This article discusses the results of A16Z research on NFT Minting.
For the vast majority of digital artists who go unnoticed, NFTs have opened up a whole new income stream. Technological innovations like NFTs provide creators with a new way to connect and engage with their fans and audiences. With a large number of NFTs circulating in the crypto markets, creators may feel overwhelmed as they explore this space. At Liqd, we want to provide you with a glimpse into this industry and how, through statistics, can artists and NFT devs gain an edge and become successful.
How to market your NFT?
How to mint a successful NFT?
How to make a stable, viable, visible, and most importantly profitable project?
In this article, we answer all these questions and more with research data. Let's dig in!
NFT minting is a process of converting any digital asset or file into crypto assets that are stored in the blockchain.
Successful projects start with decisions based on properly researched data. NFT minting always leads to one of the first questions: What should be the ideal price for the NFT or NFT collections? A16Z did some research on the subject below are a few of the findings.
NFT Mint Price: A higher initial price usually means higher revenue upfront. This is very tempting for beginners, however, numbers don't lie. As seen from the below chart, based on the collected data from the most popular OpenSea NFTs, the ideal Mint price for NFTs or NFTs collection that yields the maximum revenue is 0.05 ETH to 0.10 ETH. In fact, a higher initial mint price usually leads to stalled projects where the price does not move and biddings are not high. Market dynamics can be influenced a great deal by the mint price, which is the easiest lever NFT creators have at their disposal.
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NFT Minting Data
Source: https://a16z.com/2022/03/31/nft-mint-data-early-decisions/
Market Volume: There is a negative correlation between the performance of the NFT project and the initial NFT sales revenue. The reasons can be many. The owner of an NFT project is less motivated to stay engaged when revenue is higher early on in the project. It is also harder to produce higher multiples on a large base. By contrast, going from a price of 0.05 ETH to 0.50 ETH is much easier than going from 0.50 ETH to 5.00 ETH.
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NFT Minting Volume
Source: https://a16z.com/2022/03/31/nft-mint-data-early-decisions/
As described below, if the NFT mint price is lower, the secondary volume, which ensures the long-term success of the project, is usually higher. Since initial revenue is less, there is more incentive for the creator and the community to stay engaged in the project for higher returns.
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NFT Minting Secondary Volume
Source: https://a16z.com/2022/03/31/nft-mint-data-early-decisions/
And last but not least, Wallet Caps.
What is the right amount of NFTs to mint per on-chain address to attract enough demand but also draw attention to the work among millions of other NFT projects already available on the market? The answer might surprise you!
There are no signs of high performance from too many NFTs minted per address. This also applies to minting too few NFTs per address. A sweet spot here is between 5 and 10 NFT mints per address. See the below graph for details.
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NFT minting data for wallets
Source: https://a16z.com/2022/03/31/nft-mint-data-early-decisions/
This is what the numbers are telling us. Art, however, transcends numbers. There are times when it defies all logic. But, we hope that these benchmarks can help NFT creators and enthusiasts take critical decisions while minting the NFTs. Happy minting.
