How to Solana — Chapter 3: Overview of NFTs
NFTs are one of the most important and exciting innovations in crypto/blockchain today, appealing to both crypto and non-crypto natives. But what exactly are NFTs and why are they so important?
An NFT is a “non-fungible token.” Fungibility is the economic concept stating that one unit is interchangeable and indistinguishable from another unit. The currency you hold in your bank account is fungible, so are cryptocurrencies like Bitcoin. NFTs, conversely, are “non-fungible” meaning that each unit is different and thus often priced differently.
The applications of NFTs are endless and constantly evolving, in the same way that you can’t define all applications for an art piece or a ticket.
The most common use case of NFTs is currently “digital art” or a “digital collectable” with provable scarcity. However, we see use cases expanding to ticketing, social gating, IP, gaming/metaverse, financial products, domain namesing, and certifications.
Solana versus Ethereum NFTs
The concept of web 3 NFTs began on Ethereum and was popularized by Crypto Punks, Crypto Kitties, Curio Cards, and many more. However, as use of the Ethereum blockchain increased, large fees were incurred to mint, buy, or sell NFTs.
Solana, with negligible transaction fees, and near-instant minting finality, was a natural environment for a vibrant NFT ecosystem to form.
After familiarization with Solana-native wallet infrastructure, DEX/AMMs, and simple borrow-lending operations, many Solana users tend to experiment with NFT marketplaces This typically means experimenting with one or more of the following:
- Participating in live mints
- Buying and/or Selling NFTs on a secondary market
- Tracking statistics such as NFT trade volume, price floors, average price, etc.
- Minting personal NFTs (of special life occasions, for example)
- Social gating
Please note, in previous chapters we’ve referred to “primitives” as key building blocks or “legos” that a user should interact with. The NFT ecosystem is more nascent so we will structure the following text around ways a user can participate in the NFT ecosystem on Solana.
Participating in the NFT ecosystem on Solana
Task 1 — Participating in live mints & auctions
Participating in live mints is both scary, exciting, and disappointing — long time Solana NFTs users will have experienced all these emotions at one time. A live mint is the NFT equivalent of a token generation event or “ICO”, for a fungible token in which the supply of NFTs is released to the community at a set time or date.
Acquiring NFTs through on-chain minting
1. Find a project that has either yet to launch, or has not yet minted through its total supply.
The sources of information about Solana NFTs are limitless. Many users follow twitter closely, subscribe to key newsletters, or follow websites that track drops.
Nextdrop.is (https://nextdrop.is/), rarity tools (https://rarity.tools/upcoming/), and Solanalysis (https://solanalysis.com/upcoming) are popular websites for tracking Solana/Ethereum NFT drops. Please note, when you find an NFT project it is best to research it thoroughly and join relevant discord/telegram channels.
2. Identify the project website and wait for the minting time. A typical NFT mint site may look as follows:
3. Connect your chosen wallet
4. Confirm price and # of NFTs remaining
5. Click on the mint button and approve transaction
6. View your newly minted NFT in your wallet (in this example, Phantom wallet)
Acquire an NFT through: Auction
Solana NFT Primary Market Suite I: Metaplex storefronts
Metaplex allows creators and brands to create their own storefront. Users can interact directly with the Metaplex storefront to buy NFTs via auction.
Task 2 — Buying and selling in the secondary market
Secondary markets are a great way to acquire NFTs that you did not directly mint or to sell your minted or acquired NFTs.
Solana NFT Secondary Market Suite I: Solanart.io (https://solanart.io/)
Solanart is one of the first Solana NFT marketplaces that allowed customers to “get quick and easy access to digital collectibles and explore, buy and sell NFTs from different collections and artists. Solanart takes a 3% “marketplace fee” on the price of every transaction. Below is the purchase process.
1. Navigate to the landing page and explore the collection of your choice
2. View key collection details including the floor price
Tip: The floor price is the price of the cheapest NFT within the collection.
3. Identify the NFT for purchase
4. Approve transaction and view your NFT
Solana NFT Secondary Market Suite II: Digital Eyes (https://digitaleyes.market/)
Digital Eyes is a marketplace for purchase and sale of Solana NFTs. Listing fees for sale are 0.1 SOL, service fees to the buyer are 2.5% plus any royalty % for the creator.
Task 3 — Tracking Solana NFT statistics
Solanalysis provides data analytics as well as attribute filtering for your Solana NFTs. You can easily see the market capitalization, average price, volume, and floor price.
Task 4 — Minting your own Solana NFT or collection
Frequent NFT collectors may want to create their own NFTs. This could be a collection of NFTs or even a single NFT.
Solana NFT Creator Suite I: Sonar.watch created a simple NFT creator (https://nft-creator.sonar.watch)
Solana NFT Creator Suite II: Metaplex for creators who want their own NFT storefront (https://www.metaplex.com/)
For more advanced users, they may want to deploy their own customizable storefront and create and auction. Additional information on creating a Metaplex storefront can be found on the SolXBlog:
Solana NFT Ecosystem Data (Source: Solanalysis)
- Solanart — First-mover, fully-fledged Solana NFT marketplace that allows anyone to acquire or sell Solana-based NFTs.
- Digitaleyes- 1st open NFT marketplace for Solana. Offers comprehensive listings and analytics across Solana-native NFT launches.
- Solsea- NFT marketplace that enables creators to choose and embed licenses when they mint NFTs.
- Magiceden.io — Launchpad & Marketplace for Solana NFTs. Market-leading 0% listing fee, and 2% transaction fee.
Pre-launch & Conceptual Products:
- Burnt Finance — Trade unlimited NFTs with lightning fast speeds and the lowest fees on the first unified NFT auction protocol built on Solana.
- All-Art Protocol — The All-Art Protocol provides constant liquidity for NFTs by introducing a new type of liquidity pool AMMs, while upgrading the current NFT standard with improved functionalities and embedded license rights call NFT-PRO.
- Nina.Market — Through Nina protocol artists press record-coins which can be bought by fans directly from the artist. Owning a record-coin allows fans to stream the associated music from their personal collection. Fans can collect, trade or sell record-coins. (https://docs.nina.market/info/)
- Coral Reef — Solana NFT marketplace (https://coralreef.art/#/temp/)
- Howl Finance — NFT Collateralized Loan Protocol on Solana https://howlfinance.medium.com/hello-solana-f4689b50277d