Are you looking to create an NFT marketplace? Great decision indeed!
Many entrepreneurs are interested in creating an NFT marketplace on their own. In this article, we are going to discuss how to create one. We will also discuss the important features you must have in your NFT marketplace and the challenges you may face while creating one.
Let’s start with the very basics first!
What is an NFT Marketplace?
NFT is an abbreviation for Non-Fungible Tokens. It is a one-of-a-kind asset that cannot be replaced. The fundamental requirement is that NFTs must be in digital format. It is intended to be used as proof of a digital certificate of proprietary rights for items such as physical or virtual assets, codes, drawings, music, photos, tweets, films, and many more. Here are a few important aspects related to the definition of NFT-
Authenticity: An NFT must have an owner and the ownership is definable
Unique Value: Two NFTs can never have the same value. As a result, you cannot trade one for the other:
Place of Existence: NFTs are integral parts of Blockchain. They have the authority to create new types of investments and an NFT marketplace.
Originality: Each NFT is attached to a unique value and has a unique set of metadata.
Integrity: NFTs cannot be branched into different parts.
How Does an NFT Marketplace Works?
NFT marketplaces employ a blockchain architecture that generates a read-only record with a unique, non-fungible token. Once a token is exhausted onto the blockchain, the buyer of the NFT gets foolproof evidence of ownership that can be validated in the public domain.
When a user opens an account on the NFT marketplace, he gains access to some or all of the following features, depending on the platform:
- Create NFTs
- Browse the available options for sale
- Buy and sell NFTs directly for a fixed price or on an auction
- Connect with creators and join the community.
- Save and display their NFTs
- Add payment method (credit card or crypto wallet)
When a user purchases something, the NFT marketplace registers the transaction on its blockchain, reflecting the change in ownership. Users are not required to understand blockchain technology to participate in the NFT marketplaces.
What are the different types of NFT Marketplace platforms?
The main types of NFT Marketplace platforms are discussed below-
This kind of NFT marketplace functions similarly to eBay. A large range of NFT collections is available in a universal marketplace. Because you don't target a specific category of consumers, universal marketplaces can quickly attract a large number of users. It can collect different types of non-fungible tokens, including sports collectibles, artwork, trading cards, virtual worlds, and domain names.
If worldwide NFT marketplaces are similar to eBay, niche marketplaces are similar to Goat's top sneaker collections. Niche marketplaces are becoming more popular as they focus on unique, uncommon assets and attract users with specific tastes. NFT art marketplaces are an excellent example of a niche marketplace. SuperRare is an example of a niche marketplace dealing in digital artworks with a niche selection of concept artists.
Now that you have got a basic idea of what an NFT marketplace is and how it performs, let’s dive deep into our main topic today- how to create an NFT marketplace.
How to create an NFT marketplace - Steps
Before you start developing your NFT marketplace, consider what makes your service unique and differentiates it from the competition. Identifying a niche might assist you in catering to an engaged audience that is ready to purchase. Having a well-defined objective is essential in this situation. When you are absolutely sure of your offering, it's time to create an NFT marketplace.
Here are the important steps involved in creating an NFT Marketplace-
- Select a blockchain architecture
This first phase is easily defined as the most challenging component of the procedure. Many other aspects of your venture will be influenced by your choice of blockchain technology for your NFT marketplace. You can use existing blockchain technology, such as Ethereum, or you can use other popular technologies such as Solana, Cardano, or Polygon. This can be a costly affair because you may need to hire specialized developers to integrate with these current blockchains. There are multiple vendors that provide alternative blockchain architectures known as side chains. They offer optional interaction with a major blockchain like Ethereum.
Following the initial integration, each transaction (selling of an NFT) will have a cost. This is known as a "Gas Fee" in the NFT terminology. You can even create your own blockchain architecture, although this can make establishing trust more difficult. A homemade architecture does not always provide the same guarantee against third parties accessing and modifying blockchain records.
- Select between a closed or open market
Creators must also determine whether they want a closed or open NFT marketplace. A proprietary token will be used in a closed NFT marketplace. on the other hand, a broad selection of tokens will be supported by an open marketplace. OpenSea is now the primary marketplace for NFTs, supporting over 150 different payment tokens. In an open market, anyone can register an account and begin displaying their merchandise at any price they like. As a result, a price model based on "supply and demand" is created. Furthermore, when purchasing or selling digital assets on open marketplaces, purchasers will not have to worry about NFT compliance with a specific blockchain.
- Design the ‘frontend’ of your marketplace
Once you have figured out the backend parameters of your blockchain technology and market type, it's time to move on to the front end. This will involve the design of your marketplace's UI/UX. What kind of experience do you want your users to have? You need to decide on things like the homepage design of your marketplace and how to present your NFTs. see that the design is user-friendly and accessible.
- Figure out the commission fee
When your marketplace is appearing and functioning properly, it will be time to decide how much to charge your customers. Consider the revenue model you will use and how to collect your payments. Stay competitive and avoid overcharging as it may prompt users to opt for other suppliers. Therefore, you will need to offer value in addition to great NFTs and trustworthy security.
- Create or join a community
When you are a first-time marketplace in a highly competitive area, you should like to get engaged with your buyers and develop a community. When your marketplace is ready for users, you may give new buyers membership in an exclusive club. This will help encourage recurring purchases. You can use conventional social platforms to do so. Alternatively, you can join messaging apps that connect gamers and cryptocurrency enthusiasts.
Certain NFT features your marketplace must have
Most successful NFT marketplaces have the following features-
- Sign In or Sign Up feature
- Feature to Sign in or sign up on the NFT platform with the email/social media accounts of the user
- Recover my password functionality
- Forgot password functionality
- User profile
- Add user name
- Add user bio
- Add photographs
- Select Budget
- Add user interests
- Payment Method
- Add different types of payment methods such as crypto wallets or credit cards
- Card verification feature with temporary transactions
- Create an NFT listing to place the NFT for sale
- Select currency, duration, and payout method
- mention the details of the deal on your page
- Select deal type: whether a fixed price or auction
- Add a fixed price or the starting price
- Add a minimum selling price
- Confirm the listing
- Create an NFT collection
Here, you should have the below-mentioned functionality
- Add title and description
- Add image/gif/video
- Add price and tags
- Mention ABIs, edition size, and deal type (auction / buy now)
- Mention drop date and limitations for participation
- Create a deals dashboard
- Mention the NFTs listed for sale
- Edit offers made: add scope to delete or change the bid
- Buy NFT
- Fix a price or bid amount
- Select the purchase type (primary or secondary)
- Enter payment details
- Select the payment method
- Pay with a credit card
- Options to search for NFT collections based on filters
- Collection name
- Creator name
- Admin panel
It should have functionalities such as-
- Upgrade the users to Creators
- Upgrade the Creators to VIP Creators
- Control offer duration on pages
- Deactivate or blacklist Users/Creators
- Chat or video calling feature
We have discussed above that users of NFT marketplaces like to be involved in a community. They may demand social interaction features such as –
- Video call feature
- Chat with the creator
- Other social features
- Event calendars for creators and users
- To enable influencers to create online/offline events with a user who purchased an offer recently
Cost to incur while creating an NFT marketplace
The cost of developing an NFT marketplace is determined by the amount of work necessary. To reduce costs, we advise you to think about software outsourcing and integrating it with ready-made solutions. Employing a software outsourcing company would surely save you money.
Please note that the cost of the NFT marketplace may increase depending on the level of customization you need. The cost may be on the higher side as compared to a ready-made solution if you decide to construct the platform from scratch. Other factors that may influence the cost of your NFT marketplace are as follows-
- Your project requirements
- Technology integrations
- The NFT marketplace development company you hire
- Region of a software development company
- Third-party API integrations
- Technology Stack
Important tips to succeed with your NFT marketplace
Here are some tried and tested strategies you may follow to have success with your NFT marketplace-
- Follow a competitive strategy
Ask the following questions to yourself-
- Who are your competitors and what do they offer?
- What are the needs of your target audience?
- What are the risks of launching your own NFT marketplace?
- How to meet these challenges?
Answers to the questions above will give you a fair idea of the target market segment. It will also help you find the competitive strategy you need to follow. It also creates the foundation for developing a successful platform that adequately meets the needs of your potential customers.
- Employ a test-driven approach to create smart contracts
When designing smart contracts, you need to identify all conceivable combinations of criteria that enable or reject a smart contract. Running test cases before writing the code allows checking requirements at the early stages of development and saves time you may need for re-coding.
- Enter the market with an MVP
If you want to get into a trending NFT market but are unsure about the viability of your business idea, don't spend your entire money on an end-to-end solution. Prioritize important functionality with your development partner to have a run-time version of your marketplace before fully launching it. Thus, you will obtain early feedback from the users and can move forward with much more confidence.
- Do not make any compromise on security
You should never make any compromises while securing your confidential data. To ensure the security of the marketplace components, you may consider cloud security solutions.
- Make your transaction data decentralized
Your transaction data should not be kept in a single location. We would recommend you make a copy of the data and distribute it across multiple network nodes. This type of decentralisation helps in the prevention of data loss during major attacks.
- Make the payment process a transparent one
The payment method you use must be error-free or capable of avoiding unexpected mistakes. use of Blockchain technology can help you execute your cryptocurrency transactions smoothly. With this technology, you will get a detailed view of every transaction that occurs on your NFT platform.
We hope the discussion above will help you understand what an NFT marketplace is and how to create one. We have also discussed other important aspects related to an NFT marketplace. If you are looking to build an NFT marketplace but do not quite have the expertise or a team of professionals, you may get in touch with BimaKavach. Here, you can get the best advice for any product in just 5 minutes.
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