From The BlogWeb3 & NFTsDon’t Miss the Power of NFT Platform Fees

Don’t Miss the Power of NFT Platform Fees

Don't miss the power of NFT platform fees

So you’ve probably heard about major NFT marketplaces eliminating creator royalties. The debate surrounding this topic is an interesting one. Projects are fighting to ensure revenue is protected, and platforms are looking to improve user experience by cutting costs. What seems to be missing from this conversation is the power of owning a dedicated NFT marketplace platform and the revenue potential of managing your platform’s fees. 

To put this into perspective, the role of NFT marketplaces must be understood. These are more than just platforms to trade assets, but virtual hubs that impact the flow of engagement and revenue. The owners of these platforms have a massive impact on all Web3 businesses that are listed there, which is why we will see more and more NFT communities take this power into their own hands. 

NFT Marketplaces & Web3 Business Models

NFT marketplaces are the ecosystems that drive business models for projects of all sizes. The influence of these platforms carries much weight, most noticeably in the recent trend around eliminating creator royalties. Projects aiming to take control of their business model and generate sustainable revenue are increasingly considering owning a dedicated marketplace.

The core argument for this strategy is a simple one, marketplaces control the fees and fees generate revenue. Currently, transaction fees across the major NFT marketplaces are set between 1 – 2.5%. This adds up with millions of NFTs listed on top platforms and major collections selling for upwards of 6-7 figures. 

Decentralization is at the heart of Web3, yet centralized marketplaces now drive most of the revenue in the space. We believe this dynamic will begin to flip, as niche branded marketplaces become more popular. Projects that take this route will experience more control over their business model, with the world of possibilities that platform fees represent. 

What are Conditional NFT Marketplace Fees?

NFT projects with their own marketplace have the power to turn platform fees into an engaging experience that acquires and retains users. While most of the industry is focused on the elimination of creator royalties, conditional NFT platform fees have the potential to transform business models and still put user experience first. 

This is possible due to the setting of conditional fees, which gamify platform activity by tailoring fees to your community. Traditional platform fees are one-size-fits-all, applied to buyers and sellers based on the transaction amount. Conditional fees are dynamic, incentivizing engagement and rewarding community members via discounts based on activity. 

These dynamic discounts help deliver engagement in targeted ways. If you want to incentivize certain activity on your platform, fees can be reduced to encourage specific actions. Perhaps it’s promoting a partner’s collection with no fees for a day, or pushing for more trading volume throughout a specific week by cutting fees 50%. There are many conditional fee strategies to consider when you own your Web3 storefront. 

Ways to Set NFT Marketplace Fees

The sky’s the limit, and creative fee strategies have the potential to drive revenue and community growth. There are many directions this approach can take, but here are just a few examples…

Weekly Promos: Platform fees are reduced by 50% every Tuesday.

Loyalty Rewards: Top 10% of active monthly users receive 25% discount on platform fees

Token Utility: Discount users that hold your token or a partner’s token. 

These three examples represent the tip of the iceberg when it comes to NFT marketplace customization. The revenue generated via this strategy is still more than you receive from a 3rd party marketplace, the experience becomes gamified as your community is rewarded, and the marketing potential is massive. 

Projects in the space are all looking for key differentiators, and right now, platform fees can play that role. Marketing opportunities in Web3 are still being unlocked, and the value proposition of gamified fees that benefit the community is significant. Stand-out from the barrage of NFT collections that are simply listed on a marketplace and consuming its community’s fees. 

This is a major focus of ours here at Liteflow. We aim to empower NFT brands and creators to seize their business model with end-to-end and modular Web3 infrastructure. We bring the flexibility of building Web3 projects according to your specific needs. If you’d like to explore how to bring your ideas to life, reach out to us at Liteflow, and schedule a call with one of our experts. 

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