NFTs Explained

NFTs — or Non-Fungible Tokens — are a unique type of digital asset that have taken the world by storm.  

An NFT is a digital token that represents ownership of a unique digital item. This item can be a work of digital art, a video clip, a tweet, an in-game item from a video game, or even an online representation of a physical object. The NFT serves as a certificate of authenticity and ownership, verifying that the digital item is original and belongs to the token holder. 

The magic of NFTs lies in blockchain technology. Each NFT is minted (created) on a blockchain and features its own smart contract — code that defines the token's properties and governs its behavior. The smart contracts within an NFT can specify details like the creator's identity, the item's history of ownership, royalty terms for future sales, and much more. Once minted, the NFT's details are recorded on the blockchain, providing a permanent, tamper-proof history of ownership and transactions.

Digital art has been transformed by NFTs, enabling artists to directly market their creations to buyers, sometimes at sums that rival the world’s most sought-after fine art. A standout example is the sale of Beeple's "Everydays: The First 5000 Days," which fetched $69 million at a Christie's auction in 2021. Today, it’s estimated that the global NFT market is worth around 70 billion dollars in total. The remarkable growth of the NFT industry has created new career paths for artists, musicians, and developers.

Beyond art, NFTs are being used in gaming for unique in-game items, in music for exclusive albums or concert tickets, and even in real estate representing ownership of virtual land in digital worlds. Because NFTs are akin to a certificate of ownership and authenticity, the items they represent are endless. However, there are a number of types of NFTs that have become popular over the past few years. 

Some of the most common forms of NFTs today include: 

Digital artwork: paintings, illustrations, animations, profile pictures, and 3D models.
Collectibles: Rare items, often art,  are released as part of a collection.
Music NFTs: Songs, albums, or even concert tickets and merchandise.
Gaming NFTs: In-game assets like characters, weapons, skins, or virtual land within games.
Identity and Documents: Certification of educational credentials, licenses, or other personal documents.
Utility NFTs: Tokens that grant access to exclusive content, communities, or services.

While you can mint and trade NFTs on a number of blockchain networks, Solana has emerged as the home of NFTs thanks to a thriving ecosystem with millions of people all over the world participating. On Solana, over 500 million NFTs have been minted so far, held across over 14 million wallets. 

There are many reasons for Solana’s leading role in the NFT ecosystem. From a technological perspective, Solana’s unique architecture means it can execute thousands of transactions per second at significantly lower fees than other blockchain networks. That makes it faster and more affordable to mint and exchange NFTs, meaning it is accessible to anyone. Because of this, Solana is home to a huge, global community of creatives and developers and has the most active NFT ecosystem in all of web3.

There’s a whole sector of apps and platforms for creating, trading, sharing NFTs, and for engaging with the wider NFT community. 

Magic Eden — Collector-centric platform for creating, discovering, and collecting unique NFTs
Tensor — Marketplace on Solana with advanced suite of trading tools, one of the most popular places to trade NFTs on Solana 
DRiP — Follow creators and get free NFTs every week 
Star Atlas — In the Star Atlas game universe, in-game items like ships and gear can be traded via NFTs
Dialect — A messaging platform that features NFT stickers
Exchange Art — Fine art marketplace focused on unique art by independent creators
Mallow — A marketplace specialized in unique, 1-of-1 NFTs.
Primitives — Social platform for minting, sharing, and collecting digital art

Many people collect NFTs like digital art or collectibles and participate as creators, curators, or fans. Many others approach NFTs as speculative assets. That’s why hundreds of millions of dollars worth of NFTs exchanges hands every week. Trading NFTs is similar to trading memecoins, in that the value of the assets is based primarily on community and qualitative values, rather than traditional assets.

For active NFT traders, a dashboard like Step Finance’s NFT Analytics is an essential tool for overviews on the NFT market and the performance of specific collections. 

Memecoins are cryptocurrencies inspired by internet memes, and represent the fun side of crypto. Want to learn more? Check out our handy guide that explains: What Are Memecoins?

There are thousands of NFT collections on Solana, but here are a few examples of the most popular NFTs today to get you familiar: 

Mad Lads — A collection of 10,000 NFTs with an art style that’s anime meets Peaky Blinders
Claynosaurs — A collection of 10,000 NFTs of animated dinosaurs made by former Disney, HBO, and WB animators
Solana Monkey Business — A collection of 5000 randomly generated Monkeys, and record holder of the largest NFT sale on Solana to date at $2 million USD
Star Atlas — In the Star Atlas game universe, in-game items like ships and gear can be traded via NFTs

One of the best things about Solana is that it’s easy to start your journey and get involved with NFTs, and even go from collector to creator  If you’re creating, collecting, or trading NFTs, you can keep them in your crypto wallet just like any other digital asset. Solflare makes it easy to hold, send, and receive NFTs while interacting directly with your favorite NFT platforms. 

The Step Dashboard also features  an NFT gallery to give you an overview of everything in your wallet.

Check out this handy walkthrough on how to access NFTs in your Solflare wallet, and get started today!