I’d like to begin with some impressive figures. According to research published on NonFungible.com, the total value of NFT transactions in 2020 will exceed $250 million, up 299 percent from the same period last year.
In addition, the total number of active wallets performing NFT transactions grew by 97%. Non-fungible tokens (NFTs) are expected to become the driving force behind the virtual economy in the next decade, according to experts.
The point is that the NFT market is expected to expand, and now is the time to consider how you can take advantage of it. One of the best ways to do this is to create an NFT marketplace. As a result, I’ve put together a comprehensive guide that will answer all of your questions about how to build a successful NFT marketplace. Prepare yourself and let’s get started!
Once Again What exactly are NFT?
Non-fungible tokens are what we refer to when we talk about NFTs. The majority of NFTs are built on Ethereum and adhere to the ERC-721 and ERC-1155 standards. Each NFT is unique and cannot be duplicated, replaced, or split into parts, unlike regular tokens, which are fungible and have the same value. If you lend someone $10, for example, it doesn’t matter if you get the same bill back. Isn’t it just ten dollars? However, the situation changes dramatically when it comes to collectible coins, each of which is unique and has its own value. This one-of-a-kind coin is known as NFT.
NFTs have a few characteristics that set them apart from other tokens:
- Uniqueness. Each NFT token is a one-of-a-kind asset with its own set of metadata.
- Indivisibility. NFT cannot be broken down into smaller amounts.
- Authenticity. Each NFT has a unique owner, whose identity can be easily verified.
- Non-interoperability. One NFT is not the same as another; unlike Bitcoin or Ether, you cannot simply exchange them.
- Non-fungible tokens are ideal for representing rights to digital assets because they have these properties. An image, music, digital artwork, game item, or game character, for example, can all be considered assets.
- As a result, many artists, musicians, and collectors have been able to participate in the online economy by tokenizing their assets. However, marketplaces for selling and buying NFTs are still required. NFT marketplaces could function as an auction platform, allowing both creators and buyers to find and choose the best deals.
What is a non-fungiable marketplace?
Non-fungible tokens, unlike Bitcoin and Ether, cannot be directly exchanged on various crypto exchanges. Dedicated platforms are required to buy and sell NFTs. The NFT marketplace is a decentralized platform for storing and trading non-fungible tokens. On such a platform, lots can be sold at a fixed price or at an auction. The majority of NFT platforms require buyers and sellers to have cryptocurrency wallets in order to complete transactions. NFT marketplaces come in a variety of shapes and sizes. Some are more exclusive, while others aim to allow anyone to create and sell art.
OpenSea, Rarible, and Mintable are some examples. You can turn any of your creations into items and sell them on these marketplaces. Other platforms are more specialized. They concentrate on the sale of specific assets. Valuables, for example, allows you to sell and buy tweets (you may recall that Twitter CEO Jack Dorsey auctioned off his first tweet as an NFT); Looking Glass Factory sells digital holograms, and so on.
Because they have a more clearly defined target audience and solve specific problems, niche marketplaces are gaining popularity. You can also find closed marketplaces, such as Foundation.app, that are only accessible to approved creators. As a result, before creating an NFT marketplace, you should think about platform type.
What is the function of an NFT market?
Smart contracts are used to make NFTs work. Each token has its own set of unique data (metadata) stored in its smart contract, which is immutable and secure thanks to blockchain technology. We’ll need to create a token protocol, usually on the Ethereum network, to build an NFT marketplace.
This is a subset of smart contracts that ensures that certain marketplace features are implemented. Additionally, the marketplace system is integrated with this protocol.
Let’s look at how NFT marketplaces function from the client’s perspective. All NFT auction platforms, for the most part, follow a similar pattern. To begin, a user must first register for a platform and download a digital wallet in order to store NFTs and cryptos.
The platform’s registration process is linked to a cryptocurrency wallet; in other words, you sign up using your wallet. The user can then add items to his collection to display his work. The user can also select which payment tokens to accept for his artwork and, if the platform suggests it, set a secondary sales fee.
The next step is to put items for sale on the market. The user can choose between an auction bid and a fixed price. When a user posts an item for sale, a transaction is created that starts a personal trading smart contract in the user’s wallet. Collection moderation may be required by the platform, after which your NFTs will appear on the list for sale and you will be able to accept bids. Typically, NFT marketplaces charge a percentage of the purchase price. NFT platforms also handle the transfer of items and funds, so the entire process appears to be fairly simple to users.
Where to Begin in the Development of the NFT Market
Now that you understand how NFT marketplaces work and what types of platforms are available, it’s time to get more specific about your project. If you’re wondering how to build an NFT marketplace, I recommend starting with the business side. You must understand who you are building your platform for and what problems it will solve, just as you must with any other software product. You must decide on a set of features and one of several technical implementation options for your concept.
- Features of the NFT marketplace
The NFT marketplace combines the features of a marketplace and an auction platform. Users should be able to create and sell their own collectibles. Additionally, various marketplaces provide additional functionality in order to attract users and enhance their user experience. Begin by making a list of core platform features that will allow users to perform basic tasks:
- Storefront
As a marketplace, the NFT auction platform should have a storefront. Provide users with all of the information they need about an item, including a preview, bids, owners, and price history. For example, OpenSea displays chain information for checking the smart contract so that a buyer can be sure that the purchased NFT is genuine.
- Looking for something
To make it easier for users to find collectibles they’re interested in, your platform should support category management and tagging, just like any other marketplace. Add a search bar to the site, as well as categories. Art, Domain Names, Virtual Worlds, Trading Cards, Collectibles, Sports, and Utility, for example, are all divided into categories by OpenSea. You have a choice.
- Filters
Filters also make it easier to navigate a website, especially if it contains a large number of collectibles. Allow users to browse items by category, payment method, collection, and listing status (for example, “new,” “has offers,” and so on). This will cut the time between NFT selection and purchase in half.
- Making a listing
The submission of NFTs and the creation of the collection should be quick. Consider the flow, and you’ll probably need something like OpenSea’s Collecting Manager to keep track of your collections and items. A user should be able to upload a file and fill in basic token properties such as name, description, and tags on the collectible creation page. I recommend that you sign up for several marketplaces to see which flow of creating NFT and selling it appeals to you the most, and which stages you would excel at.
- The status of the listing
The status of a listing can also help users choose NFTs to buy. They can find the best options faster and easier by searching, sorting, and filtering. Also, statuses make it easier for sellers to navigate, particularly if you want to implement a collectible verification process. This way, you can let sellers know where their items are in the verification process.
- Purchasing and Auctioning
One of the most important aspects of the project is the creation of an auction mechanism for your platform. You must provide an easy-to-use and efficient NFT purchasing system to bidders. The bid expiration date should be included in the form to give users more control over their bids. The auction watchlist also allows you to see information about the current status of bids.
- Wallet
To send, receive, and store cryptocurrencies and non-fungible tokens, your users will need wallets. The simplest way to accomplish this is to give a user a connected wallet that he already uses. Rarible, for example, allows users to connect one of the following wallets: MyEtherWallet, Coinbase Wallet, Formatic, or WalletConnect. OpenSea provides a number of additional features. As a result, we’ll need to compile a list of wallets that the platform must support and ensure their integration.
- Ratings
Ratings are an excellent way to assist new users in selecting NFTs. They also serve as a reward for the best top sellers, demonstrating their trustworthiness. As a result, you can use this as a bonus feature.
In fact, the features of the NFT marketplace are not limited to those listed. Each platform comes with its own set of features. They hope to improve communication with users and increase user engagement in this way. Rely on your own thoughts. You could use a push notification system to notify users about bid changes, new collectibles, or the status of their listings, for example. Create a forum on the platform to build a community. Some marketplaces have blogs of their own. Create the ideal NFT marketplace in your mind, and it will serve as the foundation for your project.
Why are clones in demand for NFT Marketplace applications similar to OpenSea?
Consider how the eBay app operates; this is exactly how OpenSea operates. It is most likely one of the very first and largest NFT markets. A user can purchase and sell cryptographic goods and non-fungible tokens in the same way they would on an eCommerce platform.
OpenSea, the NFT marketplace platform, launched in December 2017. Additionally, the founders of OpenSea, Alex Atallah and Devin Finzer are Stanford, Palantir, and Google graduates, as are a large number of other successful entrepreneurs. Opensea is based in Greater New York and utilizes Blockchain technology.
The organization’s popularity soared beyond all expectations. Additionally, it raised $23 million ($27.2 million total) in a recent round announced on March 18th’21.
According to CrunchBase data, OpenSea makes use of 33 technologies. Blockchain technology continues to be fundamental.
All of these statistics and analytics demonstrate that NFT development, such as OpenSea, will eventually be the most desired.
NFT’s market capitalization is rapidly increasing and has already tenfold between 2018 and 2020.
Additionally, global NFT revenue was $40.96 million in 2018 and $141.56 million in 2019.
It is worth noting that the domain of NFTs has prevailed since 2012. Jack Dorsey is the first well-known NFT, having been auctioned for $3 million.
Everyday: The First 5,000 Days, an NFT asset, was auctioned off for $69 million in 2021.
NFTs are primarily used to demonstrate ownership of a file format. Typically, this includes JPEGs, MP3s, and GIFs.
In general, establishing an NFT Marketplace ensures a very healthy revenue stream in this highly competitive global environment.
Reaching the conclusion
Non-fungible tokens (NFTs) continue to grow in terms of trading volume within the blockchain industry. There are numerous promising marketplaces available, but the technology required to create and implement a completely interoperable marketplace capable of facilitating frictionless cross-chain NFT transactions between various blockchains is currently unavailable.