Ethereum NFTs are notorious for having super high gas fees. Sometimes the gas fees even exceed the cost of NFTs. Such provisions make it impossible for beginners to get NFTs at their desired price. Even for advanced NFT buyers, high gas fees affects the profitability of NFTs, especially since the crypto winter caused NFT prices to plummet.
Through this article, we intend to show you two unique solutions that can help you buy NFTs with much less gas fees.
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The Challenge of Ethereum Gas Fees
Ethereum is the primary blockchain for NFTs, but also is notorious for its high gas fees. The high gas fees on Ethereum are a result of its network congestion due to slow transaction speed. The typical NFT gas fees on Ethereum are at $19-$22.
This high gas fees can make several NFTs unprofitable as many times gas fees would even exceed the price of the NFTs. Here are some NFTs that cost even lower than the gas fees. For example, the planetfall NFT has a floor price of $6.73. In such cases
Even though Ethereum offers unparalleled security and a vast ecosystem, its gas fees is going to make this NFT uneconomical. This may plummet sales for cheap NFT projects.
First Solution: Layer 2 Blockchains
Layer 2 blockchains offer a viable solution to this challenge by providing platforms where transactions can occur with significantly lower fees. L2 solutions work atop the Ethereum network, offering faster and more cost-effective transactions while still maintaining the security and integrity of the main Ethereum blockchain.
Polygon: A Brief Introduction
Polygon (formerly known as Matic Network) is a leading L2 scaling solution that aims to provide cheap transactions for Ethereum users. It enables scalable, secure, and instant transactions with minimal fees. The gas fees on Polygon are 0.001-0.003 MATIC for all NFT transactions which translates to a max of $0.008 USD.
Polygon has gained popularity among NFT creators and investors for its ability to drastically reduce transaction costs without sacrificing the security benefits of the Ethereum network. By buying NFTs and then transferring those on Polygon, investors can enjoy the best of both worlds: Ethereum’s robust ecosystem and the low-cost, high-speed transactions enabled by Polygon.
Arbitrum One: Expanding the Possibilities
Arbitrum One, another promising L2 solution, focuses on optimizing Ethereum’s scalability and transaction efficiency through optimistic rollups. This technology allows for the batching of multiple transactions off-chain before settling them on the Ethereum mainnet, significantly reducing individual transaction costs and improving scalability. For NFT investors, Arbitrum One offers an attractive platform for engaging with digital assets in a more cost-effective manner.
Why NFTs Are Popular as an Investment Strategy
NFTs have captivated the attention of investors, especially during market downturns, for several reasons:
- Diversification: NFTs provide an alternative investment that is not directly correlated with traditional financial markets, offering a hedge against market volatility.
- Ownership and Scarcity: Each NFT is unique, with verifiable ownership recorded on the blockchain. This scarcity and uniqueness can add value to digital assets as collectibles or art pieces.
- Potential for High Returns: While risky, NFTs have shown the potential for significant returns on investment, with some pieces appreciating in value due to their rarity, demand, and the reputation of the creators.
- Community and Utility: Many NFT projects offer additional benefits, such as access to exclusive communities or events, adding value beyond the asset itself.
Don’t Have Money, We offer Buy Now Pay Later in NFTs
Simple 6-step buying process to make your NFT buying experience the best in the world.
- Prepare Your Wallet:
- Ensure you have a non-custodial wallet like MetaMask set up.
- Make sure you have some ETH for gas fees and initial payments.
- Sign Up on Cyan:
- No account creation is needed; simply connect your wallet through the “Connect Wallet” button on Cyan’s app.
- Supported wallets include MetaMask, Wallet Connect, and others like Unstoppable Domains, Rainbow, and Rabbit.
- Browse NFT Collections:
- Start window shopping without connecting your wallet by browsing the available collections on Cyan.
- Toggle between grid view and table view to see NFTs in your preferred format.
- Use the filter button to narrow down your search based on desired traits.
- Select an NFT and View Financing Terms:
- Click on an NFT to view its details and open up the financing terms.
- Choose your down payment amount and loan length. Additional loan details can be viewed by clicking the “+” button in the Payment Schedule section.
- Enable Automatic Repayments (Optional):
- Opt for automatic repayments to have funds deducted from your wallet or Cyan Wallet automatically, ensuring timely payments and avoiding defaults.
- Start the Buying Process:
- Click “Start” to initiate the purchase. A Cyan Wallet will be created for first-time buyers or loan users as an escrow account for the NFT.
- Funds from Cyan Vaults will be transferred to buy the NFT, which may include a credit check process.
Buying guide for Buy Now and Pay Later for NFTs.
How to Repay these NFT Loans
Most loans have a monthly repayment schedule, payable every 30 days. Loans as short as or shorter than one month will have only one repayment.
- Head to your Account, and select the ‘Loan’ option in the menu.
- Locate your loan and click on ‘Pay’.
- Select multiple if making a bulk repayment.
We also allow you to cancel your NFT loan if do not want to own that NFT. You have the ability to sell the NFT and simultaneously use the proceeds to pay off your loan through the same repayment option as above.
Pro Tip: A bulk repayment is an easy way to make multiple payments in one transaction and save on gas fees.
Conclusion
While Ethereum’s high gas fees have been a barrier to entry for many potential NFT investors, Layer 2 blockchains like Polygon and Arbitrum One present viable solutions for minimizing transaction costs. By leveraging these platforms, investors can participate in the burgeoning NFT market more affordably, taking advantage of the diversification, ownership, and potential for high returns that NFTs offer. As the digital asset landscape continues to evolve, L2 solutions will play a crucial role in making NFT investments more accessible to a broader audience.
