4 Important NFT Terms You Need to Know
Non-fungible tokens (NFTs) are digital assets stored on the blockchain to signify ownership of a specific asset, e.g., a piece of art or music album. Buyers purchase a token that gives them ownership of the asset, although the original artist or creator maintains its copyright. Although NFTs have been around for less than a decade, the market reached a valuation of $250 million in 2020 and has continued to grow with the involvement of corporations and sports leagues. For instance, Burger King launched an NFT campaign in September 2021, while the NBA is selling highlight clips as NFTs.
Similar to the cryptocurrency space, there are several slang terms and definitions commonly used in the NFT ecosystem. The following is a look at four key terms.
1. 10k Project
The CryptoPunks collection, released in 2017, popularized a specific type of NFT focused on unique art and avatar character renderings. CryptoPunks involve 10,000 uniquely generated characters, each of which are stored on the Ethereum blockchain and owned by a single individual. Each character can be purchased on Ethereum's embedded marketplace for a specific price as listed by the owner. As of February 2, 2022, the lowest price for a CryptoPunk was 78.95 ETH, which, at the time, was equal to around $211,000.
The success of CryptoPunks led to several other art projects involving 10,000 unique avatars, now known as 10k projects. The Bored Ape Yacht Club is one of many popular ape-themed 10k projects. Others include Cool Cats, CrypToadz, and CyberKongz. Not all of these have 10,000 generative NFTs, however.
2. Burn
The aforementioned 10k projects are among the most popular of the NFT subset and have sold tokens/avatars for thousands of dollars. Others, however, may have fallen short in selling their desired amount of NFTs in a specific collection and essentially choose to destroy those NFTs. This is known as burning. Alternatively, some projects allow owners to "burn" a pair of NFTs to earn a single, rarer NFT.
3. Gas
Gas, essentially, is a tax placed on all transactions across the blockchain network. Fees vary based on supply and demand. Ethereum, which is easily the most popular NFT blockchain, usually has gas fees exceeding $50 for each transaction. Consumers can find cheaper alternatives on less congested networks like Tezos and Solana.
4. Mint
Mint is used to describe the creation and circulation of assets on a blockchain. On Ethereum, digital assets are minted and traded as ERC720 Tokens. While the process can be confusing for those unfamiliar with the NFT ecosystem, platforms like Rarible and OpenSea make it relatively easy. Creators need to pay a gas fee to mint their NFTs.