In 2021 we saw the trading volume of NFTs skyrocket to nearly $25 billion. During this time, thought leaders in the NFT space started to address the thousands of newly minted NFTs’ strain on their respective blockchains.
Towards the end of 2021, the most widely accepted solution to this increase in minting volume became lazy NFT minting. Despite its wide adoption, we recognize that there are still unanswered questions about lazy NFT minting.
In this article, we explore the most common questions about lazy NFT minting and explore how the practice fits into the future of the NFT space.
What is lazy NFT minting?
Lazy minting is when an NFT is listed for sale, typically on an NFT marketplace, and is only minted when it sells.
To better understand the challenges of NFT minting, we will discuss the impact of network congestion caused by NFT creation and its effect on both buyers and sellers of NFTs.
Understanding NFT minting basics
The term “NFT minting” refers to how NFTs are created. If an NFT is a set of information written to a blockchain, then minting is merely the act of creating the non-fungible token by adding the collection of information to the blockchain. After an NFT is minted, it can then be traded between wallets. However, all transactions involving the NFT only point to the original token.
During this minting process, the creator of the NFT, or the person doing the minting, is charged a gas fee. The gas fee is a fee charged in exchange for the computational energy (in the case of proof-of-work blockchains) or the tokens staked (in the case of proof-of-stake blockchains) used when validating the new block.
Much like how the demand of automobile drivers primarily determines the price of gasoline for cars, the gas fee is determined mainly by the demand of users trying to write to the blockchain. When many people try to mint NFTs or write other information to the blockchain, the gas fee goes up.
How lazy NFT minting helps address high gas fees
Instead of minting an NFT as soon as it is listed for sale on a marketplace, lazy minting delays the actual creation of the NFT until the NFT has sold. Once the NFT sells, the marketplace is responsible for minting the NFT and transferring it to the buyer.
This has one obvious advantage — the seller does not need to pay the cost of minting until the NFT has sold. The cost of minting is passed on entirely to the buyer on other platforms.
In addition to delaying the gas fee, it decreases network traffic because only NFTs that sell are minted.
Lazy minting vs. paid minting
While lazy minting may seem intuitive, it is still not the standard on every NFT minting platform. In some cases, a creator may want to mint an NFT regardless of whether or not it sells. In other cases, they may wish to mint the NFT and keep it for themselves.
The key differences between the two minting strategies are when the NFT is minted and who pays the gas fee for the minting.
Lazy NFT minting can delay the minting process until a buyer has already sent funds or, in the case of gas price spikes, can also delay the minting process until gas fees settle to a more reasonable level. While this second case may sound rare, high network traffic caused by multiple large projects minting their NFTs in a short period caused the Ethereum gas price to spike by up to 30 times normal levels.
On the other hand, paid minting ensures that an NFT is minted on demand. Due to the cost of minting on the Ethereum and similar networks, this method has fallen out of favor as the minter runs the risk that they will never recoup the cost of minting if the NFT does not sell.
Why does Enshrine lazy mint NFTs?
When designing our platform, we needed to decide whether or not we should spend the extra time to implement lazy minting. After analyzing all options available to us, we felt that we must enforce lazy NFT minting to remain on the cutting edge of NFT platforms.
We pass the cost savings on to creators
Creators are at the forefront of every decision that we make. To keep our costs as low as possible, we realized that lazy NFT minting is the only option that allows us to mint only when gas fees are low.
By doing this, we were able to lower our platform fee, ensuring that creators earn more when minting on Enshrine.
Lazy NFT minting results in a smaller carbon footprint
We want to ensure that we reduce the environmental impact of our platform as much as possible.
When network traffic is high, the incremental carbon emissions incurred by minting are much higher than when there is less network traffic. While this statement is intuitive, we still see that most platforms naively mint NFTs regardless of current gas prices.
Enshrine believes that when an NFT is minted can and should be done with the environmental impact in mind. We’ve committed to offsetting the carbon emissions of our NFT minting activity. A large part of why we can promise this is because we’ve created tooling that allows us to only mint NFTs when network traffic is low.
Does Enshrine offer alternatives to lazy NFT minting?
At this time, we do not offer any alternatives to lazy NFT minting. We believe the benefits of lazy minting far outweigh the downsides.
After our full launch later this spring, we will evaluate alternate options for NFT minting. We want to give creators flexibility on how and when their NFTs are minted, but we want to make sure that we approach this problem responsibly.