Understanding Transaction Fees and Costs
Last updated August 6, 2024
When purchasing, selling, or trading NFTs on platforms like Candy Digital, it's essential to understand the various fees and costs involved. These fees help maintain and support the blockchain network and ensure secure transactions.
Transaction Fees & Costs Explained
- Gas Fees: Gas fees are the fees paid to the miners on the blockchain network to process and verify transactions. Gas fees are calculated based on the complexity of the transaction and the current network activity. Higher network activity can result in higher gas fees.
- Platform Fees: Candy Digital or other NFT marketplaces may charge a platform fee on top of the NFT price. These fees help cover the costs of running the platform, maintaining liquidity, and facilitating transactions.
- Royalty Fees: Some NFT creators or artists may include a royalty fee on the resale of their NFTs. This fee is usually a percentage of the sale price and goes back to the original creator, ensuring they continue to benefit from their work.
- Listing Fees: Some platforms may charge a fee for listing an NFT for sale, a common practice for secondary marketplaces.
Factors Influencing Fees
- Blockchain Network: The specific blockchain network used for the NFTs (e.g., Ethereum, Flow) influences gas fees based on network congestion and activity.
- NFT Collection: Individual collections may have different royalty fee structures that are set by the creator.
- Marketplace: The platform you're using may have its own fees and structures that are outlined in their terms of service.
Tips for Managing Fees
- Check Fees During Purchase: Before completing a purchase, always carefully review the breakdown of fees to understand the total cost.
- Time Your Purchases: Gas fees can fluctuate based on network activity. Consider buying NFTs during periods of lower network congestion to potentially save on gas fees.
- Compare Marketplaces: If you're looking to sell an NFT, shop around and compare the fees charged by different marketplaces.
By understanding the different types of fees and costs associated with NFT transactions, you can make informed decisions and manage your investments effectively.
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