Chapter 1: Introduction to Generative NFTs

Let’s explore the effective method for raising significant funding in a short time frame. (Tip: Share this with those interested in generative NFTs.)

💡 This article is crafted as a quick read, presented in a Q&A format, serving as an overview of generative NFTs, distinct from standard NFTs. 💡

Can projects genuinely secure millions overnight via NFTs?

✅ Certainly! Numerous NFT drops have achieved this, and I can confirm this from my own experience with multiple successful multi-million dollar initiatives over the past year. My company adopted the motto "We help mint millionaires!™" because we have repeatedly witnessed this success. However, it's important to note that these new "millionaires" typically become executives of well-funded projects. We’ve since updated our slogan to "Web3 Tech & Strategy Experts."

What defines "generative" NFTs?

✅ Unlike conventional NFTs, which are unique digital assets (think a JPG of your pet), generative NFTs operate differently. Picture an artist creating a cat with various components: a shirt, a necklace, a hat, and a backdrop. Instead of drawing a single image, the artist creates numerous versions of each element—like 10 fur colors, 10 shirts, etc. A coder then combines these elements algorithmically, resulting in thousands of unique images. With just 50 components, you could produce 100,000 different cat images! Artists generally work with around 200 components, and we often create sets of 10,000.

Is it solely about cats?

✅ Not at all! While animals or characters are common themes, the renowned generative NFT collection, Bored Ape Yacht Club, serves as a prime example. Each ape NFT is valued at approximately 100 ETH, which, given the current low value of ETH, equates to around $200,000! Check OpenSea for insights into typical characters and animals depicted. While not all generative NFTs reach such heights, many can still be worth hundreds or thousands of dollars, depending on the ETH price.

So, once you have 10,000 character images, you sell them all online?

✅ Exactly! This is where my company assists NFT drop teams. We handle everything from programming the generative art and data files to creating smart contracts for crypto sales, developing web applications for purchases, and guiding teams through the entire tech and management process.

What is the capital raised through this method?

✅ A typical NFT drop can generate around 800 ETH, approximately $1 million (noting that ETH is currently experiencing a downturn; usually, it can exceed $2 million). The total revenue depends on the number of NFTs (usually 10,000) and their price (typically ranging from 0.07 to 0.1 ETH, with higher values reflecting greater utility).

And what happens next? Do NFT owners just relax in the Bahamas?

✅ Not quite! While technically there are few regulations, generative NFT drops often serve as rapid launching pads for various real-world projects, such as startups, games, non-profits, art initiatives, and more. The key is to (1) utilize the funds as promised and (2) ensure that buyers appreciate the intended use of the funds. Additionally, buyers enjoy owning unique, quality digital art.

Community engagement is essential, correct?

✅ Absolutely! While generative NFTs provide exciting funding opportunities, the most successful projects prioritize building active, engaging communities. This aspect is fundamental to generative NFTs. A thriving community can greatly enhance your chances of success in this space.

Are generative NFT sets superior to standalone art?

✅ They aren't necessarily better; they simply serve different purposes. If you aim to create and sell unique digital art, that’s fantastic! Many collectors appreciate "1/1 digital art." However, if your vision entails a larger initiative requiring substantial funding, generative NFTs are a strong option.

What does "providing benefits to buyers" mean?

✅ This refers to utility, a term encompassing various advantages and features available to NFT holders. For a deeper understanding, consider reading about NFT roadmaps.

How can I attract buyers for my 10,000 NFTs?

✅ That’s indeed a challenge! With the financial prospects of generative NFTs, many are eager to join the trend. However, the key to success lies in effective marketing. This varies based on numerous factors. Established brands or celebrities may find it easier, but anyone can market their NFTs. The better your art, project, and community, the higher your chances for success.

Why do most buyers invest?

✅ Buyers typically invest due to excitement about the project. They may be fans of the associated team, attracted by the art, interested in the proposed utility, or engaged with the community. Others may believe in the NFT’s potential value appreciation or engage in flipping for quick profits.

What do you mean by "game"?

✅ There’s much more beneath the surface! When we generate 10,000 NFTs, we don’t do so randomly. Instead, we use a rarity table to determine how often specific traits appear. For example, if a cat has 10 shirts, we can assign different probabilities to each. This creates a diverse range of NFTs, some with common traits and others with rare ones, often leading to higher prices for the rarest.

Don’t they all sell for the same price initially?

✅ Initially, yes. Buyers mint NFTs without knowing which they’ll receive, similar to purchasing a collectible card with identical packaging. The "reveal" occurs after all NFTs have been minted, allowing buyers to see their specific NFT, which may be common, rare, or super-rare.

Can all NFTs be resold for more?

✅ Yes, that’s where secondary marketplaces come in, with OpenSea being the largest. Here, buyers can see the collection. During the "prereveal" phase, all NFTs look the same, but once revealed, their rarity becomes apparent. The team can also earn royalties from secondary sales, typically between 5% and 7.5%, which can yield significant revenue over time.

What is the floor price?

✅ The floor price is the lowest cost for any NFT in a set. Success is often measured by the floor price, and if it exceeds the mint price, it indicates increased value for all original mint holders.

Are there unique "1/1s" in generative sets?

✅ Yes, while most NFTs are generated, teams often include unique artworks as ultimate prizes. These special pieces can fetch extraordinary prices.

I have a generative NFT idea. How do I build a team?

✅ It requires a diverse group, including artists, marketers, advisors, and tech partners.

What if I’m a celebrity or influencer without a team?

✅ I recommend starting with the linked article above. My company, GenerativeNFTs.io, specializes in assisting individuals in the NFT space, from team-building to project management. Feel free to reach out to me at [email protected] for guidance.

Jim Dee is a prolific writer, developer, and multimedia creator from Portland. Discover more about him and his work at JPD3.com. Thanks for reading! Image of a cat courtesy of Midjourney AI.