The Impact of “Lazy Minting” on Seller Performance in NFT Marketplaces—A Transaction Cost Economics Perspective

Abstract

In the burgeoning marketplaces of digital assets, non-fungible tokens (NFTs) revolutionize digital asset ownership and intellectual property (IP) protection, but high minting costs create barriers to marketplace entry and growth. This study examines the impact of “lazy minting,” a new NFT production method introduced by major NFT marketplaces to lower minting costs by deferring blockchain certification until the first sale. In response to the call for further research on emerging technologies in operations management, we explore how this policy affects the net sales performance of existing sellers in the NFT marketplaces. Based on transaction cost economics (TCE) and the literature about different IP protection methods, we distinguish between lazy- and regular-minted NFTs by their differential transaction costs and utilize the staggered difference-in-differences (DID) method to conduct our analysis. We find that lazy minting adoption significantly boosts the net sales performance of existing sellers. This is attributed to their cost-adaptive IP protection behavior. Specifically, they achieve this by minting more NFTs with a larger proportion of style-consistent NFTs through lazy minting, while strategically employing regular minting for style-breaking NFTs, which is contingent upon their reputation. Our study has important theoretical and practical implications for operations management under the emerging technological revolution.