What Are Non-Fungible Tokens (NFTs)?
An NFT or a non-fungible token is made up using two parts – non-fungible and token.
Non-fungible, in economics, is used to describe any asset or goods that are non-interchangeable such as art, car, house, etc. They cannot be swapped with any other thing of exactly the same value. On the other hand, a fungible item, such as a ten-dollar bill can be easily converted into ten one-dollar bills.
A Token is a virtual/digital representation or a proof of ownership of an asset stored on a secure and decentralized blockchain, such as the Ethereum blockchain.
A Non-Fungible Token, therefore, is a cryptographic token stored on a blockchain representing digital assets and creative products. Unlike a cryptocurrency, where all tokens are identical, NFTs are unique and very few in (as low as one) in numbers. This rarity makes them collectible, just like art.
Properties Of NFTs
1. Indivisible & Non-Interoperable
Each NFT possesses distinct properties and a unique identity. This makes them different from cryptocurrencies based on blockchain technology like Bitcoin.NFTs exist as a whole and cannot be broken down into smaller units.
As the underlying blockchains are not-interoperable, so are the NFTs stored on them. It means if your NFTs were created on the Bitcoin blockchain, you cannot transfer them to Ethereum or any other chain.
2. Freely Tradable
Like cryptocurrencies, NFTs have special marketplaces where they are listed and can be traded. But unlike cryptocurrencies, they cannot be acquired on a crypto exchange.
An NFT is a public record of ownership that can be verified by anyone who wishes so. The legal right to the title, income, and transfer of the digital asset is still a matter of legal grey areas.
4. Multiple Ecosystems
To create, sell, acquire, and own an NFT one has to work with multiple ecosystems in the blockchain universe. These include cryptocurrencies, digital wallets, marketplaces, NFT standards, and the blockchain itself.
As the world is opening to the wonders that cryptocurrencies are, the interest of people in owning NFTs is also growing. Additionally, the absence of clear rules governing the NFT marketplaces makes them ground for fervor and activity. Therefore, people are seeing a high amount of liquidity in the NFT space.
To be able to programmatically convert your digital asset into an NFT is the first requirement for any digital artist. The process involves a complicated mechanism of creating a unique encrypted token, but that is taken care of by specialized tools and apps provided by NFT marketplaces.
NFTs are designed to share the fruits of their work. Therefore, whenever an NFT is traded, a fixed sum or percentage of the deal goes to the crypto-wallet of the creator of the NFT.
This opens a world of opportunities for artists who were denied their rights and credit for their creativity and effort. However, figuring out the exact amount of royalty payable is still an open question and depends on the artist in question.
The creator of the NFT has complete control over the number of copies of the digital asset that can be made and circulated. It may be as low as one, or up to a few thousand copies, creating an artificial scarcity of the NFT. The scarcity and uniqueness of the NFT drive its value.
Any given NFT can have only one owner at a time and the ownership record is publicly available on the blockchain.
How Does An NFT Marketplace Work?
An NFT marketplace could be understood from the client’s perspective.
All NFT platforms require the users – creators or NFT collectors – to sign up and download their apps. Their apps work as the digital wallet to store and access the NFTs that you own.
Creators can then convert their digital assets into NFTs by uploading them onto the marketplace app through the creator section. While setting up the NFT, they decide on the number of copies and the cryptocurrency in which they would accept payments. Creators can also define a fee royalty for future trades in their NFTs.
Once created, the tokens are submitted for approval and listing. Creators can either opt for an auction with a reserve price or a fixed price for listing on the marketplace. When an enthusiast places an order, a smart contract transaction is created, and the ownership rights are transferred.
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A Brief Introduction To NFT Marketplace Development
1. Development From Scratch
To develop a completely new NFT marketplace you need a team with considerable experience in front-end, back-end, and blockchain technologies in needed. You will need to develop portals and apps for NFT buyers, NFT Sellers, NFT Creators, and the marketplace admin.
A significant amount of investment would be needed to design, develop, test, deploy, and host the apps and portals on a cloud server. You will have to take care of many features such as security, authorization, SSO, user management, inventory management, transaction settlement, currency conversion, banking integration, shopping cart, marketing, and auction process.
2. White-Label NFT Marketplaces
Many blockchain developers have already built fully integrated NFT marketplace frameworks. These frameworks allow customization to allow the clients – the NFT marketplace managers – to make necessary changes. The UI/UX is fluid, minimalistic, and can be changed with ease.
As the NFT marketplace development companies are already hosting many such applications, they are best-suited to bring the latest technological innovations to your marketplace. Such white-label products are end-to-end integrated with multiple blockchains to allow you to take advantage of them.
NFTs Best Known Examples
Here are some of the most popular NFTs:
1. Digital Artwork: Beeple’s Everydays: The First 5000 Days is a photo collage that sold for $669 million.
2. GIFs: The 2011 GIF of the Nyan catwas sold for 300 ETH.
3. Digital collectibles: The inventor of the WWW, Sir Tim Berners-Lee, sold the source code for $5.4 million.
4. Music: Popular US rock band Kings of Leon released their latest album as an NFT and sold 7000 copies for $2 million. They also sold six ‘Golden tickets’ for lifetime front-row seats on every tour.
5. Videos/Clips: A single LeBron James dunking video NFT was sold for$200k by NBA Top Shot.
6. Photos: 125,000 units of Actor William Shatner’s photo collection were sold in under 9 minutes.
7. Tweets: Twitter co-founder Jack Dorsey sold his first tweet for more than $2.9 million.
8. Games: Fashion major Louis Vuitton developed avideo game – Louis: The Game. The players could complete challenges and find hidden NFTs in the game.
9. Pattern: The Larva Labs created randomly generated CryptoPunks – or patterns of avatars. Their investors include artist Jay-Z to credit card company Visa.
10. Creative writings/Essays: NYT journalist Kevin Roose sold an article on NFTs as an NFT for $60k.
Items Of The Real-World Realm That Could Benefit From NFT
- Smart Contracts: These may include deeds to a car, House/Property papers, tokenized invoices, and even legal documents.
- Tickets to a real-world event: Many venues now sell their tickets in the form of NFTs to their patrons.
- Signatures: Artists can sign their artwork by including their signature in an NFT’s metadata.
- Promotional Space: Oleksandra Oliynykova, a budding Croatian tennis player, auctioned off a small section on her arm as an NFT. The owner can tattoo anything they like on that small section.
- One-of-a-kind-fashion items: The look Labs’ first-ever digital fragrance Cyber Eau de Parfum was the molecular wavelength of the real perfume.
- Unique pair of sneakers: Digital sneakers for your virtual avatars are selling like hotcakes from RTFKTfor up to $10k/pair.
As the creativity of people explodes, we will see not only more digital assets being created but also more physical ones tokenized for digital ownership or consumption.
Why Is NFTs Popular?
NFTs a.k.a. nifties are gaining exponential popularity and adoption in recent years. Many factors contribute to the growing adoption of NFTs.
- New investors took note of the Cryptocurrencies since the 2020 bull run and NFTs were the logical next step.
- As people were locked in their homes their creativity exploded. Artists found NFTs as the platform to promote and earn from their creative work.
- Patrons also accepted this new form of ownership as it made their authentic collectibles easily tradeable.
- Many celebrities have taken to NFTs – Paris Hilton, Jay-Z, Jimmy Fallon, and Stephen Curry, are not only investors in NFTs, but they are also promoting their own NFTs.
- With NFTs, the problem of copied/cloned digital artwork or IP has been solved with certainty. You get your “Digital bragging Rights.”
- NFTs are durable, public, and decentralized – just like their underlying technology blockchain.
- In contrast to regular digital content, which is available with no limits on supply, NFTs create scarcity and drive their value.
Best NFT Marketplaces
Today, there are many NFT marketplaces with a niche of their own. If you are an NFT creator and wish to promote your digital art, then choosing the right NFT marketplace would matter the most.
Following are some of the best NFT marketplaces:
OpenSea is one of the earliest NFT marketplaces. Being the first mover, it commands the largest market share in NFT sales. It is like the Amazon of the digital realm. OpenSea offers all sorts of digital assets on its marketplace. Users can sign up for free and check their extensive offerings.
OpenSea is also considered to be artist-friendly and has an easy minting process for creating their NFT assets. It now also uses Polygon. It supports a sea of different payment tokens (more than 150) and is a great place to start.
Another huge marketplace for all sorts of NFTs, Rarible is very similar to OpenSea. There is however one difference – it uses its own token Rarible (CRYPTO: RARI) to trade. Rarible is built on the Ethereum blockchain.
Another plus for Raribleis that it has an affiliation with some noteworthy companies. For example, Yum! Brands (NYSE: YUM) Taco Bell and cloud software giant Adobe (NASDAQ: ADBE) have partnered with Rarible.
3. Nifty Gateway
This NFT marketplace has witnessed the most explosive NFT sales. This is where Beeple’s CROSSROAD and Pak’s The Merge, two of the most expensive NFTs to date, were sold.
How NFT Marketplaces Work: 4 Key Factors
NFT development requires much more than coding for blockchain. Similar to any product marketplace, an NFT Marketplace’s development entails many security, business, and technological aspects.
The NFT marketplaces must be user-friendly places with a simple and intuitive front-end environment for the display and brokering of files. They must also have a well-designed back-end to support the core blockchain tech.
The four most important pillars of an NFT Marketplace are:
1. Crypto Wallets
All users need crypto wallets to work with NFTs. You purchased or created NFTs that are not stored on your devices in files. Instead, an NFT entry in your wallet encloses information that points to the location of the owner’s files on the blockchain. To support a large client base, marketplaces need to work with multiple crypto wallet providers like MyEtherWallet or WalletConnect.
2. Auctions & Sales
NFT marketplaces and real-world art galleries share their auction events. Sellers have the option to list items for sale at a fixed price or for auction. Marketplaces can hold programmed virtual auctions for new digital works by artists.
3. Smart Contracts
Smart contracts are executable contracts. They specify the terms of sale between a buyer and seller. These terms are coded into a self-executable digital contract stored on the blockchain network. Once both parties meet the terms, the contract authenticates itself and the transaction becomes irretrievable.
4. Costs Of Operation
All transactions and deals involving blockchain are energy-intensive. Most users do not understand the energy consumption behind blockchain technology. Executing any transaction on the NFT marketplace involves considerable expenses. Therefore, the cost of NFTs may also include the operational costs of brokering the transaction.
Features Of An NFT Marketplace
The below-listed features are a must for an NFT marketplace – both general and niche – to bring in users and make them stay.
The storefront of the NFT marketplace is the area where all new offers are listed, deals are showcased, and serves as the starting point for all users. It may also serve as the dashboard for registered users.
Depending on the users, the information displayed in the storefront dashboard may include – NFT Object description, Owners, Bids, Previews, Value history, etc.
Only an attractive and interactive storefront can convert passive users of the marketplace into your site’s active users.
With countless pieces of digital art, users may feel lost in the maze. Hence, an efficient search with multiple filters can help them in zeroing on the desired art. It can also be used to recommend to them similar and new artwork.
Filters help a user define the search criteria and to locate the right product quickly and effortlessly. Proper categorization and tagging allow for faster search and offer the most targeted results. Common filters can be prices, categories, artists, hottest offers, popularity, and so forth.
Crypto and NFT wallets let the users store, submit, and obtain tokens in a seamless process. Best NFT marketplaces let users integrate their existing wallets into their platform. For this, your marketplace must support a large number of wallets.
Whenever you go shopping, say for groceries, making a list makes it easy. In the same way, you can also let your users create public lists and wish lists. The listing page can show the detail of the NFT artwork and digital assets with their titles, tags, detailed description price information, auction details, etc. are all shown in one place.
Status Of Listing
Several digital assets are sold in a collection where users organize and specify token properties. Listing status is useful in such cases. It helps boost NFTs sales, collectible verification, and check the status of the confirmation process.
Buying And Auction
Collectors must be able to easily buy and place a bid for items from the listing page or even from the storefront. Making this feature accessible and easy to use is critical for any marketplace. Critical details like reserve price, current highest bid, and bid validity date/time should be easily available. Transparency in the auction process will increase users interest.
Allowing the members to rate articles on an NFT marketplace and give feedback makes the platform interactive. Enabling the users to share their experiences makes them emotionally invested in the success. It also allows others to check the credibility of an artist. This feature is extremely helpful, particularly for beginners, in selecting products quickly and understanding how the system functions.
Supporting multiple blockchains and cryptocurrencies allows an NFT marketplace to gain more users. Cross-chain interoperability requires much technological investment and effort.
Auctioning an item attracts not only buyers and sellers, but also attracts more users who are not participating. More artists will come to the marketplace if they see a transparent and friendly auction process. This, in turn, will help in generating traffic to your site.
One cannot compromise on the security of their NFT marketplace because the threats of invasive attacks are growing every day. Developing a marketplace with adequate security features to withstand attacks such as DDOS, CSRF, SSRF and the likes will help build trust among the users.
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Process Of Developing An NFT Marketplace
Keep in mind the following stages to build your own NFT marketplace:
1. Choose a Niche
According to experts, investing to become a key player in a niche or a vertical market is better than spreading yourself too thin trying to cater to everyone and everything.
2. Determine Your Blockchain
Identifying which blockchain technology will you use will affect most of your decisions going forward. Whether you would want to support multiple blockchains or cross-chains is also a critical factor.
3. Define Your Project’s UI/UX Design
Project design, including the UI/UX design, is the first and essential step in any platform development process. The UI must be intuitive and easy to use. Decent UI/UX enhances usability and features an aesthetic appeal to the platform.
4. Smart Contracts
Designing smart contracts on the blockchain requires a deep experience and thorough knowledge of the technology, marketplaces, legal requirements, security, and the products being sold.
Identifying where and how the artists and users will store their NFTs and where the transaction details will be stored is supercritical.
Integration with payment gateways, digital wallets, social media, and other apps in the ecosystem is also important to gain visibility.
7. Beta Testing
Finally, it’s time to examine and fix any shortcomings. Software testing is crucial in ensuring that everything is running smoothly.
Post-launch assistance is necessary to reduce hiccups along the way. Many bugs surface only when a large number of users start using the system. Similarly, quality and performance issues also need constant support.
Launching Non-Fungible Tokens Marketplace As Personal Business
If you are planning to launch your own NFT marketplace and want to earn from it, you need to find the answers to the following questions.
1. Choose a Niche
According to experts, gambling on a vertical market (goods/services provided align with the requirements of specific customers) is better than in a horizontal one (everything is offered to everyone like eBay).
2. Plan User Roles
A user could be a buyer, artist, or even an admin. Think carefully and assign roles accordingly.
3. Define Your Project’s Design
Project documentation which includes your UI/UX design is necessary for the platform creation process. Back-end architecture, security framework, and transaction settlement processes must be clearly laid out.
4. Move To Creation
It’s time to implement your idea once you’re all set with the design concept. Select the framework that you believe would fit your goals best of all. To save time, cut expenses and receive guaranteed excellent performance and credibility, some choose to hire a professional NFT developer.
5. Apply Smart Contracts Token Generator
Back-end development looks very different in the process of an NFT marketplace development. The majority of information is contained on the blockchain since the NFT marketplace is a decentralized platform.
6. Examine & Deploy
Finally, it’s time to examine, deploy and fix any pitfalls. Software examinations are crucial in ensuring that everything is running smoothly. Post-launch assistance is also necessary to reduce bugs and assure quality performance post-launch support is very important.
Things To Consider When Building An NFT Marketplace
Your NFT marketplace must be as transparent as possible. This provides users a clear view of all transactions and helps build trust.
In any NFT marketplace, security is of utmost importance. The in-built features should protect users from transaction loss and attacks on their wallets of the marketplace itself.
Maintaining the marketplace on a robust blockchain automatically promotes decentralization. You can increase it by maintaining redundancy on multiple blockchains.
4. The Monetization Model
It greatly affects your marketplace. For example, OpenSea does not charge for listing. During sales, however, the platform withholds 2.5% of the product cost.
5. Smart Contracts
Smart contracts can be signed online, and no commission fee is needed for initializing them. This should be done to prevent deceitfulness and decrease mediators.
Advantages Of NFTs For Artists
1. Low Bar For Entry
The digital realm allows artists from all fields to enter a global and rewarding marketplace. Artists like musicians, singers, authors, painters, visual artists, players, video/animation makers, game developers, and much more can enter the marketplace and sell their wares.
2. Global Market
When you list your artwork on an NFT marketplace, you enter the global stage and are not bound by local or national boundaries. The dependence on art galleries, exhibitions, and conventions simply does not exist anymore.
Conventionally, artists used to get paid only when their work was sold for the first time. Any subsequent appreciation in value and sales realization always eluded them. With a strong creator bond, and smart contracts, NFTs allow artists to earn royalties on each sale and resale of their work.
Advantages Of NFTs For Buyers & Collectors
The convenience factor works both ways. Many buyers who could not access conventional galleries or auction houses can also patronize artwork through NFTs. The marketplace is in your phone always.
2. Support Artists
Many collectors wish to support their favorite artists but find it challenging. With an NFT marketplace, you have the opportunity to directly connect and trade with artists to support them. With regular royalties, you can continue to support your artists.
Usually, an NFT is not just a single encrypted file stored on a blockchain. Many NFTs come with added benefits like personalized messages from the creators, high-quality files, and behind-the-scenes clips. Marketplaces can offer exclusive access to events, lucky draws, free content, and much more.
4. Financial Gains
As people move from the physical to the virtual realm, and as the metaverse evolves, the financial value of NFTs will increase. Not most NFTs will skyrocket in a short time, but if you know how to choose the best, your art collection can be worth millions one day.
Benefits In Launching Your NFT Marketplace
There is no doubt about it that NFTs are the next big thing. Judging by the market trends and technological advancements, launching an NFT marketplace is an idea worth pursuing. NFTs will take the center stage as more corporates make entry into the metaverse.
If you want to see if the NFT marketplaces can thrive, just look at how OpenSea and Raribleare doing. They host a record number of users and are the gold standard in NFT marketplaces. Trying to clone their idea and adding your unique perspective to it is not a bad business idea!
How Does Blockchain NFT Marketplace Operate?
They operate through a transaction protocol known as smart contracts, the heart, and soul of NFTs. Let’s dive in deeper.
Definition Of A Smart Contract
A self-executing contract inscribed in the lines of code. It states the agreement between the customer and seller. Its bases are cryptocurrencies and data that exist across a distributed, decentralized blockchain.
How Does Smart Contract Work?
Each smart contract has specific and original information embedded within the contract. The uniqueness of the contracts and their public availability on the blockchain makes them safe and non-repudiable.
Prepared Tools vs. Custom NFT Marketplace Development
By now, we are well versed with an NFT marketplace and how it works. But what about the marketplace development? Let’s see a comparison between the two choices.
- Quicker and hassle-free development.
- More economical but less unique and less secure.
- Common tools include SaaS, CMS, API, and PaaS.
- Most prevalent ready-to-use tool – OpenSea SDK.
- Time-tested and highly compatible development strategy.
- All expectations and processes are taken care of by an experienced team of developers.
- Feature addition, up-gradation, and development for scale are much easier.
- More challenging and time-consuming, but the project will be unique.
- More and assured security measures
- Only trusted and verified third parties are involved.
Where Can I Find NFT Developers?
One can find some of the finest NFT developers on talent marketplaces, freelancing sites, and job boards. But looking for an individual does not make a team. You should rather look for a team of passionate developers to build your custom NFT marketplace.
You can look for NFT developers at:
Niftyjobs — NFT Job Board
Explicitly designed for jobs in the NFT space. All you have to do is create a job post based on your requirements and a professional will contact you. Filters are available for technology, experience, jobs, location, contracts, and roles.
One of the world’s most popular professional networks and another great place to start your NFT talent hunt. If you want to hire NFT engineers through LinkedIn, follow these steps:
- Set up a Company Page and enable “job postings”.
- Use appropriate keywords related to NFTs making it easier for NFT developers to find your job post.
- Target your audience using various filters to find the right fit.
If you want to save time and resources, talent marketplaces, like Revelo, are the right place. Their USP is that professionals are pre-vetted by them.
How Much Does It Cost To Create An NFT Marketplace?
The cost of NFP marketplace development is highly variable and depends on multiple factors. The simpler your platform, the lesser the cost and vice versa. Some of these are:
- The blockchain used
- Support of cross-chain
- Support for digital wallets
- Ready-made vs. custom development
- Security features
- Performance and scale
- Monetization model
Readymade solutions, though economical, lack security and uniqueness. Conversely, custom-made solutions may cost more but the entire functionality and designing of the marketplace from scratch will cater to your needs.
Make Your Dream Project Successful With Us
Emizentech has been a blockchain and NFT marketplace domain for the last 8 years. We are one of the early movers who have now a team of experienced developers. Our successfully completed projects are a showcase for our expertise in all aspects related to blockchain technology.
The confidence, reliability, and passion of our team enable our clients to come up most egregious ideas. They have the confidence that we will help them realize their dream project.
Whether you want to build an NFT marketplace from scratch or want us to offer a white-label solution, we are ready for any challenge.
The excellent support and reliable partners are the other advantages that you get by aligning with us.
NFT marketplaces are yet to see their peak. With the digital versions of different art forms, collectibles, creative assets, and even from the physical world are making waves, the NFT marketplace is a business worth pursuing.
As more people will create, buy, and sell, the popularity of a secure and reliable NFT marketplace will only enhance. The domain is popular but not overcrowded as of now. This presents you with a perfect opportunity and time to launch your own NFT marketplace.
Frequently Asked Questions About NFT Marketplace Development
- Why do I need to hire an NFT developer?
They are highly skilled and experienced professionals with a deep understanding and knowledge of blockchain technology. They ensure the delivery of highly secure, reliable, and fully customizable NFT solutions.
- Where can I get the best NFT Marketplace Development Services?
To eliminate possible barriers in your development journey, you should choose a reliable partner like Emizentech.
- Can I create my own NFT marketplace?
Yes, you have two options – use ready-made tools or hire custom development service providers.
- How do you make money with NFT?
By buying and selling NFTs on a marketplace, like OpenSea or Rarible, you can benefit from the appreciation in value. If you are a creator, you can create NFTs from your digital work and auction them on marketplaces.
- Where can I sell NFT?
On many NFT marketplaces – OpenSea, Rarible, Nifty Gateway, and Axie Marketplace.
- What is the best marketplace for NFT?
OpenSea is currently the largest and most popular NFT marketplace.
- What is NFT in crypto?
Photos, clips, videos, GIFs, anything that can take an encrypted digital form. These NFTs can be traded online using cryptocurrencies.
- How do you buy and sell NFT?
First, you must have a balance in your cryptocurrency wallet that is supported in the marketplace. Once you have connected your crypto-wallet to an NFT marketplace, you can participate in auctions of buy products at a fixed price.
Similarly, if you have an NFT in your possession, in a wallet, you can list it on the marketplace to sell it. All payments are done through your cryptocurrency wallet.
- What is an example of NFT?
> Beeple’s “Everydays: The First 5000 Days”
> Nyan Cat
> Grimes WarNymph
- What does it mean to own an NFT?
You obtain ownership rights but not any other rights such as the right of communication to the public or the rights of adaptation or reproduction.
- How long does it take to develop an NFT Marketplace?
The development time of an NFT marketplace depends on many factors – blockchain used, security measures, wallet integration, and user roles. Consult our experienced developers to get a realistic estimate of the development time.