Ever since the first blockchains came into existence in the late 2000s, their potential has been known well. The statement has been affirmed with each innovation that the blockchain world has experienced – right from cryptocurrencies, crypto exchanges, and non-fungible tokens to decentralized finance applications. Each of them has been quite some revelations since they first came out. But it has not been the case for non-fungible tokens (NFTs), which were relatively unknown when they first appeared in the mid-2010s. Although a few of the current day’s legendary NFT collections, including CryptoPunks and CryptoKitties, had come out just after the infant stage of NFTs, they did not get the legendary status until very recently. It was only during the sudden bull run for the NFTs during the latter part of 2021 that they became a billion-dollar market in a matter of a few months, and many digital creators became millionaires.
But, the NFT bull run would not have been possible without the contributions from platforms called NFT marketplaces, which have served to be a reliable business option for budding cryptopreneurs and legendary brands. Serving as platforms where NFTs can be traded, these marketplaces suddenly became the hubs of the NFT boom, which they continue to date. In this blog, we will look in more detail at NFT marketplaces and analyze a little on whether a venture based on these platforms would be viable today.
NFT Marketplace – A Beginner’s Guide
An NFT marketplace is a platform where assets backed by non-fungible tokens can be bought and sold. These platforms are typically hosted on a blockchain network, and hence payments are made in cryptocurrency. Some NFT marketplace ventures accept payments through other modes, including stable coins (cryptocurrencies backed by fiat reserves) and fiat gateways (credit/debit cards and wire transfer), to attract more users to their platform.
NFT marketplaces can be based on selling general NFT products or specific NFT items (based on games, art, music, popular figures, and more). Examples of famous NFT marketplaces that sell generic NFT items include OpenSea, Rarible, Solsea, and LooksRare. Popular NFT marketplace platforms that sell NFTs based on specific niches include Foundation, SuperRare (Artworks), Sorare, Axie Infinity, Decentraland (In-game), NBA Top Shot, and FanCraze (Sports collectibles).
Developing an NFT Marketplace – Byte-sized Points
• Ideate Your Business Plan – Make sure that you cover all the facets of your NFT marketplace venture right from the start to future visions and missions. Based on the plan, draft the whitepaper for your new business.
• Build the UI – Then, start building the user interface for the NFT marketplace platform using suitable frameworks. Hiring expert designers is advised for better results in the final version.
• Embed Features – Afterwards, integrate all the features that your marketplace needs to have. Features include a storefront, search engine, filters, listing portals, bidding portals, crypto wallets, and more.
• Develop Smart Contracts – Then, build the smart contracts necessary for the NFT marketplace platform that decides the nature of the platform. It is here that the platform’s security and robustness levels are initialized with advanced development concepts.
• Test the Smart Contracts – After this, repeatedly test the smart contracts to find anomalies. Subject the portal through various test cases to completely eliminate any errors during development.
• Integrate Smart Contracts with the Platform – Then, combine the smart contracts with the already-developed platform, where the smart contracts get the first taste of the front and back end features present in the NFT marketplace platform.
• Test the Whole Platform – Afterwards, continue with testing the whole platform on your server with various test cases and resolve any deficiencies that arise. Expose the platform to a lot of test cases until the portal is completely free of any errors.
• Deploy the Platform – As the final step, deploy the NFT marketplace platform into your server and start trading operations with a beta version. Ensure that you release timely updates to keep up with the increasing user traffic and newer defects.
However, it must be noted that these are the steps to be undertaken if you are building an NFT marketplace platform from scratch. For customizing from a Whitelabel solution, it is enough to perform small changes in the already existing solution, which means steps 1-4 can be eliminated. It is also possible to create an NFT marketplace platform similar to a popular marketplace such as OpenSea, which is also a cost-efficient option. Additionally, the costs vary depending upon the model you choose – a Whitelabel solution would cost lesser than building from scratch, and every additional feature of any type incurs extra expenses.
Functions from Various User Ends
As far as buyers and sellers are concerned, each of them should be creating their accounts on the NFT marketplace and link their crypto wallets or fill cryptocurrency on the wallet present on the NFT marketplace platform.
For a buyer, they can view all the products listed for sale divided into various categories and niches, if present. They can make bids in an auction or buy NFT items from a fixed-price sale. The fee incurred will include the amount spent on the NFT item plus the gas fee of the blockchain networks. Some marketplaces even charge a small transaction fee, which is usually taken from the price of the NFT product.
A seller can make use of the listing portal to list their NFT products for sale. After listing, they can have access to statistics on their NFT items, bid history, and live updates through a dashboard. Sales can be made in three ways – Timed auction, timeless auction, and fixed-price sales.
The admin of the NFT marketplace platform could see a different perspective of the portal. They can change the service fee structure for both ends, view live statistics, burn unnecessary tokens, change other settings, moderate new NFT collections, and block malicious users to make the platform a safe trading haven.
Some Final Thoughts
Therefore, we can say that building an NFT marketplace platform will be a great option to delve into the crypto world. This is because the NFT boom has not died yet, and with blockchain games gaining traction, the need for marketplaces – generic and niche-based will increase in the near future. Hence, we can say that an NFT marketplace would be an attractive venture for people who want to capitalize on the high tide.
