NFT artists fight over the price of Mints amid a crypto crash

NFT artists fight over the price of Mints amid a crypto crash

Following the general decline in cryptocurrency prices, NFT creators are faced with a trade-off: increase their coin price in crypto terms – or post heavy fiat losses.

The low-cost crypto market favors NFT (non-fungible tokens) collectors as creators, mindful of ethical and pragmatic implications, hesitate to increase their coin prices – the cost of creating a digital collectible on a blockchain like Ethereum.

Sellers seeking to avoid losses often had to double or triple their initial minting prices. Due to price volatility, traditional payment processors are partnering with NFT marketplaces to make fiat payments mainstream in this space.

Social media website 9GAG faced the price dilemma with the recent NFT launch of Memeland “YOU THE REAL MVP”. Memeland held a blind auction on Discord that set the coin price at 5.3 Ether. From the opening of bidding on June 9th to the distribution of NFTs on June 16th, the price of ETH fell from more than $1,800 to below $1,100.

Memeland tweeted it maintained the initial coin price – despite Ether’s decline – to avoid “sending a false message that we were changing the price to maximize profits.”

Memeland went on to thank its buyers for their “trust…despite the poor market conditions.” Artists weigh the continued trust of their buyers when considering whether to increase mints.

Jill Brandenburg, an NFT artist whose Andy Warhol-inspired work was exhibited in Times Square this month, is “giving collectors the benefit of the dip” in ETH.

“If I had to raise my prices and then lower them again, I wouldn’t feel like I was acting ethically towards my collectors,” Brandenburg said. “.12 ETH is .12 ETH no matter what the market determines.”

But with crypto exchanges plagued by liquidity issues and security concerns, collectors are largely not buying the dip. Both primary and secondary NFT sales have fallen by more than 20% in both volume and fiat value over the past week NonFungible.com.

NFT traders face the financial consequences of falling crypto prices. WAGMI Beach priced its new Bubblegoose Ballers NFT collection at two SOL (the native token of Ethereum competitor Solana's blockchain) – around $300 – when the project launched in May.

Last week, WAGMI Beach increased mint to seven SOL to match the original forecast fiat value.

“As we are a prime example of an NFT that truly bridges the gap between Web2 and Web3, our required funding will be viewed in fiat rather than SOL,” the company said tweeted. “So our mint price is still tied to that $250-$300 range, not 2 SOL.”

Staking coins into fiat money is becoming a trendy solution to the volatility of the NFT market. Both Mastercard and Stripe have launched initiatives this year to integrate their payment services into NFT marketplaces. The companies aim to disrupt the system of NFTs exchanged between wallets.

"Cryptocurrency enthusiasts are used to this process. But for most people it's not easy, it's not intuitive. We think it should be much simpler," said Raj Dhamodharan, a blockchain-focused manager at Mastercard, in a January blog post.

If Mastercard's plan is successful, Mints will be available via fiat.

Sean Stein Smith, a Lehman College professor who studies blockchain, believes price volatility is a “major barrier” to wider adoption of unique digital collectibles. The stability of fiat currency as a backdrop for buyers and sellers would attract new consumers to NFTs and “attract ideas and capital for fundamentally more sound projects,” Smith said.

Smith emphasized that the technological basis of NFTs remains unchanged - despite falling crypto values. Focusing only on the price instead of the potential Use cases is like “Focus on the crust of the steak [instead of] how it’s cooked and how it tastes.”

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The post NFT Artists Struggle To Price Mints Amid Crypto Crash is not financial advice.