Technology has given animators many opportunities for growth and career advancement, with its features championing accessibility and convenience from production to promotion.
One of the more popular avenues for success is through selling digital assets on the blockchain. In the art industry, more specifically the animation industry, this refers to selling NFTs.
What Are NFTs?
An NFT or “Non-Fungible Token” is a unique digital asset representing real objects like digital artworks, tweets, pictures, music, and videos.
It’s a type of cryptocurrency and is built using the same programming code as Bitcoin or Ethereum. The difference is that these NFTs cannot be exchanged for the same product.
They store valuable extra information that allows them to take the form of anything digital that you own, like MP4, MP3, GIFs, and JPEGs, turning them into crypto art.
What Is Crypto Art?
Crypto art is simply digital art with guaranteed ownership from NFTs. In the digital art industry, crypto art transactions are done through NFTs, which verify the authenticity and ownership of the art.
Essentially, NFTs assign the art piece or animated video a unique ID number that is updated and validated whenever the art is bought, sold, or engaged in any similar transaction.
NFTs are changing the way animators conduct their transactions. In this article, we list down the advantages and disadvantages of NFTs and how to make NFT art as an animator.
Advantages of Animated NFTs
1) Preserve the Authenticity of Your Animated Videos
With a special code attached to your crypto art, it not only verifies its ownership but also preserves the authenticity of your animated videos by giving them a distinct value that makes them unique despite multiple similarities such as in pricing or materials.
This doesn’t mean your animated videos will no longer be replicated. Digital art is very easy to replicate provided you have the right tools and skills, but while anyone can still recreate and repost your animated videos, those duplicates will not hold the same value as the original piece.
The unique code assigned to your crypto art makes them special and one-of-a-kind when conducting any transaction.
As said by writer Patrick Lum and editor Lucy Clark in The Guardian’s article about crypto art, “...All that crypto art really does is say ‘this specific copy of it is unique and confirm it with the world.”
2) Receive Comprehensive Royalties for Animated Videos
Royalties should be a standard practice among animated video owners and those who buy and avail their services. It benefits both parties by granting the buyer access to use the animated video and giving the owner their fair share in future sales.
Unfortunately, many individual animators and small animation studios cannot reinforce such arrangements because of the hassle of tracking future sales.
But through NFTs and the smart contracts that come along with it, royalty arrangements are easily established for your crypto art. These are executed whenever a transaction takes place, automatically granting both parties the privileges they deserve.
A smart contract is a series of commands running with a business logic that executes the exchange of money, delivery of services, enforcement of privacy protection, and access to NFT content once predetermined conditions are met.
As an animation studio owner, it will make sure the rights to your animation services are protected.
To set up a smart contract in Ethereum, you need to be familiar with the smart contract coding and have enough ETH to deploy it, which costs higher. Once you deploy to the network, it will run as programmed.
Additionally, these resale transactions can occur at any point in time. According to New York University professor Amy Whitaker, your NFT artworks circulate through the marketplace over time.
3) Sell Your Animated Videos In New Marketplaces
GIF by gilmoregirls via GIPHY
The world of cryptocurrency offers a decentralized marketplace outside your marketplaces for animators and social media platforms. That means a possibility of new clients for your animation services.
This new stage of displaying and promoting your animated videos will allow you to safely and conveniently earn more within a competitive market. Some animation clients will probably not pay as much for your animated videos if they were promoted traditionally.
Take the digital collage “Everydays — The First 5000 Days” created by Beeple, for instance. The series of JPEGs that smashed records by garnering up to 69 million dollars. Many argue that if these photos were sold in the traditional marketplace, they wouldn’t have been valued as such.
Disadvantages of NFTs
While NFTs open up new avenues for success and convenience for animation studio owners, they also have their fair share of possible downsides.
1) Pay High Gas Fees
Gas fees are real-time fees that you have to pay upon every transaction.
Doing almost anything on the Ethereum blockchain requires gas to execute for transactions to occur, whether it’s sending tokens or interacting with a contract. The gas fees make up for the computational power needed to process such transactions.
While it’s not necessarily a con in crypto art, it can certainly be a strain on your crypto wallet, especially if the fees become unexpectedly high.
This price is determined by the supply and demand between the network’s miners and can be rather tricky to navigate regardless of your experience because the prices change every second.
As an animator, you will need to be well-versed in trading or hire a trader who knows how to balance the time and settle on a price that will yield a good or reasonable profit.
Take note that you’ll be required to pay for the gas regardless of whether your transaction succeeds or not. Even if you fail, miners will still be computing to confirm and execute the failed transaction.
2) Increase Your Carbon Footprint and Energy Consumption
GIF by abcnetwork via GIPHY
Perhaps the most popular downside to NFTs and crypto art is their impact on the environment, specifically, their strong energy consumption and carbon footprint.
The Ethereum blockchain, the platform housing NFTs, is considered outdated and unable to adapt to the increasing demands on the platform. To mine Ether requires a rough annual estimate of 44.94 terawatt-hours of electrical energy, making it responsible for about 21.35 metric tons of carbon dioxide per year.
Writer Sophie Lewis in a CBS article likened the energy consumption to those of countries like Qatar and Hungary yearly.
Most of the carbon footprint coming from NFTs alone is due to the various transactions like bidding, canceling, selling, minting, and transferring ownership. This is even considered to be ten times higher than average Ethereum transactions.
As an animator, you must weigh the impact of your animated videos on the environment. You wouldn’t want something created in good spirits to lead to harmful environmental consequences.
3) Difficulty in Navigating Complex Cryptocurrency Landscape
GIF by thebachelor via GIPHY
While most, if not all, animation studio owners and salespersons are tech-savvy, dabbling in the world of cryptocurrency can be somewhat confusing for the first few times.
Blockchain-fluent artist and developer Addie Wagenknecht told Artnet News that the technology in NFTs and the crypto economy is very complex to understand as there are so many terms and platforms to consider.
Before selling your animated videos, you have to familiarize yourself with the crypto space from a technological standpoint.
Its democratic and unregulated nature also leaves room for predators and individuals looking to take advantage of first-time traders. Once you fall victim, there are very few people you could turn to.
According to Ameer Suhayb Carter, designer and crypto consultant of Artnet News, “You can’t rely on the technology, and things built on this technology, to be inclusive.”
Getting into this unfamiliar marketplace will make you encounter different words. Here’s a quick glossary of terms that can help animators better understand the crypto environment.
- Alpha - New information
- Blockchain - A digital public ledger that records and stores information on different transactions across a system of computers
- DeFi - Decentralized finance. This refers to the different financial crypto applications that aren’t controlled or connected to a single source.
- Drop - The act of putting your crypto art for sale
- Dry powder - Cash
- Ether (ETH) - Native cryptocurrency of the open source blockchain platform, Ethereum. It was invented in 2013 and is second to Bitcoin in capitalization.
- Ethereum - An online platform or network that's home to digital money, global payments, and applications. It is a decentralized blockchain that also allows you to deploy a smart contract.
- Etherscan - Known as a “Block Explorer”. It is an analytics platform for Ethereum that tracks when gas is at its lowest. Using Etherscan allows users to view their balance and verify transactions by typing an address into its search box.
- Gas (fees) - Real-time cost of any crypto transaction that’s paid in Ether and set by miners based on the supply and demand.
- Gas Tracker - A service showing the cheapest times to transact. Look for the gas tracker to go below 100.
- Hashmask - A type of digital art NFT that can be renamed with the help of an NCT (Name Change Tokens) and whose name can be interchanged with all the other participants of the art network. Whenever you purchase this type of NFT, you can always personalize it by changing its name. Hashmask NFTs were made by the contribution of 70 artists all around the world.
- Loot box - A transaction in which you don’t know what NFT you bought until it’s revealed after purchase
- Mint - The process of your digital art becoming an NFT
- NCT - Name-change tokens within the Hashmask
- Rug Pull - A scam
4) Uncertainties in Preserving Your Animated Videos
With everything specially coded in the NFTs you list into a platform, it seems that the preservation of your animation videos is promised and definitive. But there are still some uncertainties that come with this digital marketplace.
First is the maintenance required to keep the crypto platforms up and running.
Writer and editor Gina Fairly of Arthub writes that websites are frequently subjected to routine maintenance.
What then would happen if the website encountered an error, crashed, or failed to load? Or if your NFT link no longer directs you to your animated video? That may result in a loss of your digital assets.
Additionally, what would happen if the platform or the NFT marketplace suddenly goes out of business? You’d have to think fast, or you’d lose the value your animated videos have accumulated over time.
Lastly, there’s the issue of hacking and losing your crypto tools like your wallet and key. Once that’s gone, you’ve pretty much lost everything that linked to those tools. There’s virtually not much else you can do.
How to Make NFTs as an Animator
Clearly, creating, buying, and selling NFTs can be tricky. It can sometimes make you lose money rather than earn. This is because the trading process can be a gamble if you’re not familiar with the multiple unclear fees discussed above.
But if you think you’re ready to get into the world of NFTs and cryptocurrency, then we’ve compiled a practical list of steps on how to make NFTs as an animator.
1) Choose An NFT Platform
GIF by abcnetwork via GIPHY
First, select an NFT and cryptocurrency platform to facilitate your crypto art creation, buying, and selling. There are lots of NFT platforms to choose from such as Nifty Gateway, Rarible, OpenSea, and NFT Stars.
Different NFTs platforms can also cater to specific needs, like how YellowHeart is a music-centric platform and how NBA Top Shot is for NBA highlight collectibles. We advise you to use Rarible, a community-centered platform, if you’re still starting out as the platform is simple and straightforward to use.
To mint –– also known as generate –– your NFTs on any of these platforms, you’ll need to pay a certain fee, usually in the cryptocurrency of Ether. Take note that the value of Ether tends to wildly fluctuate.
You can also look into the different platforms to familiarize yourself and help you decide which to opt for.
2) Open a Digital Wallet
Second, create a “digital wallet” to purchase Ether or ETH. This will be used in your transactions by connecting it to the NFT platform of your choice.
One of the more common digital wallets is Binance wallet and MetaMask, which is available as both a browser and an app. Users consider these to be one of the best NFT wallets for collectors and creators.
You may also install an extension on your computer.
To create a digital wallet, you’ll have to download the software and agree to the seed phrase. A seed phrase is a set of 12 to 24 words that gives you access to your digital wallet.
If you already want to add money, aka ETH, to your digital wallet, you can do so by paying through Apple Pay or a debit card. This ETH will be used for buying and/or trading NFTs.
You can then sign up to your preferred NFT platform and connect your digital wallet.
While the rules may slightly vary across different platforms, you can typically connect your wallet on the app itself or by adding the digital wallet extension on your browser.
3) Drop Your Animated Digital Art
GIF by boomerangtoons via GIPHY
Third, upload your NFT on the platform and tokenize your animated video. Different NFT platforms may have specific requirements in uploading or creating an NFT.
But generally, such as on platforms like Rarible, you can simply upload your animated videos as long as it's a TXT, PNG, GIF, WEBP, MP4, or MP3 file, and up to 30MB in size. Remember that minting your NFT requires you to pay a certain fee as indicated early on.
Once you upload your NFT, add in your price and the necessary description like the title of your animated video and input the percentage of royalties you wish to receive for future resales on your art. Rarible also asks whether you’d like to mint your work as a series or a one-of-a-kind artwork.
4) Promote Your Animated NFT Art
Once you have listed your NFT on a platform, anyone can bid on it. All that’s left now is to promote your work and wait for ETH to come in.
There are many ways for you to promote your NFT. In essence, you can promote your listing on Discord groups, online communities built for specific NFT platforms or crypto communities, or even on your own social media accounts.
Why You Should Consider Making an Animation NFT
Selling crypto art as an animator may seem like a bright and innovative idea, but there are so many things to consider before doing so. To help get you started, we provided you with the advantages and disadvantages in buying and selling NFTs.
The advantages include your animated videos carrying a unique value, opening your animation business to a whole new range of art and animation clients, and receiving a comprehensive royalties arrangement for your animated videos.
On the other hand, the disadvantages include difficulties navigating through an unfamiliar technological marketplace, the harsh effects of NFTs on the environment, the requirement to pay gas fees, and the uncertainties in preserving your animation videos and digital assets.
Image by executium via Unsplash
To sell your NFTs, first, select your preferred NFT platform as there are tons to choose from. Next, create a digital wallet, purchase Ether, and connect it to your chosen platform.
From there, you can finally upload your animated videos. Your NFT platform will mint your animated videos, turning them into crypto art on the blockchain. And finally, you can promote your listing on virtual communities and your social media platforms.
Remember that while it takes time and effort to invest in new technologies like cryptocurrency, there are tons of new opportunities that come with it. As an animation studio owner, it’s your responsibility to invest in innovative ways to attract more audiences and expand your animation business.
For more tips on developing your business skills as a freelance animator or animation studio owner, take part in our informative free masterclass and download a copy of our free marketing handbook.