Trading 101: How To Mint An NFT

Creating an NFT is as simple as uploading your files, inputting your collection’s description and making your profile, determining your royalties and completing your listing. If this sounds daunting, follow our five steps below to get started.

How to mint an NFT in five steps

1. Create your NFT

2. Choose where to mint your NFT

3. Connect your wallet

4. Mint your NFT

5. Market your NFT

Step one: create your NFT

To create your NFT, the first thing you need to decide is the purpose and concept behind your work. This will dictate everything from the style its created in and the buyers it’s marketed to. 

Choosing your concept should be simple. Deep down, you know what you want to create and what message you want to send. Whether it’s for pure creative expression, fun and entertainment or sending an ideological message, there are limitless opportunities when it comes to your concept.

Keep in mind, the NFT projects that harbor the most success tend to be the ones that have a strong sense of community. To appeal to a community, the art usually carries a potent message.  A great example of an NFT project with an amazing purpose is the World of Women. When WoW launched in July 2021, its goal was to diversify the NFT space by attracting more women into it. Projects like these are ones that create the most buzz and are likely to get noticed. 

Once you have a strong sense of purpose, next you need to think about the NFT creation itself. What type of art do you want to create? What style would align best with the concept? There’s multiple options for this, whether it’s photography, abstract, pixelated or cartoon-styled. If you’re stuck for inspiration, it may be worth taking a look at previous successful projects.

Step two: choose where to mint your NFT

Once you know what kind of project you want to create, your next step is to choose a platform for your NFT to be minted on. NFT platforms are big marketplaces, a bit like Amazon or eBay, that allow your NFT to be seen and purchased by others. Let’s take you through some of the most popular.

Which is the best platform to mint NFTs?

Minting NFTs on OpenSea

When creators say that OpenSea is the best of all the NFT platforms, it’s hard to question them. The mammoth marketplace has shown mad growth during the NFT boom of 2021, going from barely known to the first name on people’s lips when it comes to NFTs. With it’s 1 million+ wallets created, so you're freshly minted NFT art is guaranteed to get eyeballs. People aren’t calling OpenSea the eBay for NFTs for nothing.

What’s more, OpenSea’s easy interface makes creating an NFT easier than setting up an Instagram profile. Just make sure you have an Ethereum wallet already setup (we’ll talk about these later), as it makes the process super smooth. The best way to familiarize yourself with OpenSea is to take a look, so have a browse.

• Audience size: 1 million +
• Usability: Super simple, but due to saturation can be hard to navigate good quality projects.
• Fees: OpenSea takes 2.5% of every transaction that happens on its platform.
• Blockchain: Ethereum

Minting NFTs on Rarible 

Although OpenSea is the leader in the space, there are other platforms that could breed success for your project too. Take Rarible, for instance— with its reliable services and community-driven platform, Rarible is a top place to mint your first NFT. 

• Audience size: 400,000 NFTs have been created on Rarible.
• Usability: Easy interface has useful features like Top Collections and Hot Bids on its homepage.
• Fees: Rarible charges a service fee of 2.5% per sale on both ends of the transaction, which acts as a listing fee
• Blockchain: Ethereum

But why would you choose it over OpenSea? Well, although Raible is smaller, unlike OpenSea it offers users the opportunity to receive RARI tokens. RARI is earned by using the platform and can be used to curate content and vote on platform upgrades.

At the same time, Rarible is humble enough to know that OpenSea holds much of the market, so has introduced OpenSea integration. This means making sure that your listed NFTs can also be viewed on OpenSea, which is pretty cool. We’re all friends in the NFT space. 

Minting Solana NFTs on Solanart

Now, this is one you won’t see on too many obvious lists. This is because unlike the majority of marketplace (like the two mentioned above), Solanart does not use the Ethereum blockchain for it’s NFTs. Nope. It instead uses— you guessed it— Solana.

You might be thinking: what's the benefit of this? Why would I mint my NFT using a less popular blockchain? But that's just it. The Ethereum NFT space is so popular that it is crowded and saturated. This makes it difficult for newcomers in the space to garner attention. What's more, the saturation on the ETH network means that gas fees (we’ll explain what these are later) are super high. This is putting some buyers off, since sometimes they end up paying more for the gas fee than for the NFT itself.

So, if you’re looking to create a new and funky project, consider putting it on Solana. Who knows, just like Google took over from Yahoo in the search engine battle of the late 90s, maybe Solana can beat the giants of OpenSea and Rarible. It’s a calculated decision and entirely up to you. There are benefits to both systems. 

• Audience size: Unknown
• Usability: Less easy and clean as OpenSea and Rarible, but still pretty easy once you connect your SOL wallet.
• Fees: ​​3% marketplace fee is taken on the selling price of every transaction.
• Blockchain: Solana (SOL)

Step three: connect your wallet

Once you've chosen your  platform, your next task is to connect your wallet. For OpenSea and Rarible, you need to use an Ethereum wallet such as MetaMask. You could also use Coinbase wallet, WalletConnect or Fortmatic. It doesn’t really matter,  as long as ETH is supported.

Let’s say you chose MetaMask. Once you've downloaded the wallet, add the MetaMask extension to your chrome browser, and return to your ETH-based NFT platform. You can use this wallet as a login, and it makes the process of minting (and even buying) NFTs really simple.

If you opt for Solanart, you’ll need to use a Solana wallet such as Solflare, Phantom or Clover. All of these wallets will connect to Solanart, allowing you to mint your first NFT on the platform. It’s the same principle, just different blockchain networks and different digital wallets.

Step four: mint your NFT

Minting a token on the blockchain means including the information about the smart contract of the NFT and its metadata on a block in the blockchain.

Once you connect your wallet, you can go to a page that will allow you to set up the conditions of your NFT. For OpenSea, this means clicking ‘Create’ in the top right hand corner.

This is where you complete your listing. You can add details like the name of the project, the names of individual NFTs and of course, upload the NFT in whatever format it comes in (ex. JPEG, MP4). 

Another detail you need to add is the royalty rate. This is the amount submitted within the smart contract that determines the percentage of sales you will take from further sales. The percentage for this is usually between 10-15%— but you get to decide. 

So, to explain more clearly, let’s say you sell your NFT to its first buyer for $1,000. Then, further down the line, that owner goes and sells it for $1,200. Now, you’d get 10% from that sale ($120). This is how Larva Labs, the geniuses behind CryptoPunks, have made so much bank despite initially giving away the CryptoPunks for free in 2017.

Step five: share your NFT project

Congratulations, your NFT is minted! You can now show your friends, show your family, your parents (not that they’ll have a clue what you’re showing them)— and the rest of the NFT loving world. Your project is up and running. You can now put ‘NFT creator’ on your Twitter bio and act like you’re cool. 

Now, when it comes to business, the next step is all about building a community. If your concept and purpose is in sync as we discussed before, this task becomes a whole lot easier. So let’s assume you’ve created your NFTs for a particular community. You know exactly who your project is for, who to market to and therefore where to market to. 

So get your hands dirty. Get in the Twitter comments. Create a discord. Get yourself involved in the NFT community and contribute to conversations and parallel projects. Join forces with other projects, make friends, attend events. An NFT project becomes a brand, and if you’re the face of it, you need to get people interested in that brand. Most NFTs are ‘just JPEGs’ at the end of the day, so if you want people to invest their hard earned crypto into them, you need to connect with them in a very special way.

Right, now that we’ve got these steps covered, let’s jump into a few extra resources that you may find helpful before you begin.

How much does it cost to mint an NFT?

Most platforms will charge a small fee to mint an NFT on their platform. However, this fee is next to nothing compared to the biggest expense when it comes to NFT minting: gas fees.

What are gas fees?

Whenever you go to create your first NFT, you’ll have to pay gas fees. To create an NFT, you have to mint its token on the blockchain. As it requires you to interact with the blockchain, you’ll need to pay gas fees. 

When minting, you only need to pay a gas fee on the first NFT you create. However, when purchasing NFTs, you need to pay a gas fee every time.

Gas prices fluctuate depending on how busy the Ethereum network is. The more congested it is, the more expensive the gas fees get.

Here’s an analogy for you: you’ve got a train, and loads of people want to get on. There are limited seats, with more passengers wanting to board. It’s a case of supply and demand, so new passengers pay more for the available  seats. 

This is why it is cheaper to make NFT on the Solana blockchain, since there are next to no gas fees. The train seats are in less demand. The downside is that the market for SOL NFTs is nowhere near as big as the Ethereum NFT market.

Is minting an NFT taxable?

The good news is that creating an NFT isn’t a taxable event. It’s only when you sell, swap, or sometimes gift the NFT that you’ll have a taxable event.

However, while you’re here, you might as well get to grips with the general tax rules surrounding NFTs. Loads of creators have been caught out, and the IRS has even claimed that people owed billions in NFT taxes. Get ahead of the game and know your stuff before you’re caught red-faced.

NFT tax USA

The IRS has issued guidance on NFTs that states NFTs may be treated as a capital asset (like crypto) or a collectible, depending on the particulars of the NFT. This means in some instances, if your NFT is deemed a collectible and you've held it for more than a year, you'll pay the higher 28% long-term Capital Gains Tax rate on collectibles. You can find out more about how NFTs are taxed in the US in our guide, but to summarize:

• Selling or trading NFTs: Capital Gains Tax, but the higher 28% tax may apply for NFTs deemed collectibles.
• Buying NFTs: No tax if you buy with fiat currency, but buying an NFT with crypto would be seen as a crypto-to-crypto trade.
• Minting/creating your own NFT: No tax - though minting costs may be able to be added to your cost basis.
• Selling NFTs you created: Potentially Income Tax.

NFT tax UK

HMRC hasn’t issued specific guidance for tax on NFTs just yet, but here is a quick summary of what you can assume:

• Buying an NFT with fiat currency: Not taxable.
• Buying an NFT with cryptocurrency: Capital Gains Tax.
• Selling an NFT for crypto or fiat currency: Capital Gains Tax.
• Swapping an NFT for another NFT: Capital Gains Tax.
• Minting an NFT: Not taxable.
• Farming NFTs: Could be subject to Capital Gains Tax or Income Tax.
• Gifting an NFT: Capital Gains Tax (unless gifting to your spouse in which case it’s tax free).

If you want to find out more about how crypto is taxed in the UK, check out our extensive guide, updated for 2022.

NFT tax Australia

The ATO is one of the few tax offices that has issued guidance on NFTs. The ATO says the tax treatment of NFTs follows the same tax treatment as cryptocurrencies. In short:

• Buying an NFT with fiat currency: Not taxable.
• Buying an NFT with cryptocurrency: Capital Gains Tax.
• Selling an NFT for crypto or fiat currency: Capital Gains Tax.
• Swapping an NFT for another NFT: Capital Gains Tax.
• Minting an NFT: Not taxable.
• Farming NFTs: Could be subject to Capital Gains Tax or Income Tax.
• Gifting an NFT: Capital Gains Tax.

It’s important to note that if you’re selling NFTs as a business (like an art dealer) this would be subject to Income Tax instead.

If you’re interested in discovering more about how crypto is taxed in Australia, see our detailed guide. 

NFT tax Canada

The CRA hasn’t yet issued any specific guidance on tax on NFTs. However, it’s safe to assume that like most other tax offices, NFT tax will follow existing crypto tax rules. 

Canada is a little different than other tax offices, however. Crypto is subject to either Income Tax or Capital Gains Tax, but it all depends on how you’re trading and at what scale as to whether you’re taxed at a lower Capital Gains Tax rate or at your normal Income Tax rate. The CRA decides this on a case by case basis, but if you’re trading NFTs to make money, there is a good chance you’ll pay Income Tax instead of Capital Gains Tax.

This said, for those trading, the tax rules on NFTs in Canada are:

• Buying an NFT with fiat currency: Not taxable.
• Buying an NFT with cryptocurrency: Capital Gains Tax.
• Selling an NFT for crypto or fiat currency: Capital Gains Tax.
• Swapping an NFT for another NFT: Capital Gains Tax.
• Minting an NFT: Not taxable.
• Farming NFTs: Likely subject to Income Tax.
• Gifting an NFT: Capital Gains Tax.

Find out more about how crypto is taxed in Canada.

How Koinly helps you deal with NFT taxes

Koinly is a crypto tax calculator that simplifies crypto tax. All you need to do is import your crypto transactions and it calculates your capital gains, losses, income and expenses in one simple tax summary. 

Koinly imports NFTs (ERC-721) automatically for most EVM-based blockchains such as ETH, BSC, FTM, AVAX, Poly, Cronos etc. We are still working on support for ERC-1155 NFTs as well as NFT support for other chains, such as SOL, WAX, XTZ and more. To add your unsupported NFTs to Koinly, please see how to manually add NFT trades.

Once you’ve added your NFT transaction(s), Koinly calculates the proceeds, gains or losses and adds it to your tax report.

You can download specific tax reports for your local tax office in Koinly. For example, the IRS Form 8949 and Schedule D for the US, HMRC Capital Gains Summary for the UK, or the ATO myTax report for Australia.