When launching a new NFT product or collection, the network transaction fees are a factor that in many projects cannot be overlooked. If you’re still looking for the right platform to mint your NFTs, here’s what it can cost you on different blockchains. Along the way, we’ll learn which blockchains are the best for NFTs in 2023 from that perspective.
But first, let’s answer the most important question…
Why NFT minting costs matter?
You could say that issuing a new NFT is not a big deal–even if the gas prices are at higher levels, paying $30 for a piece that could cost thousands of dollars seems like a fraction of the sale. Well, it is a small fraction of that sale.
But that’s the simplest use case for NFTs there is.
In another popular use case–issuing an NFT collection–the gas fees might become trouble. With the same $30 gas fee, launching a collection of 10,000 generative art NFTs would cost $300,000. Just to mint it!
If we were to go one step further, think about an industrial use of the NFT technology. What if Pepsi or Coca-Cola wanted to put an NFT on each can they sell as a new form of promotion? Or any other manufacturer of consumer goods?
Coca-cola produces 2.5 billion cans of beverages of all of their brands per year, just in the UK. A year-long campaign using NFTs would cost them an additional $2.5 billion only if the gas fees were around $1. Even with smaller fees, say 0.01 on some newer chains, that would still account for $25 million to run it. Probably acceptable, but still significant–why not have it lower?
As you can see, it’s all a matter of the scale you’re operating on.
What influences the cost?
Coming from the FMCG sectors, executives might be used to how the business is done at a large scale. It is both a great advantage in negotiations and a drawback when the small costs quickly add up to thousands and millions of dollars.
Unfortunately, there’s no negotiating with blockchains. In fact, the transaction fees are an anti-spam mechanism that prevents the blockchain from being clogged or taken down by some form of Denial-of-Service attack.
This is why at times of high usage, Ethereum gas fees skyrocket and are generally higher when more accounts become active at a given period of time. Since the activity is rather measured by the number of transactions waiting to be put in blocks, doing that on a larger scale over a shorter period of time can put the fees higher, adding to the project’s costs.
And let’s not forget, minting is one cost and there are others – platform fee or the cost of building own NFT marketplace, listing fee, etc.
What are the costs of minting NFTs per blockchain?
Minting NFTs is a specific smart contract transaction that may be slightly more expensive than typical transfer between wallets. It’s because transfer consumes less resources than storing data. On most newer chains, the cost is minimal, but Ethereum remains and likely will remain the industry standard.
So, how much does it cost to mint an NFT on different blockchains? Here’s a short comparison from the sources we could find.
What’s also worth noting is that at the time of writing this article, the congestion on most networks is low–the fees are likely to increase once the markets boom again.
- Ethereum – ~0.00252 ETH, $2.9
Note: A historical NFT minting gas fee on Ethereum was $500. It gets up quickly as market explodes.
- BNB – 0.005 BNB, $1.24
- Solana – 0.00045 SOL, $0.0081
- Algorand – 0.001 ALGO, $0.00018
- Cardano – .17-1.5 ADA, $0.044–$0,39
- Tezos –1 XTZ for an entire collection, $0.82
- Flow – 0.0000000185 FLOW, $0.01
- Polygon – free with default lazy minting, ~200 gwei for batch minting – $0.003
How to reduce NFT minting costs?
The good news is that there are several ways of reducing the initial cost. Here are some of the ideas.
Lazy minting has become a popular way of reducing minting costs. With that process, the NFTs are technically minted at the moment they are claimed by a buyer, but that comes with several drawbacks from the buyer’s perspective regarding security or willingness to participate in the cost, i.e. a user has to ‘buy’ or ‘claim’ the NFT (and cover the gas fees) while some use cases might want to just ‘reward’ the user as that’s the path of least resistance.
Minting the NFTs over a period of time
Since transaction fees are a spam-prevention mechanism and are adjusted to the network usage, your project can work around it.
Common advice for anyone active in the DeFi space is to optimize transaction times, and the same goes for NFT projects. You can check when the gas fees on Ethereum are lower and schedule the minting to that period–or create a self-adjusting system for that purpose.
For the larger scale operation we mentioned earlier, doing the minting all at once is not a good idea. If you can do that over a period of time, that would reduce the average minting cost.
Reducing the number of transactions
Similarly to timing, you can optimize the number of transactions. Some NFTs can come in batches to fewer users who then can redistribute them. You can always work on the project idea and adjust the number of NFTs in the project, knowing that it can be a factor.
Reducing transaction size
Another thing that the blockchain does is adjusting to transaction sizes. Some say that the most valuable thing on blockchain is the block space. In general, transactions that take more of that space cost more. Simplifying the NFTs from the transaction standpoint–i.e. creating a simpler logic around the transaction–can be another cost-reducing activity. The simpler NFT the better, as storing data gets expensive quickly on blockchains–and anything more than a URL address takes additional space.
This is something that your development team should be aware of and know how to optimize it. The transaction costs between blockchains can be usually calculated in advance, knowing the virtual machine opcodes. For those unfamiliar with this term–certain operations have their respective minimum fees. The end transaction fee is a sum of all the operations within.
Use a Layer-2 scaling solution
If you’d like to utilize the largest network with NFTs–Ethereum–using a layer 2 scaling solution is a good way to reduce the costs while staying close to the main ecosystem.
This is the route that many big brands have taken already. Looking at Polygon, NFTs on this blockchain have been issued by Bentley, Macy’s, Nivea, Paramount, and others. The only problem is that–for now–you can’t simply bridge the NFTs between the layer 1 and layer 2. However, you can easily do that with native cryptocurrencies (i.e. ETH and MATIC) with which users will buy the NFTs.
Waiting for further developments
In a fast moving space such as crypto, waiting for further development with certain use cases is one of the options, too. Although not a perfect one as developments tend to be postponed, and it leaves you reliant on another entities.
Still, for example, Solana is working on the concept of compressed NFTs which might be useful for large enterprises or gaming. Even though the cost of minting an NFT on Solana costs around $0.3, this feature can bring that costs down 100x. Such thing will likely save you more at minting than any other optimization–if it makes it to the market.
Where to mint your NFTs?
Should the cost of minting NFTs be the main factor for choosing blockchain for your project? Not really. As you can see, for almost all of the platforms beyond Ethereum, the costs are negligible. At this point, you might want to consider the market sizes, i.e. active participants, accounts, community activity, and transaction times accordingly to your project idea.
Want to deploy your NFT project? Let’s talk!