Stripe or Paypal. 

Other Notes

Makersplace does not have a strong secondary market and It’s difficult to navigate to and sell particular pieces. Often listing on Opensea can increase your exposure, which you can do by sending the NFT to your metamask wallet. Look for the “send creations” button on the left side of the page when looking at your collection. If you bought with ETH then it will already be in your wallet. 

Opensea

Opensea is a large NFT marketplace that includes a wide variety of NFT types. Opensea’s assets are all on-chain, so you need a metamask wallet to interact with the platform. 

Fees

Opensea takes a 2.5% fee from each trade, but the NFT creator can also opt to charge an additional fee of their choice. 

Payment Methods

Opensea accepts ETH, as well as a few other cryptocurrencies like USDC and DAI. 

Bidding Tip

If you want to bid on a NFT on Opensea, you need wrapped ether (WETH). WETH is a cryptocurrency with a 1:1 exchange rate to ETH, but with some useful technical improvements. WETH allows you to place a bid for any item on Opensea without paying transaction costs.

You can also use the same WETH to make bids on multiple NFTs at once. You can swap your ETH to WETH (and vice versa) in their WETH Station, found by hovering over your profile picture in the upper right of the page. Swapping will incur an Ethereum network transaction fee. 

NBA Top Shot

NBA Top Shot is a digital collectibles platform based around official NBA video highlights called “moments”.  We wrote extensively about NBA Top shot in this piece on NFT sports cards.

Fees

Top Shot charges a 5% fee on secondary market trades. 

Payment Methods

You can purchase moments and packs with a credit card or cryptocurrency. This can happen either at the time of sale or you can deposit into your “dapper wallet” beforehand and purchase with that balance. Moment sales will be credited to your dapper wallet.

Withdrawals

You can withdraw money to your bank, which incurs a $25 wire fee and has a $30 minimum. You can also cash out through USDC cryptocurrency.

Warning

Top Shot has been quite slow about giving people withdrawal access and have been approving accounts on a rolling basis. They are still in beta and this will be improving, but currently expect that it might take up to 6-8 weeks for your account to be approved for withdrawals.

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Author

Stefan Von Imhof

Stefan Von Imhof

Stefan lives and breathes asset analysis and valuations. Formerly the Head of Product at Flippa – the world’s largest marketplace for buying & selling online businesses, he built Flippa's Due Diligence Program, and has bought & sold dozens of websites & newsletters. Prior to Flippa he was the first product manager at HG Insights, a market intelligence company sold to Riverwood Capital Partners in 2020. Originally from Boston and later Santa Barbara, CA, he now lives in Australia with his wife & Boston Terrier, Charlie.

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