Part 3: How to Buy/Sell NFTs
Buying an NFT
So you have some basic knowledge about NFTs, have had your wallet set-up and are ready to get some skin in the game, where do you get started?
There are predominantly 2 ways to purchase a NFT:
- Minting directly from the project site on launch (You can find new projects on Twitter, wait for their launch date, go to their website, and mint directly from their launch in which you’ll receive a random NFT from their collection). Please DYOD and make sure you’re on the official website, as there are many scams and impersonators. DO NOT click on any links from Twitter/Discord DMs and only click on links from official sources.
2. Buying on secondary market like Magic Eden, Solanart & Alpha Art. After a project has completed their mint, they would apply to be listed on a secondary market. You’ll be able to find most projects on secondary markets by using the search bar.
After clicking on a collection, you’ll able to see all the NFTs in that collection that are on sale. There are a few useful tools and stats that might help you with your purchase. Let me go through some of the terms featured on Magic Eden:
- Floor price - The cheapest available NFT of the collection on sale at the moment
- Total Volume - The total amount of Solana exchanged between buyers and sellers for this collection over ALL marketplaces
- Average Sale Price - The average price of all NFT sales of the collection in the last 24 hours
- Total Listed Count - The total number of NFTs of the collection listed on the marketplace at the moment
These are some metrics that can help you make an informed decision whether to invest in the collection. For example, a high listed count as compared to the total supply for the collection can indicate that that are many holders that are trying to sell their NFT.
You are also able to sort the NFTs listed by attributes, using the filter tool on the left side. This can help you find NFTs with a specific trait that you’re interested in. This is also how users search for rare NFTs of the collection based on the rarity chart by the project (usually on their website or Discord). You may also use rarity sites such as Howrare.is & Moonrank to check the rarity ranking of your NFT, but take note that the rankings on the site are statistically derived might not reflect the actual rarity envisioned by the project team.
Now let’s take a look at a specific NFT that you’re trying to purchase:
As you can see, you can either purchase the NFT at the price set by the seller (in this case 3.2 sol), or Make an offer, which is basically a bid, where the seller can choose to accept it or not. Take note when you place a bid, the sol is taken out of your wallet and held by Magic Eden until the bid is accepted, or you cancel your bid.
Aside from that, there are also other information in the toolbar such as the Mint Address of the NFT (this is to find the NFT on Magic Eden), Owner of NFT (seller’s wallet #), Artist Royalties (% fee taken by the project’s team when you make a sale), and Transaction Fee (% fee taken by Magic Eden when you make a sale).
After purchasing the NFT, it would appear in the ‘Your Collectibles’ tab in your Phantom wallet (similar for other wallets like Solflare). You are able to send/receive it to/from another person, just like sending Solana, as it’s essentially a token that exist on the Solana blockchain.
Lastly, an important point to note is not to buy NFTs from unverified collections as anyone can mint a copy of the NFT and try to pass it off as part of the collection. ONLY purchase it from secondary markets that has verified the collection to protect yourself from scams.
Selling an NFT
So you’ve made a tidy profit on your mint or purchase and you would like to lock-in the profit? Selling the NFT is as simple as buying one, so not to worry.
First thing to understand is that all NFT marketplaces function on a supply-demand basis, which means there must be a willing buyer for every willing seller for a purchase to go through. You can set your price at a 100 sol but if there’s no one willing to purchase it for that price, the sale wouldn’t go through.
So, check if your NFT has any special attributes/rarity, and set your price accordingly. You can refer to the floor price of each attribute using the filter tool, explained above. To sell your NFT, connect your wallet, click on ‘My Items’ and click on the NFT you would like to sell. Afterwards, simply set your price and press ‘List now’ and wait for someone to purchase your NFT! The Solana will automatically be deposited in your wallet after the sale (minus the royalties and transaction fee), so you don’t have to manually check if your NFT sold.
Next, you can see the different tabs on your profile page, which is mostly self-explanatory. Remember above where you can place a bid for NFTs? The ‘Offers made’ tab is where you can see the bids you’ve made for NFTs on the marketplace and the ‘Offers received’ tab shows bids made on your listed NFTs. Lastly, the ‘Activities’ tab shows the transactions made by your wallet on Magic Eden since the start (which can be useful when you have multiple NFTs listed and wonder which one sold).
Take note there is a small network fee involved when listing, de-listing, bidding and buying an NFT (like 0.001 sol) so factor that in when purchasing/selling an NFT.
So this pretty much wraps up the basics of buying and selling NFTs as well as navigation on secondary markets.
Thanks for taking the time to read through my guide and hope it helps you start off your NFT journey. This is the end of Part 3: How to Buy/Sell NFTs. Make sure to follow my Medium page for the next part of the series. Feel free to connect with me on Twitter and let me know if you have any feedback/suggestions for future articles.
Till then, the world is your oyster.
