Lazy minting has become an increasingly popular technique in the NFT space over the past year. But as its usage grows, so do questions around who ends up paying for the computational resources required to support this minting model. In this article, we’ll take a deep dive into lazy minting, analyzing its pros, cons, and costs.
What is Lazy Minting?
Lazy minting, also sometimes referred to as “gasless minting,” allows NFT creators to mint their NFT metadata without having to pay any gas fees upfront.
With a traditional NFT mint, creators have to pay gas fees at the time of minting to write the token data on-chain. This can be expensive, with average minting costs right now hovering between $50-$100 per NFT.
With lazy minting, instead of paying those gas fees upfront, creators can simply generate and upload the metadata for their NFTs off-chain. This metadata contains all the key information about the NFTs – attributes, properties, images etc.
The NFTs are not actually minted on-chain at this point. But the metadata does allow them to be seen on marketplaces and enables trading activity. Tokens only get minted on-chain when a buyer purchases the NFT and has to pay the gas fee for the mint transaction.
So with lazy minting:
– Creators avoid upfront gas fees
– Buyers take on the gas fees when they purchase
– NFTs can still be viewed and transacted before minting
This makes it substantially cheaper and easier for creators to launch NFT collections. But as we’ll explore, there are downsides.
The Upsides
Let’s first examine some of the benefits that lazy minting introduces:
Lower Barrier to Entry
Lazy minting dramatically reduces the upfront costs for NFT creators. For creators who lack capital, paying $50-$100 per token to mint can be prohibitive. Lazy minting makes launching a collection possible even with limited funds.
Easier Testing of Collections
With lazy minting, creators can also test out and validate different collection ideas without having to pay for on-chain mints. This allows for faster iteration and prototyping.
Enables New Commercial Models
Lazy minting opens up different commercial models around NFTs. For example, platforms like Lazy.com cover initial gas fees for creators and then take a revenue share on secondary sales. Traditional minting doesn’t allow splits like this.
Decentralization of Minting
Since anyone can lazy mint without an upfront cost, it makes NFT creation more decentralized and accessible. Platforms no longer have to pick and choose who to support with gas.
The Downsides
At the same time, several drawbacks exist with lazy minting:
Scams
The low barrier to entry also enables scam artists and bad actors to easily push out collections without serious intention or capabilities. Carpet pulls and cash grabs are much easier.
Metadata Centralization
Centralized servers have to store all the metadata for lazily minted NFTs. This creates single points of failure. If those databases go down, the NFTs have no visible record.
No On-chain Records
Until minted on-chain, lazily minted NFTs also have no transaction histories or ability to verify authenticity. This can enable things like fake volume and wash trading.
Delayed Gas Fees
Gas fees simply get pushed to the buyer rather than being paid upfront. Buyers have no clarity on how high those gas fees will be by the time they purchase.
Who Pays For Gas?
This brings us to the key question – who ends up footing the bill for lazy minting gas fees?
Right now, it is generally the NFT buyers who cover the gas fees when they trigger the on-chain minting at time of purchase. In most cases, the full gas fee for the minting gets deducted from the payment amount they submit.
So if a buyer purchases a lazily minted NFT for 1 ETH and the gas fee is 0.05 ETH, they would receive the NFT and the creator would receive 0.95 ETH.
In some cases, creators subsidize a portion of the gas fees using the revenue they’ve earned. But in general, it is the buyer left paying the full cost of the minting.
The Problem
This creates a poor buyer experience in several ways:
Lack of Fee Visibility: Buyers have no clear way to estimate the gas fees they’ll owe until they actually purchase. This uncertainty makes pricing difficult.
Volatile Prices: Since gas prices fluctuate rapidly, buyers may pay 2X or 3X more depending on timing. They have no control over this.
No Max Cap Protection: Some NFTs have maximum purchase caps to limit gas. But lazy minting generally doesn’t account for this.
Reward for Waiting?: Buyers are incentivized to wait as long as possible to purchase in hopes of lower gas fees. This makes no sense.
So in summary, buyers take on all the risk of unknown and fluctuating gas fees. This leads to a poor experience.
Potential Solutions
There are a few potential solutions that could help alleviate these buyer challenges:
Creator Subsidies
NFT creators could subsidize a portion of the gas fees for buyers using their revenues. For example, they could cover 50% of fees. This offsets some of the burden.
Max Purchase Caps
Creators could implement smart contract maximums on how much gas a buyer will owe. This limits the risk of surging gas prices.
Tiered Pricing
NFTs could be sold at tiered prices depending on current gas rates. This lets buyers choose price points based on market conditions.
Off-chain Transactions
Hybrid on-chain and off-chain transactions could allow buyers to lock in a maximum gas fee before purchase. The NFT can mint on-chain later when gas prices drop below that level.
Gasless Marketplaces
Platforms like Magic Eden have introduced gasless marketplaces where they subsidize all gas costs. This insulates buyers from any volatility.
The Future of Lazy Minting
Lazy minting makes NFT creation far more accessible. But as it stands, buyers are left shouldering the risks and unseen costs of gas.
As the market evolves, we are likely to see new emerging standards around seller transparency, maximum cap protections, and gas subsidies.
Platforms that solve the lopsided gas fee equation will likely gain an edge with both creators and customers. There is a massive opportunity to make lazy minting efficient and equitable for all parties involved.
Those who lean into these solutions will help lazy minting achieve its potential as an on-ramp for the next generation of NFT creators and owners.
Conclusion
Lazy minting opens up NFT creation by delaying gas costs to the time of purchase. This benefits creators. But in many cases, it sticks buyers with highly volatile, unpredictable fee burdens.
Better product designs, subsidies, and transaction standards are needed to balance out these tradeoffs. Done right, lazy minting can lower barriers while still ensuring a fair deal for all. The solutions exist – it’s just a matter of implementation.