39 The Metaverse Overview : Vision, Technology, and Tactics | Industry NFT business and circulation models Participants in NFT circulation are either upstream-creators, midstream-platforms, or downstream-bidders. Figure34: NFT value distribution Figure33: NFT circulation Source: Public information, Deloitte analysis Source: Public information, Deloitte analysis NFTs generate value at every link, including gas fees charged by blockchains, sales and trading fees charged by platforms, and copyright payments to content creators. Typically, upstream creators pay gas fees to a blockchain when creating an NFT. They then pay gas fees to the blockchain and commission to a platform when the NFT is published. Creators also collect transaction fees from buyers, and buyers pay gas and platform fees. If the NFT is traded again, the creator receives a copyright fee and the platform charges a resale service fee. The seller collects the NFT payment and pays resale service, royalty income, and gas fees. The buyer pays for the NFT and pays gas fees too. NFT Platforms Creators Mainly Individual Creators: 90% Individuals; 10% Teams Deals / Bidders • Global: OpenSea, SuperRare, Nifty Gateway, Rarible • China: Ali Auction, AntChain, Tencent Magic Core Young People: 58% Millennials, 33% Gen X Upstream Midstream Downstream Gas: a Gas fee is needed for recording creation and transaction information on the blockchain Sales/Resale Services Fee: NFT transactions through the platform need to pay the platform certain service fees Sales Revenue, Royalties: creator’s income comes from the sales income in the primary market and the circulation royalties income in the secondary market Value Distribution Value Attribution Blockch ain Creation Platform Creator 1 2 3 NFT Market Value Distribution Creation Issue & sell Transfer Infrastructure layer Gas fee Gas fee Gas fee creation layer (creator) not in the chain: 0 within the chain: Gas fee without platform: sales revenue-Gas fee with platform: first sales revenue-Gas fee Royalties creation layer (primary transfer platform) first sales revenue creation layer (secondary transfer platform) resale service fee collector (seller) resale revenue-resale service fee-royalties-Gas fee collector (buyer) issue revenue-Gas fee resale revenue-Gas fee Established Time Entry Forms of Creators First Sales Service Fee Resale Service Fee Royalties of Creators OpenSea 2017 Not Set 2.5% 2.5% 10% SuperRare 2018 Application 15% 3% 10% Nifty Gateway 2018 Targeted Invitation and Application - 5%+0.3USD Self Design Rarible 2019 Application 2.5% (in the price) 2.5% (out of the price) Up to 50% Examples of Main NFT Market