Building a Decentralized NFT Marketplace
Most of the necessary technology is already available in a working marketplace.
Decentralization is one of the key tenets of the cryptocurrency revolution.
Decentralization has already appeared in many parts of the blockchain industry. Cryptocurrency blockchains are decentralized. Decentralized cryptocurrency exchanges (DEXs) are becoming increasingly popular. The popularity of Decentralized Finance (DeFi) has exploded in recent years. Decentralized Autonomous Organizations (DAOs) are starting to replace corporations. Decentralized computing is what “smart contracts” are all about. And decentralized storage is gaining traction (for example, Interplanetary File System or IPFS).
Non-Fungible Tokens (NFTs) are a specialized type of cryptocurrency. So, they share the decentralized nature of the blockchains upon which they are built. And the popularity of NFTs has soared in the past couple of years.
But all the dozens of NFT marketplaces that exist today are centralized. For example, OpenSea, Rarible, Foundation, SuperRare, Mintable, NiftyGateway, BoredApes, Singular, MagicEden, Objkt, Refinable, Binance, Crypto.com, FTX and all the many others — are all centralized.
So, why hasn’t someone built and launched a decentralized NFT marketplace?
First, let’s look at the requirements for a decentralized marketplace. To be decentralized, a marketplace must have the following attributes:
- NFT content must be accessible on many nodes of the network. The more nodes the better.
- The database that keeps track of NFT listings on the various nodes must be distributed/decentralized.
- A distributed governance mechanism.
- Decentralized communication channels between participants .
- A decentralized escrow mechanism.
- A decentralized policing mechanism.
To be viable, a decentralized marketplace also needs incentives. The marketplace must reward validator node operators for validating transactions. It must reward NFT storage node operators for storing listings. It must reward influencers who introduce new users. And it must reward others who provide other services to users of the marketplace. Incentives “make things happen” in a voluntary economy.
This is an imposing list of needs and wants for a marketplace to meet. Yet, there is a decentralized marketplace already in existence that meets these requirements.
That marketplace is OmniBazaar. OmniBazaar launched its marketplace and OmniCoin main net in October of 2018. It immediately acquired 10,000 users and hundreds of listings. Since then, it has languished due to lack of financial support. Its focus has been on servicing un-banked consumers in underdeveloped markets. It provides a nearly-free marketplace for physical goods and services. While serving the un-banked may be a worthy goal, there are several challenges in addressing these markets.
The management team of OmniBazaar (of which I am a part) has recently determined to “pivot” the company. We aim to become the first decentralized NFT marketplace. Fortunately, a complete, working, decentralized infrastructure already exists in OmniBazaar. So, this should be a simple pivot. And NFTs are digital/virtual products. So, marketing them eliminates many of the challenges of selling and delivering physical products.
What’s Required to Achieve a Working Decentralized NFT Marketplace?
To transition to an NFT marketplace, OmniBazaar would need to do three things:
- Add support for NFT tokens (ERC-721 and ERC-1155).
- Add support for MetaMask and other non-custodial web wallets.
- Add a Web 3 interface or Chrome plug-in to make the NFTs on distributed nodes visible through a browser.
A secondary target would be development of Android and iOS mobile apps.
None of these technical projects are particularly daunting. OmniBazaar used the remote-work development method for years — even before COVID made it popular and accepted. So, the developers could probably complete the above three primary in less than six months, at a cost of less than $250,000.
The other decentralization requirements mentioned above are already developed and launched.
Why am I Telling You This?
Those of you who have followed my writing here on Medium for some time may be curious why I am now focusing on, and writing about, NFTs instead of OmniBazaar. With this article, I hope to make it clear that this shift is not random, and it doesn’t mean that I am abandoning OmniBazaar. Quite the contrary — we plan to make NFTs a big part of the future of OmniBazaar.
Perhaps you know (or are) a Web 3 developer who would like to become a co-founder and co-owner of OmniBazaar. If so, please contact the author for more information.
Maybe you know (or are) someone who would like to invest in a decentralized NFT marketplace. OmniBazaar, Inc. is offering Series AA Preferred Shares under the Regulation D, Section 506(c) (a.k.a. JOBS Act) exemption from Registration. All investors will be required to verify that they qualify as “accredited investors”, as that term is defined in Regulation D under the Securities Act of 1933, as amended. See our Private Placement Memorandum for details of the offer, disclosures about the business, and risk factors associated with investment in OmniBazaar, Inc.
If you currently subscribe to my writing here on Medium, I encourage you to also follow AvatArt NFT Studios. That way, you will be able to track the evolution and development of OmniBazaar in the NFT field.
And you might enjoy learning something about the expanding NFT market.
