NFTs have set the world of cryptocurrencies on fire. Over the past year, collectors, artists, and developers have all found new and innovative ways to jump on the NFT bandwagon, but while buying and selling these unique digital assets is fairly straightforward, minting a token of your own can present unexpected complications.
If you’ve ever completed a transaction on Ethereum, you’d be familiar with the high gas fees associated with the network. Ethereum 2.0, the proposed upgrade to the Ethereum blockchain ecosystem, has yet to implement its cost-reducing measures, making NFT minting quite an expensive ordeal. However, high network fees have done little to mute the demand for NFTs, and to tackle the issue of exorbitant production costs, the NFT market has resorted to the concept of lazy minting.
What Is Lazy Minting?
Lazy minting is when an NFT is available off-chain and only gets minted once a sale takes place. This means that the artist does not have to pay any upfront gas fees to mint their NFTs, essentially paying the fees only once the token is purchased.
How NFTs Are Minted?
Minting is the process of turning a digital file into a crypto-collectable or non-fungible digital asset on a blockchain. The digital item is stored in a decentralized database or distributed ledger, and is impossible to edit, modify, or delete. This process of uploading a specific item and assigning it to a unique token on the blockchain is known as minting.
- To mint NFTs you need the appropriate smart contract in place. However, you don’t need to be a blockchain developer to complete this operation; NFT marketplaces have the relevant smart contracts required to perform this action.
- On a blockchain, a gas fee must be paid to write any new information to the network. This is similar to a transaction fee, and can cost NFT producers a pretty penny.
- NFTs can be sold on marketplaces like Rarible or OpenSea. It’s important to remember that each marketplace comes with different minting options.
While it’s difficult to estimate how long it takes to mint a particular NFT, most NFT platforms, tools, and marketplaces try to make it as easy and straightforward as possible.
What Are The Benefits Of Lazy Minting?
There are several benefits to lazy minting, including:
- Muting the impact of gas fees: By shifting the gas fee payment to mint NFTs post-sale, sellers can incorporate the fee into their pricing models, making the high fees less of a deterrent to budding artists.
- Lowering the barrier for entry: As mentioned earlier, one of the main benefits of lazy minting is that it lowers the barrier for entry imposed by the high gas fees needed to mint an NFT, making the process more affordable for artists and developers.
- Encouraging liquidity: Lazy minting encourages liquidity, since NFTs can only be transferred after being sold. This helps prevent sellers from being left with a collection of minted, unsold NFTs, and buyers aren’t left waiting indefinitely for the NFT to be transferred to them.
What Are The Disadvantages Of Lazy Minting?
There are also a few disadvantages to lazy minting, including:
Loss of control: Lazy minting removes upfront gas costs, but relinquishes a certain amount of control from the artist or developer. By choosing to lazy mint, the seller no longer has the final say on who purchases their work and when it’s transferred.
Potential for fraud: If a minted NFT is not sold, it remains in possession of the artist or developer, who is incentivized to sell in order to cover the gas fee. However, by offering lazy minting, there could be potential for fraud if someone were to sell an NFT but never mint or transfer it to the buyer.
Lazy minting is a booming trend in the non-fungible digital assets market, with several benefits for artists and developers. It eliminates the upfront cost of minting NFTs, making the process far more affordable and accessible. Additionally, the benefits of lazy minting aren’t reserved for artists and developers, since only sold NFTs are minted, removing unnecessary power-hungry transactions from the blockchain.