All-In-One Guide To Create an NFT Marketplace Solution
Since the advent of assets backed by non-fungible tokens (NFTs) that promised to serve as ownership proof and authenticity, the craze for these digital tokens stored as entries on the blockchain ledger has been evident across social media. The hype exploded to a new high during the latter half of 2021, as digital art collectors now poured millions of dollars worth of cryptocurrencies on JPEG and PNG files created by previously unknown but talented creators. While this move benefited many creators, most people tend to forget the instruments through which these record-shattering sales took place — the NFT marketplace.
NFT marketplaces are the portals where NFTs can be created, listed, traded, and stored by users. Typically, payments are accepted in various cryptocurrencies, although a few businesses have started accepting fiat payments as a move to promote NFTs to more people. These platforms can sell generic NFT assets or NFT products based on a particular niche (such as artworks or games). Popular generic NFT marketplace platforms include OpenSea, Rarible, and Solsea. Some famous niche-based marketplaces are SuperRare, Decentraland, Axie Infinity, and Sorare. The marketplace portals can either run on a single blockchain network, function on multiple chains or even work across various blockchains to attract a wider user base.
In this blog, we will look at almost everything you need to know about NFT marketplace development solutions, as the title implies, new changes are coming up every moment.
How Does an NFT Marketplace Work from a User’s Perspective?
- New users create their accounts on the marketplace platform, after which they would have to link their crypto wallet to the account or transfer cryptocurrency into the wallet present in the portal.
- As a creator, the user mints their NFT items and groups them as collections. They can also choose their preferred cryptocurrency for payments.
- The creator should also decide how their NFT items would be sold. It can either be a timed auction or a sale for a fixed price. After listing the NFTs, a smart contract is created, which would record the transaction details every time the NFT is resold.
- Once moderation is done by the marketplace admin, the sale starts on the platform, and users who wish to buy the NFT can begin placing bids.
- Once a bid is accepted by the seller or the bidding deadline is reached, the sale would be completed by selling the NFT item to the user with the highest bid. The marketplace business gets a small proportion as a transaction fee to maintain its software.
- The buyer can store the NFT item on their wallet and sell it later on the same marketplace platform. In this way, the trade flow in the NFT marketplace keeps on functioning without restrictions.
If One Says “Details”, Don’t Ignore Them
- Various token standards exist that every NFT asset needs to be a part of, which differ with different blockchains. Ethereum has the standards ERC-20, ERC-721, and ERC-1155, Binance has the standards, BEP-20 and BEP-721, and so on.
- Each standard has exclusive features, which makes it special in some sort. For example, the ERC-721 standard requires individual smart contracts to be developed even if all the NFTs are the same (Eg., 100 NFTs of an artwork). In contrast, the ERC-1155 standard needs only the details of the NFT asset and the number of tokens to be generated. This can benefit gaming NFT asset developers as their burden reduces greatly while developing an in-game NFT item. It is enough to mention the details of the asset and the total number of assets to be made available.
- Metadata is a critical factor for marketplace businesses selling NFTs. This is since the marketplace software cannot understand blockchain entries which consist of letters and numbers. A description of the NFT item with images and text can be provided as metadata to make the software perceive the unique qualities of the tokenized NFT item.
- Legal regulations tend to stand as a huge problem for NFT entrepreneurs as these digital assets are largely unregulated, and there are regular changes in-laws. Forming clear policies is important as any issue can be addressed if the venture has set guidelines and keeps up with regulations. The NFT marketplace owner needs to be apprehensive while creating the business’s legal rules that include policies related to company formation, terms of service, community standards, IP details, and privacy policy.
- One has to know the difference between multi-chain and cross-chain functionality as these terms can easily confuse even people who have been in the industry for a long time. Multi-chain functionality is when the marketplace has separate platforms on multiple blockchains, and trade is restricted to the individual blockchains. Cross-chain functionality refers to when trading can be carried out across blockchains on the marketplace platform.
Features That You Can't-Miss in Your Marketplace Portal
- Storefront — The storefront of any NFT marketplace looks like any e-commerce site with products listed under different categories such as Trending, Featured, Coming Soon, Best-sellers, and more. Descriptions for individual NFT items can be seen. Sometimes, they even include extra information on the blockchain and the protocols the item is based on so that a user can verify the originality of the NFT.
- Search Engine — An NFT marketplace portal should have a search engine where users can easily find the product they want to buy. They must also include filters to make navigation easier for the user.
- Cryptocurrency Wallet — A marketplace selling NFTs needs to have a wallet for transactions from both ends. Some platforms allow the integration of existing third-party crypto wallets. Others have integrated crypto wallets into their portal in which users should fill in cryptocurrency to carry out trade.
- Notifications — For an NFT marketplace portal to become a hit, it is important to let users know about the current offers, future drops, bids on their NFTs, and more through emails and push notifications.
- Customer Care — A user would need a support feature when encountering some problem in the marketplace portal. A dedicated customer service functioning round the clock should be one of the core features of an NFT marketplace.
Steps Involved in Building an NFT Marketplace
- Before developing your new NFT marketplace, it is essential to have everything planned. Initial planning involves deciding the direction your new business would be heading and forming the roadmap that gets shaped as the whitepaper.
- Then, you can design the user interface (UI) and user experience (UX) for the marketplace platform using in-house developers or employ a firm that has experience designing such components. A vibrant design and an immersive experience would ensure a high amount of returning users.
- Then, carry out back-end development that plays a huge role as great work in the back-end ensures security and robustness. It would be easier to work with a development company with the necessary experience, as hiring in-house developers with such experience incurs high costs.
- In a marketplace platform, software defects can affect its seamless functioning. These should be tested for and troubleshot before launching. Support might still be required if new errors are found in the initial version.
- As user traffic increases and more issues get reported, frequent updates are mandatory to keep the business in the race.
The Important Question: How Much Do I Need to Spend?
The expenditure occurred in developing an NFT marketplace software depends on the business owner’s requirements. One would like to have it made from step zero (or scratch), while someone might look for a quicker option with a Whitelabel solution that can be customized. As the amount of customization increases, the development cost increases. Also, the expenses increase when special features such as enabling live auctions and supporting wider payment gateways need to be integrated.
A Note Before Ending
After giving this blog a read, if you have wondered about how difficult it is to build and run an NFT marketplace, you might be correct to a small extent. But, in hindsight, things can be made easier if you approach a blockchain development company that has pioneered developing brilliant NFT marketplaces while being client-centric. Such a company would ensure that the platform, your business would be based on would be of the highest quality and reinforced with advanced features.