How NFTs Work (Minting & Marketplaces)

What you'll learn

• What Minting Actually Means
• The Role of Smart Contracts
• The Marketplace Landscape
• The Royalty Wars (2022-2026)
• A Concrete Walkthrough: Buying Your First NFT
• A Cautionary Tale: The Otherdeed Mint
• Creating Your Own NFT — Realistically

Key terms

Minting

The process of creating a new NFT on a blockchain by calling a function on a smart contract that assigns a fresh token ID to a wallet. Always requires a gas fee.

Gas fee

The cost paid to validators for processing a transaction. Determined by the transaction's complexity and current network congestion. Failed transactions still cost gas.

OpenZeppelin

A widely used library of audited, battle-tested smart contract implementations for ERC-20, ERC-721, ERC-1155, access control, and security. Most legitimate projects build on its reference contracts.

ERC-2981

The Ethereum standard for declaring NFT royalty percentages and recipients. Only declares the royalty — enforcement happens at the marketplace or transfer-hook level.

Operator Filter Registry

OpenSea's on-chain blocklist of marketplaces that did not enforce royalties, launched November 2022 and abandoned August 17, 2023 (final for legacy collections February 29, 2024).

Royalty

A percentage of each secondary sale paid to the original creator, declared via ERC-2981 or custom contract logic. Marketplace enforcement collapsed during 2022-2024; contract-level enforcement now honors only ~60-70% of trades.

Lazy minting

A flow where the NFT is signed off-chain and only actually committed to the blockchain when someone buys it. Lets creators list inventory without paying upfront gas.

Floor price

The lowest price at which any NFT in a particular collection is currently listed for sale. The most-watched metric for tracking collection health, though it is easy to manipulate with low-volume listings.

Dutch auction

A mint mechanism where the price starts high and falls over time until buyers commit. Often used to prevent gas wars and find a clearing price without front-loading FOMO.

Allowlist (or whitelist)

A pre-approved list of wallets that can mint at a guaranteed price during a presale phase. Typically used to reward existing community members and reduce mint-time gas competition.

EIP-4844 / Dencun

The Ethereum upgrade activated March 13, 2024, that introduced blob transactions and reduced Layer 2 data costs roughly 10x. Made L2 NFT minting dramatically cheaper than L1.