NFT Marketplace: What is it?
The NFT marketplaces are digital places where collectors and artists can purchase, sell, and create unique NFT tokens. NFT, or non-fungible tokens, demonstrate ownership of unique and intangible items. They are a great way to both sell one’s artwork, illustrations, memes, characters, and namings and collect unique items.
As a comparison, let’s examine NFTs in light of other asset types:
The nature of NFTs is both non-tangible (they don’t exist as physical objects) and non-fungible (they are unique). Each NFT exists exclusively digitally, and there is no way for you to touch it – only view it (or its file) on your screen. Still, it is like owning a car, a house, or a phone – only in a digital world.
And your NFT marketplace will be a place where people can claim their ownership of an NFT token.
Top NFT Marketplace Features
Building an NFT marketplace is generally similar to the creation of an E-Commerce shop – you need to let your customers locate a relevant product, see the price, add it to the cart or wishlist, and then pay for it. Sellers need to be able to present their NFTs, answer buyer questions, receive payment, etc.
The following is an example of one of the biggest NFT marketplaces – compare its functionality with, for instance, some sportswear stores. In the same way, you can search, select, and purchase the NFT token. On top of that, you can also CREATE and sell your own NFT collections – something that is not possible to do in e-commerce.
In order to implement a fully functional NFT marketplace, you will need the following features:
- Shop window: Displaying NFT tickers on a buyer’s page
- Search engine: A feature that allows users to find relevant NFT tokens for purchase
- Sign up & Login: Creating accounts for users to make their experience better and allowing them to save all the information (e.g., with a wishlist) once they return to the marketplace.
- Advertisements: Providing you and/or your sellers with the ability to promote their NFT tokens based on subscribed user preferences.
- A crypto wallet: Allowing fast payments for NFT tokens with cryptocurrency
- Trading history: Enabling users to keep track of their purchases
- Reviews and ratings: Allowing users to provide their feedback about NFT tokens and sellers.
- Notifications: Informing customers and sellers about the change of status
- Support: Responding to the questions and resolving the issues of users
However, there are still some peculiarities of how NFT marketplaces work. For example, signing up may include authorization via digital wallet + entering the wallet password instead of the usual phone number/email authorization.
NFT purchases can be conducted for a fixed price or in an auction, and there is also the possibility of negotiating with a seller for a more enticing price.
The process of selling an NFT is more complex than that of buying one. Sellers should first create and upload the asset, wait for platform verification, accept a bid or negotiate a price, and then wait for the marketplace to provide the transfer.
Markets also offer the option of minting (or creating) an NFT. By mining an NFT, we mean converting digital files (pictures, sounds, texts) into crypto collections or digital assets stored on the blockchain.
In spite of the fact that these features are not unique, they have peculiarities that require knowledgeable NFT developers who understand the NFT market and have extensive experience with blockchain.
Custom Marketplace vs Ready-Made Solution
The features mentioned above can be found in many ready-made NFT marketplaces. Thus, the NFT sellers and buyers have the option of simply using the available functionality for a small fee or via paying for transactions.
The pros of using ready-made solutions for selling NFTs are:
- no need to spend effort on development and writing code
- faster time-to-market
- lowered costs in the short term (so if you want to sell one-two NFT – ready-made solutions are for you)
- easily replaceable with another marketplace
The cons of using ready-made solutions are:
- the app may not fit your specific needs
- high fees
- lack of flexibility
- lack of control
- limited scalability
For only selling NFTs as your only source of income, ready-made solutions would be the best option – you wouldn’t have to worry about designing the architecture, coding, or hiring all the technical staff. Create NFTs on some popular marketplace – and then sell them.
If you want to extend your business with NFT, sell more significant amounts of tokens or even make money from other users selling their NFTs – then it’s better to develop a custom solution.
Pros of developing a custom marketplace:
- an app will fit your most specific needs
- you will make money from fees and transaction costs
- high scalability
- long-term profitability
- control over the development process
- ownership of the source code
Cons of developing a custom marketplace:
- required investment costs in the beginning
- a need for constant maintenance
- slower time-to-market
- required additional time- and effort input from both you (requirements refinement) and your tech team (developing, coding, and designing)
NFT Development Tech Stack
The NFT development process requires a typical tech stack, as with most software development projects, and plus blockchain technology. Typically, you will need to choose the following types of technologies:
- Cloud hosting platforms – to deliver websites and applications through the cloud in order to provide better accessibility and improved performance. Examples: AWS, Oracle, Microsoft Azure, Google Cloud, etc.
- Database management systems – to define, manipulate, and manage data in a database in order to accelerate the retrieval and update of the info on the website or app. Examples: MongoDB, MySQL, and PostgreSQL, etc.
- Backend tech – programming languages and frameworks that allow your marketplace to operate and conduct user actions. Examples: PHP, Kotlin, Python, Solidity, Swift, etc.
- Blockchain tech – used to enable purchase and creation of NFTs. Examples: Ethereum, Binance Smart Contracts, Flow, etc.
Steps to Building an NFT Marketplace
Creating an NFT marketplace involves the following steps:
- Choosing a niche for your NFT marketplace development project is the first step. You can, for example, focus only on selling art, memes, characters, or namings. As soon as you have a general idea, you will be able to figure out the requirements, develop the design, create the strategy, and estimate the timeframe required to generate the marketplace.
For example, here’s a niche devoted to characters that we created for one of our clients:
- Designing UI/UX is essential to delivering what your business represents in the world of NFT. Create a simple interface and enhance the usability of a platform – users should feel confident and not confused when they work with your platform. Choose your design based on who you are targeting – which group of people do you want to involve? Artists, bloggers, gamers, or just the general audience?
- Development: now it’s time to get down to coding. Provide your development team with detailed functional and non-functional requirements, design prototype, product roadmap – and let’s get started! Do not forget to schedule weekly meetings to check if progress is being made as planned.
- Developing smart contacts: NFT marketplace uses Blockchain technology for data authentication as a decentralized platform. Smart contracts provide a secure way of making transactions.
- Testing and deploying: Your team must ensure the application works correctly and without glitches – so thorough testing is required. Post-launch assistance is also essential to mitigate bugs and ensure quality.
What Makes NFTs So Popular?
NFTs are an intriguing concept and relate well to the Internet society we live in today. And there are a few reasons for their popularity:
- NFTs are a symbol of status: the rarer and more unique the token, the higher its value. With a higher price tag, the more value collecting them holds.
- NFTs create a sense of community: People trade and retrade NFT tokens in specific communities and groups.
- NFT lets artists, designers, and musicians sell their work and earn money for their creativity
- The NFT enables supporting content creators
These are all reasons why NFTs are so appealing to the Internet society – and you can take advantage of them by setting up your own NFT marketplace!