Onchain collecting: What is an NFT trading card?

From pro athletes to Pokémon, trading cards have long been a coveted category in the global collectibles market, with rare editions selling for millions of dollars at auctions. Now, collectibles have entered a new era as one-of-one virtual versions on cryptocurrency blockchains known as "non-fungible tokens" (NFTs).

Iconic NFT trading cards like Lionel Messi’s $1 million digital collectible or a $471,000 tokenized Topps card featuring Mickey Mantle showcase the growing demand for these digital assets. But what is an NFT trading card, how do they work, and why are they gaining traction among collectors?

What is an NFT trading card?

NFT trading cards are digital assets built on blockchain technology, designed to replicate the qualities of traditional trading cards. Each NFT has a unique, non-duplicable address or identifier on its respective blockchain, setting it apart from fungible cryptocurrencies. While NFTs exist on peer-to-peer (P2P) blockchains like other crypto assets, they lack a 1:1 market rate on exchanges, functioning more like collectibles because of their inherent uniqueness.  

Within the NFT space, a subset of assets mimics the characteristics of trading cards. These NFT trading cards often feature imagery tied to gaming, sports, or fine art and may offer added functionality, such as integration into video games, access to real-world events, or exclusive VIP perks. Ownership of these digital collectibles is easily authenticated through their unique, transparent, and tamper-proof blockchain addresses, ensuring secure and verifiable transactions.

How do NFT trading cards work?

NFT trading cards are "tokenized" assets created on existing blockchains like Ethereum (ETH) or Solana (SOL). Unlike fungible cryptocurrencies, NFTs adhere to specific coding standards such as ERC-721, enabling unique identification and functionality. These assets rely on smart contracts – automated programs that manage their issuance and transfer – removing the need for intermediaries.  

Each NFT trading card includes a unique set of metadata, which may feature elements like images, audio files, or video clips. This metadata distinguishes each NFT as a one-of-a-kind asset on the blockchain. Ownership of an NFT trading card is easily verifiable through the blockchain, as users can check their wallet address and view their NFTs directly within their account.

NFT vs. SFT: What's the difference? 

While most crypto trading cards fall into the NFT camp, some creators use a different type of cryptocurrency called semi-fungible tokens (SFTs) to issue virtual cards. The primary distinction between NFTs and SFTs lies in their fungibility. While NFTs are always unique, one-of-a-kind digital assets, SFTs can start as fungible cryptocurrencies and later become non-fungible when a specific state change occurs on the blockchain.

For example, a band might issue virtual concert tickets as SFTs. Initially, these tokens are interchangeable, allowing any holder to gain entry to the event. After the ticket has been used, the SFT transitions into a unique NFT trading card commemorating the concert. This feature makes SFTs a versatile option for creators looking to combine utility with collectibility.

NFT trading cards vs. traditional collectibles

The most obvious distinction between NFT trading cards and traditional collectibles is that NFTs are digital, while classic cards are physical. While NFTs may lack the tactile satisfaction of holding a physical card, they offer unique advantages that traditional collectibles cannot:

• Tamper-proof: NFTs are built immutable blockchains, making them impossible to counterfeit. They’re also immune to physical damage – such as wear, burns, or tears – that could depreciate the value of traditional cards.
• Additional features: NFT trading cards often include features embedded in their metadata, such as access to exclusive events, gated online communities, or integration with video games. These functionalities add multidimensional value beyond their status as collectibles.

That said, NFT and traditional trading cards share a reliance on scarcity and market demand to determine their value, making them equally appealing to collectors in their respective formats.

How to buy and sell an NFT trading card

Unlike traditional cryptocurrencies, NFTs don’t have a 1:1 market price, so they aren’t listed on exchanges like Coinbase or Kraken. Instead, NFT trading cards are bought and sold on specialized platforms called "NFT marketplaces," which cater to their unique liquidity and pricing structures. 

NFT marketplaces function much like auction sites such as eBay, allowing users to bid, buy, or sell virtual assets. Sellers can list NFTs at a fixed price, open them for bidding, or accept direct offers. These platforms simplify trading for anyone with a crypto wallet, providing collectors and traders a seamless way to engage with the expanding NFT ecosystem.

Here’s a closer look at the steps to buy and sell an NFT trading card:

• Set up a compatible wallet: To participate in NFT trading, you need a self-custodial crypto wallet that's compatible with the blockchain you select. Popular choices include MetaMask or Coinbase Wallet for Ethereum and Phantom for Solana.
• Fund your wallet: Once set up, fund your wallet by transferring cryptocurrency from an exchange or purchasing crypto directly through the wallet app.
• Choose an NFT marketplace: Select an NFT platform that lists the trading card you’re interested in, such as OpenSea for Ethereum-based assets or Magic Eden for Solana.
• Buy or bid: Browse the marketplace for the NFT trading card you want. Depending on the listing, you can either place a bid, buy the NFT outright, or make a counteroffer to negotiate the price.
• Complete the transaction: If your bid or purchase is accepted, the NFT will transfer to your crypto wallet, and ownership will be recorded on the blockchain.
• List for sale: To sell an NFT trading card, connect your wallet to a marketplace and post your card for sale. Set a fixed price, enable bidding, or allow offers to attract buyers.

Types of NFT cards

NFT trading cards are highly customizable and offer a wide range of applications in the web3 space. These virtual trading cards sometimes play a central role in building online communities or creating unique digital experiences.

Sporting NFT trading cards 

Professional sports organizations like the NBA, NFL, and MLB are using NFTs to offer fans ways to celebrate their favorite teams or athletes with NFTs. Platforms like Dapper Labs' NBA Top Shot lead the pack, while traditional brands like Topps have also embraced the decentralized format.

These NFT trading cards go beyond static images, often featuring video highlights of iconic moments or integration with fantasy sports games. For example, Sorare allows users to build fantasy football teams with NFT cards to compete for prizes. Major sporting events like the Daytona 500 and Super Bowl also reward attendees with virtual commemorative NFTs.  

Gaming NFT trading cards 

Unlike traditional video games, web3 games grant players complete ownership over their digital items thanks to the P2P nature of blockchain. NFT trading cards often serve as integral components in gameplay or as rewards for participation.

For example, the Ethereum-based game Gods Unchained uses mythological NFT cards in strategic battles where players compete for crypto prizes. Similarly, the Pokémon-inspired game Axie Infinity also uses NFTs to represent avatars of animated creatures that gamers use in quests and competitions. These gaming NFTs not only enhance the player experience but also create monetization opportunities within the web3 ecosystem. 

Membership NFT trading cards

Membership NFT trading cards combine digital collectibility and exclusive perks like VIP access to events or gated communities. A prominent example is the VeeFriends NFT collection by entrepreneur Gary Vaynerchuk, where each NFT features custom artwork and doubles as a ticket to the annual VeeCon convention. Depending on their tier, VeeFriends NFTs may also unlock additional benefits. Most membership NFT collections aim to foster fan engagement while offering tangible value to investors. 

How to make NFT trading cards 

Creating NFT trading cards doesn’t require celebrity status or professional credentials – anyone with the right tools and a clear vision can get started. Here’s how:

Define theme, audience, and attributes

Start by outlining the concept for your NFT trading card collection. Identify your target audience, key features, and the level of scarcity for the collection. Establishing a strong theme and purpose will make your NFTs more appealing and marketable.  

Create artwork for the cards

Design eye-catching images using tools like Adobe Photoshop or Canva. Artwork should be consistent across all cards and include details like text boxes or icons for stats, if applicable. Once finalized, save the designs in supported file formats such as JPEG, PNG, or GIF.  

Choose a blockchain and marketplace

Research different blockchains like Ethereum, Solana, or Polygon (POL) to decide where to mint your NFTs. Compare factors such as transaction speed, gas fees, and audience preference. After selecting a blockchain, explore NFT marketplaces like OpenSea or Magic Eden to understand their requirements for listing trading card NFTs.  

Mint your NFT cards

Link a compatible crypto wallet, such as MetaMask or Phantom, to your chosen NFT marketplace. Use the "Mint" or "Create" option to upload your artwork and add metadata, including descriptions, attributes, and categories. Once everything is finalized, pay the gas fees, and your NFT trading card will receive a unique blockchain ID, making it ready for sale or distribution.

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Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.