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A new way to monetize your NFTs
Zora - a media NFT marketplace - created an innovative way to distribute earnings with artists and builders called 'Protocol Rewards'
We’ll get to a new way to monetize NFTs in a bit, but first, some big news from our friends at Wild:
Drawing on the recent success of Mitchell F. Chan’s The Boys of Summer, they’re launching their first Exhibition: MATERIAL, which includes works from 3 epic artists: Figure31, Jeffrey Scudder, & Sten.
They’re doing a Presale with a limited number of close partners and have personally invited you to participate at 4 pm ET on Oct 30. This allows you to collect a Slate, which includes one piece from each artist at a fixed price of 0.24ETH – helping to save on gas & ensure you receive a piece from each collection before the Descending Dutch Auction on Oct 31, which begins at 1 ETH on October 31st.
A new way to monetize your NFTs
Today, I’ll talk about an innovation that got me excited about digital ownership—a way to support creators and champion discoverability like nothing we have seen before.
It all starts with free NFTs…
How to monetize your free NFTs?
The concept of free NFTs is nothing new. People have released free artworks and collectibles for different reasons since the early days — CryptoPunks were released for free. The expectation was to monetize those releases via royalties on secondary sales.
This 'strategy' feels off, with royalties in jeopardy across many blockchains and a much lower volume than in the peak days.
Last week, Zora - an NFT marketplace focusing on media- developed a core protocol innovation that shakes things up.
The concept is called protocol rewards.
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How does Zora Protocol Rewards work?
“The Protocol Rewards mechanism collects a small fee in ETH from collectors when they mint collectibles as NFTs. Artists, writers, and creators can mint their work on the Zora chain without paying gas fees.
The Zora smart contract then directs portions of the collector fees to the creators, referrers, curators, and first minter, regardless of where the mint occurs.”1
In a nutshell:
A small fee is included in the transaction: 0.000777 ETH (~$1.40).
No gas fees for creators.
Earnings are distributed between the creator, 3rd party, and Zora.
Royalties on secondary sales apply.
It works for non-free NFTs, too.
Supply and time to collect can be adjusted.
What’s critical is Zora is sharing part of the revenue with 3rd parties.
Anyone can build an integration, such as a dApp, dashboard, gallery, website, or even a newsletter that links to digital objects on Zora. The protocol will share revenue not only with the artists but also with the 3rd party.
Who benefits from Zora’s protocol rewards?
It probably isn’t for everyone, especially if you already have a strong market (not easy). This concept might also feel counterintuitive in art, where exclusivity and high prices = success and recognition.
Nevertheless, it benefits content creators (artists, writers, musicians) and media brands trying to build an audience over time. It’s more sustainable in the long term and resilient to market conditions. It also incentivizes developers to build applications that can get them a portion of the revenue in exchange for discovery tools. Sounds like a win-win to me.
The big win is for the space, as I expect more protocols, marketplaces, and galleries to follow.
What’s a 3rd party application?
Any dApp, smart contract, webpage, feed, etc.
Think about the curatorial use cases for a second.
Curators across different fields now have a scalable way to earn revenue. Do you have a reader app? Earn revenue from collected articles/essays on it. Do you have a curated gallery? Earn a piece of the transactions originating from your gallery. Same for audio, video, and so on…
Even this newsletter is a third party. I just need to add my wallet address to the URL of NFT links, and I’d get a small commission on every sale. I’ve always dreamed of such a feature, as it would reward me for sales originating from my issues.
It will take time
This isn’t magic. Creators still need to build their audience, developers need to integrate those third-party apps, and marketplaces need to develop such reward systems.
I can see a future where these rewards are the standard rather than the exception across marketplaces.
This essay is a free collectible. You can collect it on Zora (you need to bridge ETH to the Zora network).
Until next time,