According to NonFungible.com, in the first quarter of 2021, the total market capitalization of large NFT projects increased by 2,100% (over the whole of last year, the market grew by 300%). Most NFTs sell out instantly, and the most famous NFTs have been sold for almost $70 million. In addition, celebrities support the hype around NFT by tokenizing their music, paintings, memes, short videos, logos, computer code, and the like.
At the same time, the main beneficiaries of the NFT market have become sites that provide an opportunity for the simplest possible purchase and sale of NFT.
How does the NFT marketplace work?
Unlike Bitcoin or ether, you cannot directly trade non-interchangeable tokens on conventional cryptocurrency exchanges. To buy and sell NFTs, you need special trading platforms that allow you to issue, store and trade non-interchangeable tokens. Now, this market is dominated by large marketplaces OpenSea, Raible, Superfarm, and Mintable.
They generate NFTs using special smart contracts that add a set of unique information (metadata) to each such token and prescribe its main parameters (name, immutability, inseparability, address/number, etc.). After that, non-interchangeable tokens can be bought and sold on the site at a fixed price or through auctions.
On the client side, NFT marketplaces work like regular online stores. The user needs to register on the platform and create a personal digital wallet for storing NFTs and cryptocurrencies. The user can then either use the listing to purchase NFTs or create their own token. Launching an NFT is usually simple and similar to creating an eBay ad. You need to specify the name, price, give a description and image, photo, video, gif, and the like.
Niches and applications of NFT
Most NFTs are used to commercialize all kinds of digital art - from digital copies of real paintings to memes. For example, on the OpenSea trading platform, you can buy, sell and transfer images, videos, GIFs, and music. This platform runs on Ethereum and issues NFTs using the ERC721 and ERC1155 protocols.
But fine art is not the only field of application of non-interchangeable tokens. They can also be used to trade collectible cards (NBA Top Shot), game characters (CryptoKitties), real estate (Mintable), virtual worlds (Metaverses), investment offers (Spencer DINWIDDIE contract), and in any other area where you can tokenize ownership of something. The main thing is to create a marketplace that will be able to work with the ownership you need.
For example, if you want to develop an NFT marketplace for the fine art trade, then you, in fact, need to create a regular online store, which should be able to interact with blockchain in order to mint, transfer and list NFTs for sale. It's relatively simple. If you need an NFT platform for real estate trading, then you will need to create an analog of Zillow or Trulia. Such sites should be able to work with MLS databases and state register databases, determine the user's location, etc.
And so it is with each sphere. Here are some more examples:
Such trading platforms should provide a full range of services for training via the Internet - from selling a training course to tracking the progress of the buyer's training and communicating with teachers.
Such NFT marketplaces should function as a stock market for securities trading. That is, they should provide the opportunity to issue legally legitimate securities with the right to ownership, dividends, or a share in profits.
Non-interchangeable tokens can work as access keys to content, program, database, operating system, or event. To sell such NFTs, the marketplace must be as secure and reliable as possible, as well as support popular means of protection from the buyer (Touch ID, Face ID, Eye ID, etc.).
The sale and purchase of NFTs, which symbolize unique game items or characters, usually takes place either inside the game (for game money) or on external online platforms that guarantee the safe exchange of real money for a game asset (as in Steam). This implies a very close integration with the video game.
The main features of the marketplace
The NFT trading platform combines the functions of an online store, an auction, and a blockchain platform for issuing non-interchangeable tokens. Users should be able to create their own NFT products and sell them. In addition, such marketplaces usually offer some functions to attract and retain customers, as well as improve the quality of their service. When developing your own NFT marketplace, it is better to start with the implementation of the following things.
This function provides visitors to the trading platform with all the necessary information about the lot: name, price, description, preview, owner, purchase method, rating, etc. Some NFT marketplaces also provide information about the blockchain and the token protocol so that users can verify the authenticity of the purchased NFTs.
Make sure that your users can easily find the subject they are interested in. It would be nice to divide all assets into several categories, such as art, photography, video, domains, memes, and music so that it is easier for users to navigate the store listing. Filters also simplify navigation, especially if there are many items of the same type on the platform.
To be able to buy or sell NFT on the platform, the user must create an account. Usually, the registration process takes place via email, phone numbers, or social media accounts. In addition, the user is also usually asked to specify his cryptocurrency address. If it is not available, then it is possible to register using links to crypto wallets like Coinbase Wallet, Metamask, MyEtherWallet.
Create an ad
This process should be simple and not take much time. Ideally, it should be the same as on eBay. To achieve this, you need to think about the optimal user path and implement something like OpenSea collection manager. It helps to quickly upload a product to the site and specify the properties of the token, such as name, price, description, tags, external link, and so on.
Wallet for NFTs
Users need a wallet to send, receive and store non-interchangeable tokens and cryptocurrencies. The easiest way to do this is to provide integration with popular crypto wallets. The main thing is that such wallets support the NFT protocol you need. These are usually wallets such as Metamask, MyEtherWallet, Coinbase Wallet, and WalletConnect.
Usually, the NFT marketplace should have a section where the user can view their trading history. So you can understand how popular the site is, what it sells, and at what price. For example, on OpenSea, the trading history includes the following data: event, product name, price, buyer, seller, date.
Reviews and ratings
Shows how much the lot or seller/buyer is liked by visitors. This information helps users evaluate counterparties and specific lots. Usually, the rating is implemented in the form of a numerical evaluation of the product or likes. Reviews can be implemented both in the form of comments that all registered users can put and in the form of reviews that counterparties leave to each other.
You can implement a push notification system to inform users about new bids in a selected category or from a selected seller, a change in the status of a selected product, a new message, the sale of your own lot, or an update of the NFT trading platform.
Support. An important element of any trading platform. With the help of the support service, users will search for answers to their questions, solve problems and conflicts. You can implement the support service as a call center, support via email, a separate information portal, or using a help bot.