Transaction fees aren’t seen as attractive or inspiring… but that’s all about to change.

Every NFT marketplace collects fees for platform revenue, gas, and creator royalties. Most view this functionality as a bland necessity to help keep the platform running. As we move into the future of Web3, and the NFT space continues to transform, platform fees will become a much more active and nuanced feature for businesses to use creatively. 

NFT marketplaces are not static, but lively ecosystems with room for customization and varying experiences. Fees might not seem like the most obvious feature for deep customization, but NFT projects can gamify them to boost activity and motivate users to spend more time and money. 

Many existing marketplaces try to simplify fees, touting a transaction fee of around 1-2.5% on average, with customizable creator royalties usually up to 10%. These specific fees vary, and some platforms use the opportunity to promote their low fees to users. Beyond this, not much is being done to make fees dynamic for gamified.

I see this as a missed opportunity, especially for NFT projects that own their marketplace. Conditional fees can unlock new opportunities for projects to increase users, engage audiences, and incentivize growth. 

How to Set Web3 Platform Fees

We are still in the early days of this concept, but web3 projects already have options in the area of platform fee customization. This power lives hand-in-hand with ownership of a dedicated platform, something I believe every web3 project should be exploring. Owning your platform makes it easier to take control of your business model, including the customization of fees.

Let’s get into the fun stuff…

Conditional fees can be best understood as a way to gamify your platform activity. Instead of applying a blanket fee to buyers and sellers based on the amount of their transaction, it’s possible to tailor these fees to your community and provide a unique web3 experience. For a better idea, consider these examples…

• Reward Loyalty: Give a 20% discount on fees to users who have been active for more than six months.

• Weekly Promotions: Free Friday!!! Set your platform fees to 0% every Friday for all users.

• Monthly Promotions: NFT of the month! A specific collection gets a reduced fee all month long.

• Add Token Utility: 50% discount for users that hold yours or a partner’s token.

• Incentivize Trading: Apply a degressive fee based on trading volume,  i.e. user X invested $10k and receives a 1% fee reduction. 

• Promote Partners: An exclusive fee for your partner’s collections, bringing their community to you. 

• Reward Referrals: Refer 20 people and get a 1% off fee, refer 100 people and get a 0% fee on the next purchase.

These examples are just a glimpse into what is becoming possible with NFT marketplace customization. Not only can businesses deploy a platform with a customized front end and exclusive NFT assets, but the experience and reward mechanisms can be customized as well. 

Why Conditional NFT Platform Fees

The possibilities should be more clear, but what are the benefits of conditional fees? Incentives created when discounting fees and unique experiences provided to your community can help in three specific ways…

NFT Marketing Strategy

Marketing in the blockchain space is challenging. The audience has yet to go mainstream, users approach projects with a degree of healthy skepticism and fraudulent actors take advantage of projects with a marketing budget. Simply put, there is no clear path to marketing success in Web3. 

Offering dynamic discounts to users on web3 platforms can be a key differentiator. The value proposition presents the chance for a strong marketing campaign that excites new users. Everyone loves fun promotions and being rewarded for their activity, yet most platforms don’t offer this option. Consider the many ways to cut through the noise and stand out by turning your fees into a selling point that acquires users.  

NFT Collection Engagement Strategy

Platform users aren’t created equal. Some users will actively participate and engage, while others will connect their wallet once or twice and never return. Incentives via discounted fees inspire more engagement due to the opportunity to save. Active users will remain active and average users might increase activity knowing they can buy and sell NFTs for less money. 

NFT projects can use fees to encourage specific types of engagement on the platform. Whether you want to promote your partner’s collection or push for lots of volume one day a week, conditional fees make it possible for users to pay less by getting involved. 

Accelerate Web3 Growth

The goal is always growth, but it's a lot easier said than done. Whether operating in web2 or web3, creative tactics are required to achieve platform growth. Gamifying activity is a clever way to incentivize growth, as users share in a fun experience while assisting in the scaling of the platform. The broad appeal of promotions can’t be ignored, especially in web3, where financial interests permeate the hearts and minds of many users. 

Attracting web3 users becomes easier when the financial incentive is clear. As your dedicated community members realize the saving potential of conditional fees, they will likely shout from the rooftops to help grow the platform. You might be “losing” on a little short-term revenue by applying discounts, but this will be outweighed by long-term gains via retention and engagement.

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Platform fees can be much more interesting than many believe. As we build new virtual worlds and web3 adoption increases, there is so much room for innovation. Bringing NFT ideas to life and creating entirely new ecosystems should be fun without the limitations imposed by web2 or IRL mindsets. Conditional platform fees are the perfect example of what can be explored using the power of blockchain to create valuable experiences for users.

If you’re interested in exploring how to deploy engaging new web3 experiences and deepen the value created for your NFT community, just reach out! At Liteflow, we bring the flexibility of building web3 projects according to your needs, while helping you own your revenue model for the internet’s next era.