How NFTs Work (Minting & Marketplaces)

A practical look at how NFTs are actually created and traded — minting, smart contracts, OpenSea vs Blur vs Magic Eden, gas fees, royalties, and the changes that have reshaped the market through 2026.

17 min · intermediate · part of NFTs & Digital Collectibles

What Minting Actually Means

**Minting** is the process of creating a new NFT on a blockchain. The word comes from the traditional concept of minting coins — taking raw metal and stamping it into circulating currency. In the NFT world, minting takes a digital file (or pure on-chain code) and registers it as a unique token inside a smart contract on a public blockchain. Mechanically, minting is a function call on a smart contract. When a user clicks "Mint" on a project's website, their wallet signs a transaction that calls something like `mint()`, `mintPublic()`, or `safeMint()` on the project's contract. The contract verifies the caller is allowed to mint (e.g. that the public sale is open, that they paid the mint price, that they have not already minted past the per-wallet limit), assigns the next available token ID, records the caller's wallet as the new owner, and emits a `Transfer` event from the zero address — which is how block explorers and marketplaces detect that a new NFT has come into existence. Minting is **not free**. Every mint requires a **gas fee** to compensate validators for executing the contract code and storing the new state. On Ethereum mainnet, a single ERC-721 mint historically cost anywhere from $5 to $300 in gas, depending on network congestion. On Layer 2s like Base, Arbitrum, or Optimism, the same mint typically costs cents. On Solana, it costs fractions of a cent. This is why most newer collections launch on L2s or alternative chains rather than Ethereum mainnet. Once minted, the NFT exists permanently on-chain unless the contract supports a `burn()` function and the owner chooses to destroy it. The token can be transferred, listed for sale, used as collateral in DeFi, or fractionalized — but its origin transaction is forever recorded as block N at timestamp T, giving it a permanent birth certificate.

Also in this lesson

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.

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Educational only — not financial advice.