How to Build an NFT Marketplace and Ride the Wave of Non-fungible Tokens' Popularity
12 Sep 2022
Decentralization is becoming a new and strong digital trend. As blockchain technology increasingly fills all areas of life, there is a growing interest in technologies such as decentralized finance (DeFi), cryptocurrencies, and Non-Fungible Tokens (NFTs). For instance, the number of DeFi users has increased by 300,000 since the beginning of 2022.
Simultaneously, the NFT market capitalisation shows an impressive 138% annual growth. Their popularity is because they create opportunities for new business models that did not exist before. Building NFT marketplace today is a great way to keep up with the trends and swoop into this industry before the competition gets too much.
This article will guide you on what NFT is, essential features of NFT marketplaces, examples of successful platforms, and, most importantly, how to make your own NFT marketplace.
What Is NFT and How Are Their Marketplaces Arranged?
And so, before we delve into developing an NFT marketplace, let's dwell on some details on this theme.
What is the NFT's essence?
NFT is a cryptocurrency trend that combines art and high technology. The phenomenon's essence lies in the technical ability to separate the artist's original creation from ordinary copies. Moreover, you can become the original's owner, which is extremely valuable in a situation where copies are the same as the original.These originals are intangible assets, and because of this, it can be difficult to distinguish between an original work and a “pirated” copy. And the NFT allows you to do this for sure.
The idea of a Non-Fungible Token (NFT) is closely connected to blockchain technology. Also, the NFT is standardized, utilizing mainly the ERC-721 standard. It refers to the Ethereum cryptocurrency, on which most NFTs are based today. This enables blockchains to interact, enabling the transfer of tokens.
Also, you can hold NFT tokens on the marketplace, or they can be withdrawn to another cryptocurrency wallet. For example, non-fungible tokens designed according to the Ethereum standard (ERC-721) can be kept in the Ethereum wallet or with crypto wallets that support ERC standard tokens. Furthermore, any creativity can be delivered as NFT, such as illustrations, photos, videos, and game attributes.
The rights the owner receives when buying NFTs are specified in the smart contract and are most often restricted by the capability to buy, own, and sell. This implies that the investor will not own the exclusive right to the object of art digitized in this way. The author can create several similar tokens, however, thereby significantly reducing the price of each one. Also, token ownership does not prevent users from creating pirated copies available to everyone on the Internet. Moreover, all relations of this nature are distributed and regulated only within a specific blockchain network.
Let's descover some prominent characteristics of NFTs:
- Unicity. It suggests that replacing any element with another token is unattainable, as you can do with cryptocurrencies.
- Originality. Every token has an exceptional value and metadata.
- Integrity. You cannot divide NFT into components or share ownership with someone.
- Authenticity. All token data is easily verified and can never be faked.
Specifics of the NFT
How to buy NFT?
Today many platforms for NFTs' generating, selling, or buying are created. Some specialize in specific objects, such as selling game items, while others deliver any of the existing token types. Let's analyze the purchasing procedure stepwise:
First, it's essential to get a crypto wallet. It comes in handy both for registration in various marketplaces and for payment.
Next, choose a marketplace that seems suitable to you and register in it. When choosing, pay attention to the assortment, commissions, and payment methods.
To purchase NFTs, most often you first need to purchase Ethereum or any other cryptocurrency. Since most NFTs are based on the Ethereum blockchain, almost all marketplaces accept ETH as payment.
Finally, purchasing a token is truly easy. Most marketplaces have an auction format, so you need to apply for the NFT you'd like to get and wait for the owner to respond.
What is the NFT marketplace?
The NFT Marketplace is a dedicated trading platform explicitly designed for non-fungible tokens. Users can buy, sell, store, and exchange them on it. Most commonly, trading is carried out for cryptocurrency. It is often Ethereum (ETH), but some marketplaces can accept Bitcoin (BTC), other types of cryptocurrencies, and stablecoins for payment.
Buying and selling are carried out similarly as on Amazon or any other marketplace. Some NFTs can be bought immediately, so you only need to click on the appropriate button and pay for the purchase. In other cases, you will have to “fight” at the auction.
Marketplaces may be divided into two types by offered product:
- All-purpose NFT marketplaces sell all sorts of tokens, from images about audio or even domain names.
- Niche sites are narrowly concentrated and deliver only certain NFTs, such as solely game skins or gifs.
According to the degree of restrictions on the placement of tokens, there are two types:
- Open. Every platform user can put their token.
- Closed. Only particular creators (usually the project team) have the right to allocate tokens.
So how do these NFT marketplaces work? First, they operate smart contract technology for secure token transfer. Furthermore, marketplaces utilize the unique metadata of each element, such as origin and authenticity information. This information is secured by blockchain technology. Likewise, the token protocol is needed when you build an NFT marketplace.
Find out the benefits of smart contracts by reading our article.
Let's say a few words about custom NFT marketplace development. To create such platforms, you choose from two options: you can build an NFT marketplace from scratch or buy a ready-made script and modify it to fit your needs. However, for developing an NFT marketplace of good quality, it is still recommended to build an NFT trading platform from scratch.
Next, let's consider which features are crucial for a successful project.
What Functionality Should Be Included in Your NFT Marketplace?
When you create an NFT marketplace, it is vital to recognize that it combines an online store, an auction, and a blockchain platform. Many also offer extra features to stand out from the competition and motivate users to choose their offer. However, to build NFT marketplace from scratch, you always need an initial primary set of features that will let users make and exchange their NFT products. First, let’s discover which core features are necessary for any NFT marketplace:
Viewing lots can be available without registration. However, the future customer has to log in to use the main marketplace processes, such as buying and selling. Building an NFT marketplace generally involves signup methods such as email, social networks, and phone numbers. You may also use cryptocurrency wallets for registration.
The base, without which no marketplace can exist. The user needs to find all the required information about the NFT, such as title, cost, payment method, owner, rating, etc. You can even provide data about the blockchain and protocol of the token, as this will increase user trust.
Exploring a particular lot should be manageable. Filters and categorization will significantly simplify the search process and improve customer satisfaction with the platform's use.
Uploading a token and entering all the essential details, such as price, characteristics, tags, etc., should be easy. The process shouldn't take long. For illustration, you may consider the examples of successful marketplaces to find inspiration for your own collection manager.
A wallet is vital to keep and move assets which are NFTs and cryptocurrencies. In order not to delve into building a new one, it is simpler to integrate any widespread crypto wallet, such as Metamask or WalletConnect, and a vendor with expertise in DeFi will help you with it. The only requirement is that it must support the NFT protocol you use.
Except for these ones, there are some features that can highly increase clients satisfaction:
Reviews and ratings
Any marketplace requires features that will allow you to evaluate sellers and the goods they offer. The rating system can be executed as a score or stars/likes. Reviews are most often implemented as comments that all users can see.
A valuable component that will improve user experience. Push notifications about changes in the status of selected products, platform updates, new rates, actions with the user's product, etc., are essential and valuable features.
Every quality marketplace has to include this feature. Users need to find out the answer to any question they have, settle conflicts, and solve technical problems. Interaction with the support service can be performed using a chatbot, call center, or email.
Some essential features on the example of OpenSea
NFT Marketplaces' Success Stories
There is a comprehensive variety of NFT marketplaces. Each has its peculiarities that make them stand out from the crowd. So before you start to build NFT marketplace, let's examine the most favored ones.
The site is one of the most well-known today. Founded in 2017, it suggests all kinds of NFTs, like images, audio/video objects, etc. The OpenSea protocol operates NFT tokens of the ERC721 and ERC1155 standards (for collections). You can use any ERC20 standard tokens for paying. The marketplace supports Ethereum, Polygon, Klatyn, and Solana and works on compatibility with Flow. The platform commission is 2.5% when selling NFT and this is the major monetization model of this site.
This platform focuses not on the number of tokens, but their quality and mainly sells the creations of famous artists. NFTs on the marketplace are named nifties, consonant with the marketplace's name. A feature of the site is that it supports transactions using fiat money, currencies already familiar to us. For the purchase of NFT, the marketplace withholds a commission of 5% and pays 10% from each subsequent transaction to the token's author.
Nifty Gateway interface
The concept of the site is reflected in its name, which demonstrates that it allows you to purchase unique NFTs released in a single copy by eminent artists. Another feature of SuperRare is that it combines a marketplace and a social network where you can observe the artist's activities. However, the platform's commission is relatively high and involves 3% per transaction, 15% from the buyer, and 10% royalties for the author on each resale.
NBA Top Shot
An illustration of a very narrowly focused marketplace. Its target audience is basketball connoisseurs. They are offered video cuts with highlights from past games. The value of each NFT depends on its uniqueness. Likewise, NBA Top Shot runs on the Flow blockchain and charges a 5% commission on every transaction.
NBA Top Shot
Quite an unusual NFT marketplace in the form of an online game. NFTs presented on the platform are cute little animals, the so-called Axie. They can be purchased, grown, developed, and marketed to other users. The site also allows users to earn in-game currency AXS by winning battles and exchanging it for real money. This marketplace's popularity is increasing as it attracts users with exciting gameplay and unique NFTs.
Essential Points to Consider When Creating an NFT Marketplace
NFT is a reasonably new technology, so if you are seriously thinking about how to create an NFT marketplace, you should study specific technical details of this topic.
How to make an NFT marketplace step by step
Although the custom NFT marketplace development process is quite complicated, there are things you can do, namely:
Step 1. Determine the niche in which you will be creating the NFT marketplace. You can focus on works of art, make an NFT marketplace like an online game, or a video-on-demand platform.
Step 2. Choose an NFT marketplace developer company. Since making an NFT marketplace is quite a complex process, you need a team of experienced professionals in different industries. Pay attention to outsourcing companies, as they will allow you to get a qualified team without wasting time searching for each specialist separately.
Step 3. Together with designers, define UI/UX design for the future platform. High-quality design is an important part of building an NFT marketplace, so this point should be given special attention.
Step 4. Monitor the creation of the NFT marketplace at the stage of frontend and backend development.
Step 5. After all the technical tests and when all the possible bugs are fixed, get ready to launch your NFT marketplace.
Step 6. Deploy, enjoy your own NFT marketplace, and don’t forget to update and evolve it.
Below we will take a closer look at the development steps, and now we need to pay attention to the specifics of NFT marketplaces:
Using blockchain technology and smart contracts
The use of blockchain in the NFT provides many benefits when you create NFT marketplace. Blockchain, which underlies the operation of NFT platforms, provides trading with many advantages, namely:
The blockchain network guarantees complete transparency of all payments and allows users to see all transactions.
When you build your own NFT marketplace, you have to pay special attention to security issues. You must guarantee users the complete protection of all transactions and the safety of their tokens. Blockchain enables us to notice and cancel any suspicious operation immediately.
Information will not be accumulated centrally and therefore the operation and data storage becomes flexible. Instead, all critical data will be held in the blockchain, updated every time a new block appears.
Furthermore, if you desire to create your own NFT marketplace, you will need to implement smart contracts technology into the platform since it guarantees safe token trading.
A smart contract as a software (computer) code implemented on a blockchain platform, makes it achievable to ensure the self-execution and autonomy of the terms of the concluded contract in the event of the conditions and circumstances formerly specified in it.
How a smart contract works
So the smart contract is one of the primary features when you create a NFT marketplace, and is worth paying special attention.
How to create NFT marketplace: technology stack
So, to build a NFT marketplace, first, you should consult with your software provider to pick a blockchain platform. The following options are currently in use:
- Ethereum — is hugely widespread among NFT marketplaces, mainly because of its stability and visible transaction history.
- Flow — a new faster generation of blockchain widely used for creating the NFT marketplace and the tokens.
- Tezos — an open-source blockchain platform that lets you create marketplaces and assets for sale.
- Cardano — a blockchain platform that is exceptionally secure and resilient due to the most delinquent technologies and tools.
Storage platforms are another important technical component. To make NFT marketplace, you can employ the following options:
- IPFS — a peer-to-peer hypermedia protocol that can store media content in a decentralized manner.
- Filecoin — a decentralized storage network created to keep any important information, including media files.
- Pinata — another popular platform for uploading and managing files in IPFS.
For NFT marketplaces frontend development, React, Angular, and Vue are most often used.
Find out how to hire a frontend developer.
Non-Fungible Token Standard
The choice of standards, which we talked about earlier, is also very important. Here's what you can use:
ERC721. The very first and classic standard for an NFT token on Ethereum. Each token has its smart contract and a unique ID. As well as complete uniqueness, the standard also ensures the flexibility of transferring NFTs between accounts and the ease of determining the owner of an asset.
ERC1155. This standard is much more efficient than the forenamed one. It allows the opportunity of batch transfers - it can cover several assets with one smart contract, thereby ensuring their transfer with limited network load and lower transaction costs. It also has a "secure transfer" feature that allows you to cancel the transaction in case of an error.
BEP. This is the standard for publishing tokens on the Binance Chain protocol, which is approved in this well-known ecosystem. Tokens of this standard function interact with each other, similar to tokens on the Ethereum network. BEP-2 support was implemented on the Binance DeX exchange deployed on the Binance Chain.
Your software vendor will tell you what to choose for your particular platform. In general, in the case of NFTs, competent expertise is especially important: this is a rather unexplored "land", and it is worth choosing a company that has already worked with NFTs in practice.
The Basic Pipeline of NFT Marketplace Development
If you are wondering how to develop NFT marketplace, you should understand the basic creation process. It happens in several steps, and we will consider each of them.
Stage 1. Discovery. So you've chosen your software developer. Then, in the first stage, with the development team, you define precise requirements for the future outcome, including design, functionality, technology stack, and monetization model.
Stage 2. UI/UX Design. To create an NFT marketplace website, you also need to pay a lot of attention to UI / UX design. Designers will help you make the perfect interface that will meet all requirements.
Here is how UI/UX design is created in more detail.
Stage 3. Development process. At this stage, the developers do their job and create a working NFT marketplace. The process includes frontend and backend development using the selected technical stack.
Stage 4. Quality Assurance. Each stage of development is necessarily accompanied by a lot of tests, both manual and automatic. This allows you to identify and fix all possible bugs and shortcomings so that everything works perfectly by the time of release.
Stage 5. Product release. After all, the tests are finished, you can look at the resulting product again to ensure that you are happy with everything and do not want to add something extra. Then, the NFT marketplace is entirely ready to be launched to a broad audience.
Stage 6. Maintenance. The field of NFT and decentralized finance is now actively developing. Therefore, after the product has already been launched, it is vital to continue its technical support and update it in time to stay ahead of the competition.
So, you have learned the main attributes of how to build NFT marketplace. Next, let's look at an example of their application in practice.
How to Make an NFT Marketplace: Cleveroad's Experience
Cleveroad is a professional software development company founded over 10 years ago. Our head office is located in Northern Europe, Estonia. We have launched more than 170 successful projects in various areas, e.g., FinTech. Cleveroad team comprises over 120 professional software engineers with significant background in the mobile and web development, including media industry and DeFi.
We will present how we created the NFT marketplace on the example of a solution we’ve made for Cere Network.
An American company from San Francisco, California, set the task for Cleveroad. The main area of activity of the client is high-tech B2C services, in particular decentralized data and finance (DeFi). The NFT platform should allow Cere to expand its area of presence and therefore the customer turned to us to make him a separate marketplace for trading these assets.
The project aimed to develop a platform that allows our customer to increase the number of Cere products, attract users from new niches, and let them enjoy the NFT auction's advantages. In addition, the platform was supposed to be connected with other Cere web solutions, such as a media converter and a tool for creating and exchanging NFTs, as well as increasing capitalization using a monetization model based on digital payments.
To solve this task, our developers created a web platform that could unite the target audience with the help of a video-on-demand solution. In addition, the newly designed NFT marketplace was integrated with Cere Network's decentralized data cloud (DDC) and Freeport CRM (solution for NFT merchants). Finally, our client also needed to implement a payment gateway to support payments with both fiat currencies and cryptocurrency, so we integrated it.
For NFT marketplace creation, we used the following technology stack: Kotlin for backend development, React for frontend development, Solidity for smart contract development.
As a result, the client received:
- Innovative platform allowing operations with NFT media assets
- Development of direct relationships between content producers and consumers
- Full interaction with the existing DDC Platform
- Revenue stream from the new monetization model
Let's take a closer look at how we've created the NFT platform. After the Discovery stage, the work was continued within the framework of the Dedicated Team model. The marketplace contained all the basic features mentioned before and included integration with Cere Freeport. This NFT creation kit also delivers NFTs with encrypted objects to the user's wallet.
Let's focus on such an important detail of the project as the NFT Marketplace. It allows you to conveniently view all current asset offers and make purchases quickly and safely.
Cere Network NFT marketplace
And most importantly, the monetization model that the client chose, which was able to get the maximum benefit from the developed platform, was integrated into the solution.
What other advantages did the client get by choosing Cleveroad?
- Qualified team of professionals with different skills
- Product quality control at all stages of development
- Post-release project support and implementation of any additional updates
- Rapid response to project changes
- Modern technical stack and innovative approach to task solving
The NFT marketplace today is a great way to expand an existing business or open a new one. The industry is actively developing, causing more and more interest among users. Build your NFT marketplace to beat the competition and make blockchain work for you.
The NFT Marketplace is a dedicated trading platform explicitly designed for non-fungible tokens. It gives the ability to buy, sell and store NFTs.
Step 1. Determine the niche in which you will be creating the NFT marketplace.
Step 2. Choose an NFT marketplace developer company.
Step 3. Together with designers, define UI/UX design for the future platform.
Step 4. Monitor the creation of the NFT marketplace at the stage of frontend and backend development.
Step 5. After all the technical tests, get ready to launch your NFT marketplace.
Step 6. Enjoy your own NFT marketplace.
To build NFT marketplace, you may use one of the following blockchain platforms: Ethereum, Flow, Tezos, or Cardano.
Evgeniy Altynpara is a CTO and member of the Forbes Councils’ community of tech professionals. He is an expert in software development and technological entrepreneurship and has 10+years of experience in digital transformation consulting in Healthcare, FinTech, Supply Chain and Logistics
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