NFT marketplace development has been booming lately due to the increasing value of digital assets. Read on if you want to find out how to succeed when you are an NFT marketplace player with your own technology. Expert opinion has been provided by DevteamRadar and 4IRE, the leading NFT marketplace development provider.
A Comprehensive Guide on How to Build an NFT Marketplace Platform
If you are keeping up with the recent trends in the blockchain industry, you have probably heard about non-fungible tokens, more commonly referred to as NFTs. We bet you wonder why people pay dozens of millions for NFTs and why they are so popular. For example, the founder of Twitter has recently sold a tweet for almost $3 million, while a short video of Beeple was bought for $6.6 million, and both of them used NFTs.
You are not alone if you want to know how to make millions of dollars by selling digital assets. The popularity of NFT marketplaces has been growing exponentially, meaning that it is the best time for NFT marketplace development. This article will inform you about the ins and outs of this profitable business and make you a bit more knowledgeable about NFTs in general.
What Are NFTs and Where Are They Applied?
Simply speaking, NFTs are any digital items such as music pieces, art, drawings, text messages, etc., which have value for some users. NFTs are often confused with cryptocurrencies. These digital assets are similar in many ways, with the main exception being that NFTs are non-fungible. Fungibility means that they are unique and cannot be replaced with something else at parity. Unlike bitcoin used in decentralized finance development, trading NFTs means that you’ll not get the same thing. Other notable features of NFTs include the following:
- Originality — each NFT has its metadata and is unique.
- Authenticity — NFTs are always owned by someone, and this ownership can be verified. Digital ownership is one of the main reasons explaining the popularity of NFTs.
- Integrity — NFTs cannot be split into smaller parts and sold separately.
It may be challenging to understand the fuss surrounding NFTs, but they can have real value for some people despite their elusive nature. For artists, they represent an opportunity to monetize their art and access a wider audience. For buyers, NFTs can be an attractive investment, especially if artworks are involved. They can also help financially support favorite artists, sports teams, etc., or simply serve for entertainment (e.g., in case of gaming or the use of unique avatars on social media).
Where Can I Use NFTs?
The unique features of NFTs have been widely recognized, making them an attractive solution for various industries and business endeavors. The diverse application of NFTs may be confusing, so we created a list of the most common uses of non-fungible assets:
- Gaming. The fact that NFTs are unique makes them a desirable choice for blockchain-based video games such as CryptoKitties. Users can purchase NFTs in the form of different items, including characters, virtual plots, guns, etc.
- Textual data can also be transformed into NFTs. Users willing to become owners of some textual content they think is valuable can purchase it in the form of NFTs. So far, Tweets have been the most vivid application of NFTs of this kind.
- Art. Digital artwork is one of the most promising uses of NFTs. For instance, Banksy has recently sold his piece of digital art in the form of NFT for $380,000.
- Sport is another area taking advantage of digital collectibles. Trading cards, commemorative tickets, merchandise, video clips, and other valuable assets have been turned into NFTs to be sold to fanatics.
NFT Marketplace: Definition, Functions, and Components
If there are NFTs to be created and sold, there should be markets where people can select and purchase them. An NFT marketplace is a decentralized platform serving as a virtual shopping center where NFTs are auctioned or sold at fixed prices. An NFT marketplace acts like a traditional online shop, as it requires users to create an account and select the payment method. However, a significant difference worth mentioning is that users should have a crypto wallet to sell and purchase NFTs.
Here are the main features of NFT marketplaces to keep in mind:
- The incorporation of blockchain technology and smart contract, which allows for high security, transparency, and reliability of all digital transactions. Each token has unique metadata recorded in a smart contract, which remains immutable and secure due to the blockchain technology. Some platforms use well-established blockchain platforms such as Ethereum or Cords, while others use more customized options (e.g., NBA Top Shot uses the Flow blockchain).
- The use of minting as a process by which users tokenize digital assets and create NFTs.
- Blockchain wallet. Since NFTs are traded, the marketplace requires users to have a wallet that allows using cryptocurrency to purchase NFTs.
- Catalog with digital assets is another essential component of an NFT market. It contains all available NFTs, which are usually compiled systematically to enable easier search. A good catalog also includes listings, which are detailed descriptions of digital assets.
Examples of NFT Marketplaces
There are currently many NFT marketplaces, both universal and niche. Universal ones such as Rarible, OpenSea, and Mintable sell any kind of digital assets, while niche ones such as Glass Factory provide access to a particular type of assets. Let’s discuss some of the most widely used marketplaces to keep track of competitors in this booming market.
- OpenSea. This largest marketplace provides access to a wide variety of assets, from domain names to trading cards. This marketplace also contains detailed information about NFTs’ supply, price, and other data allowing users to make informed purchasing decisions.
- Rarible also offers a wide range of digital items, such as game cards, music pieces, art, domain names, etc. This community-owned platform focuses on establishing a secure environment for NFT trading.
- Mintable enables users to create and sell NFTs. It has already attracted the attention of prominent artists and athletes, as well as major investors, allowing its owners to set ambitious long-term goals for development.
- Nifty Gateway focuses on selling digital art in the form of NFTs. Popular NFT artists such as Beeple, Grimes, and others have already taken advantage of the platform to monetize their art.
- Looking Glass Factory stands out from the rest of the marketplaces due to its focus on digital holograms.
How to Create an NFT Marketplace: A Comprehensive Guide
If you are seriously considering developing your own NFT marketplace, you must have many questions, which is understandable given the complexity of this business. Let’s list some of the most important things to consider when entering the highly competitive NFT market.
Where Should I Start?
First, you need to build a team of competent developers consisting of business analysis, software architects, UI/UX designers, front and back-end developers, QA engineers, etc. Your team should include experienced blockchain developers able to provide solutions to your specific business. Check the expertise of each team member by conducting interviews and studying the portfolios. Your developers’ level of competence and skills will ultimately determine the quality of your product and its competitiveness.
Second, analyze the market requirements and define business goals. Determine what types of assets you want to sell and whether you want to create a universal or niche platform. Study your competitors and try to identify their strengths and weaknesses. In this way, you will be able to deliver a unique, competitive NFT marketplace.
Determine and follow the general standards, such as security, transparency, and decentralization, as well as technical NFT standards, including ERC-721, ERC-1155, dGoods, FA2, and TRC-721.
Then, you need to select the blockchain platform (e.g., Ethereum, EOS, Flow, Tron, Tezos, Cardano). Blockchain is the technology allowing the digital assets to be placed on the market, auctioned, and purchased without the risk of them being stolen. Due to blockchain, each transaction is secure and validated, making it possible to own digital items. The number of available blockchain platforms is confusing, so you need to study their technical characteristics, features, and advantages to select the platform that suits your specific needs.
The selection of the storage platform is also a responsible mission when you create an NFT market because blockchain cannot store media data. You can use IPFS, Filecoin, or Pinata to enable decentralized, secure storage of the data.
Determining more specific features of your NFT marketplace may be challenging as there are many things to keep in mind. These include but are not limited to the following:
- Visual attractiveness. Even if your marketplace has advanced technological features, no one will appreciate them if your NFT marketplace looks obsolete and difficult to navigate. Therefore, pay attention to the storefront design.
- Convenient search. There can be thousands of NFTs on your marketplace, so make sure users can find items they want using a sophisticated search. You may want to create asset categories, such as digital art, gaming, photography, domains, music, sports, and so on, to save users’ time.
- Advanced filters should accompany a good search. Let users filter the assets based on price, type, date, popularity, and other criteria, as it will allow them to find what they are looking for and increase sales.
- Bidding option. Allow users to place bids on items they want to purchase, as it will help track the assets’ popularity and set the price that reflects the demand. Don’t forget to set the bidding deadline to spark more interest and create a sense of urgency.
- Create listings. Users should be able to create tokens and add details about NFTs, such as name, description, price, etc.
- Wallets. An NFT marketplace should integrate wallets as one of the key features allowing users to trade NFTs. There are many options to choose from, such as Formatic, Coinbase, or MyEtherWallet. By adding more functions not listed here, you will make your marketplace even more user-friendly and unique.
Ready Solutions or Customized Development?
When it comes to the technical completion of the project, there are two options to consider. First, you can take advantage of the ready-made tools, which will save much time and money. For instance, OpenSea offers a comprehensive software development kit (SDK). However, if you want to make your platform genuinely unique, it is better to opt for custom NFT marketplace development. You can use the services of a software development company, such as 4IRE. Its team of experts in the financial software development, blockchain development, and digital assets tokenization can help build an NFT marketplace that will stand out from competitors.
NFT Marketplace Development Steps
Now that you know much more about NFT marketplace development, let’s go through the major steps, some of which we have already mentioned above:
- Business analysis (technical feasibility, viability, market demand)
- UX/UI design (UX wireframing, creating prototypes and UI mockups)
- Creation of the smart contract protocol
- Front-end development
- Testing and eliminating errors and bugs
- Launching and maintenance
What If I Don’t Have the Expertise?
If the described steps are too challenging to handle, you can always use blockchain consulting. For example, the 4IRE team can help you enter the NFT market by designing a marketplace that meets all your expectations. Blockchain experts working at 4IRE will select the most relevant white-label solutions based on your business goals and financial resources. By using 4IRE NFT marketplace development services, you can ensure that your NFT platform is secure and functional.
The NFT market has been growing very fast, meaning that you have a unique opportunity to succeed in this relatively new sphere. If you manage to create an NFT marketplace that stands out and offers a bit more than its competitors, you will have a chance to attract users from all over the world. Who knows, maybe it is your marketplace that will feature in the news reporting another most expensive NFT deal.