In 2021, a digital art piece titled “Beeple’s “Everydays: the First 5000 Days” was sold for 69 mn USD via an NFT marketplace and the NFT world was never the same again!
The NFT sales volume reached sky-high limits and sat well above 10 bn USD by the end of 2021. Being non-fungible tokens – the tokens that are unique, non-exchangeable, and non-replaceable, NFTs are the right investment units for beginners who are looking for investing in collectibles, art, and digital assets. However, the options are not limited to these three categories only.
NFTs allow the people working in art, such as artists, brands, and companies to ensure and prove the originality and authenticity of any art piece they create.
But what makes NFT marketplace development a profitable business concept and how to make sure that you get the best value out of your investment?
What are some of the pitfalls that you must keep in your mind and what are the various benefits of NFT development?
In the following post, we explore the answers to all these and many other questions and discuss the topic at length.
Let us begin with the definition of NFT token.
What Is a Non-Fungible Token (NFT)?
NFT tokens are one of the latest developments in the segment of the digital economy and can be understood as a digital file with unique identifiers. As the digital file is unique, it cannot be replaced with another one of its kind.
For example, if you have one bitcoin, then you can exchange it with another person holding a bitcoin without affecting the value of the coin. This is because all the bitcoins are alike.
NFTs, on the other hand, are irreplaceable and unidentical.
This makes it impossible to create their counterfeits or copies to scam someone.
Any digital file can become a non-fungible token, and the owner can be sure of its authenticity at all times, even when they wish to sell them for any reason.
NFTs or digital files can be tracked by using blockchain technology that is also the enabling technology for cryptocurrencies, such as Bitcoin, Ethereum, etc.
Using the smart contracts the owners can assert rightful ownership over the NFTs and the buyers can confirm that the piece being bought is original.
Now that we understand the definition of a non-fungible token, let us move on to the NFT marketplaces.
What Is NFT Marketplace Development?
NFT marketplaces are used for selling and buying these digital files via cryptocurrency. You can make the purchase just like any other marketplace. However, you have to pay some processing fee for each transaction.
NFT developers are creating numerous markets for selling and buying digital files or NFTs in various categories, such as digital artwork, media, photos, clips, tokens, games, tweets, licenses, domains, music, etc. While you might opt for creating a marketplace for only a specific few categories, there are many companies that offer all the possible categories to widen their audiences.
You can either opt for NFT marketplace development from scratch or opt for a White Label NFT marketplace. While the NFT marketplace development cost for development from scratch is high, White Label NFT marketplace just requires customization and is more affordable.
Some common blockchain networks that are used for developing NFT markets are:
- Binance Smart Chain
How Does NFT Marketplace Work?
NFT marketplaces work just like the regular online marketplaces where you can buy and sell things of your interest. Functionalities and features of NFT marketplaces resemble those of online marketplaces and allow the sellers to display and manage the files for selling them.
These marketplaces use blockchain technology for facilitating these services in a secure and transparent manner.
Below, we discuss the working of an NFT marketplace in a step-wise manner.
1. Digital Wallets for Cryptocurrency
If you wish to use the NFT marketplace, you need crypto wallets, such as MetaMask that sit in your browser and help you initiate a secure NFT transaction for purchase or sale. You can add cryptocurrency to your wallets anytime you want for making a purchase. To enjoy a wider client base, you must work with different popular crypto wallets, such as WalletConnect, or MyEtherWallet.
2. Sales and Auctions
As it happens on the other online marketplaces, the sellers list their items online on the NFT marketplace and mention the fixed price for each one of them. The sellers can also put these items on auctions and set a starting bidding price as well.
3. Smart Contracts
As the underlying tech for NFT marketplaces is blockchain technology, the terms and conditions between a seller and a buyer are mediated via smart contracts. These smart contracts are self-executing digital contracts that are h stored over the blockchain network. The buyer has to agree to these terms and once it is done, the contract is validated and becomes irreversible.
Thus, the NFT marketplaces are highly transparent, secure, and favorable to both sellers and buyers.
Apart from the item cost, the buyers have to meet the transaction and energy costs of facilitating the NFT transaction on the marketplace. Also, the buyer has to make the payment in the currency mentioned by the seller, if indicated otherwise. This would also require the conversion of cryptocurrencies and might come with an extra processing fee.
This is how an NFT marketplace works.
A visual overview of these and other processes involved is shown in the following image:
Next, we discuss some key features of an NFT marketplace so as to help you understand how to plan your NFT marketplace development keeping the overall user experience and revenue in mind.
Key Features of NFT Marketplace
Like every online marketplace, the NFT marketplaces also need to deliver effortless and hassle-free customer services for ensuring better revenue and popularity. Hence, you have to focus on user experience for all the parties involved (seller and buyer), the number of services, comprehensive service portfolios, diverse functionalities, and a highly intuitive compilation of the entire marketplace for maximizing your reach.
Below, we share some key considerations in this regard.
Having an excellent storefront and engaging product displays will not only appeal to the buyers but also persuade the sellers to choose your marketplace for selling their collectibles and creatives.
Always opt for a neat, sophisticated, and organized look that is intuitive and comes with a little or no learning curve. You must finalize the design elements such that the users don’t have to spend time “finding the right option” when their main aim is to buy or sell on your marketplace.
Finally, keep the quick links, storefronts for sales as well as auctions in mind while designing and developing your NFT marketplace.
2. Search Function
Having some smart and advanced search buttons with auto-suggestions for products and categories will allow your customers to find the items of their interest in a rapid manner. With proper category suggestions, you can further enhance the search preciseness and improve the scope of search results.
These features make your marketplace more engaging and more aligned to your customers and visitors, as they find the search process less complex.
Adding filters not only helps in refining the search but also makes it easier for the customers to complete the task they have in their minds. For example, suppose you have an NFT marketplace that sells music and digital art and Robbie visits your store to purchase a specific music video. Now, if you have smart filters with exhaustive filtering criteria, Robbie can easily choose them to make the process quick.
This becomes especially important if the item he is looking for is on an auction and he wishes to join earlier.
Filters make your marketplace effortless and personalized for different customers without much ado. So, opt for exhaustive filter options to provide a highly optimized customer experience.
It is important to make the listing of products easy, effortless, and optimized with smart navigation elements. This is crucial for providing impeccable UI and will also have a big say in the number of audiences you get to have.
To enhance the quality of user experience further, you can add guides, informational write-ups, and bite-sized instructions for the users.
5. Buying and Auctions
There are two ways to sell NFTs – regular buying done at fixed prices, and auctions.
While the NFT marketplace development for regular selling processes is easier, the offering auction feature is complex. However, when you offer both the functionalities to the users, you not only widen your audiences but also make the platform more engaging for the sellers and buyers operating in the rare collectibles, antiques, and limited edition niches.
While fixed-price selling is easy to manage and comes without real-time bidding modules, auctions are highly complex and require highly precise development efforts for facilitating fair and bias-free sales and purchases.
All the users are required to use crypto wallets for using the NFT marketplaces, as discussed above and in order to cater to a wide range of users, we recommend accepting as many popular wallets as possible.
However, you must know that these associations come with processing fees and you have to pay them. Further, you might also be required to be compliant with certain regulations or certificates to use some of these crypto wallets.
Ratings, reviews, and feedback are of extreme importance for every marketplace as almost 9 out of 10 customers (89%) check the reviews and feedback before making a purchase.
The buyers can check them for measuring the credibility of different sellers on the NFT marketplace and can make a better purchase decision.
Ratings and reviews also allow you to monitor the seller activity and offerings’ quality with more alacrity and weed out the scammers from your marketplace aggressively.
8. Bidding Options
To make auctions more engaging and comprehensive, you can also offer multiple bidding options and functionalities. Some common examples include sealed bids, online bids, and auction bids.
Benefits of Creating NFT Marketplace
NFTs are becoming more and more popular these days, and the strength of security, transparency, authentication model and ease of processing are some of the core drivers behind this popularity. Further, more and more people are looking for investing in a democratized economy that comes with less hassle and constraints than traditional investment systems, and NFT marketplaces are leading the charts in the genre.
Apart from the ones mentioned above, we are sharing some other benefits of NFT marketplace development below.
1. Access to a Variety of Incredible Assets
Many NFT marketplaces like Rarible helps creators and artists to list their creations online and get a wide range of buyer audiences for them. Investors can browse, buy, resell and use these items for various purposes, such as creative projects, large-scale use, or personal collections.
Now, what makes NFT marketplaces so awesome is the fact that you can create an NFT of anything, such as rare posters, video clips, tweets, memes, code, puzzles, recordings, autographs, etc.
Collectors, rare artifacts investors, and art enthusiasts can find a number of things that appeal to their interests and business requirements under one roof. Apart from collectors and art enthusiasts, there are many professionals that require unique and curios essentials for their work, such as decor, design, landscaping, and aesthetics designing.
Hence, an NFT marketplace has a huge audience, even the ones that you might not know about initially.
2. Diverse Development Use Cases
If you are a person with eyes on futuristic development, such as platforms that use the most cutting-edge tech and innovations to facilitate next-gen services, then NFT marketplaces are just the right first step.
NFT marketplaces touch and weave together a number of industries, such as finance, fintech, cryptocurrency, digital tokens, crypto wallets, rare and unique offerings, extremely reliable, robust, and fool-proof security and authentication models, etc.
So, with an unlimited number of business use cases available for exploration, you can always innovate keeping the future in mind.
3. Liquidity Mining
Liquidity mining refers to the process, whereby the crypto tokens are sent to a person’s digital wallet for VIP or premium service facilitation. A good example is Rarible, where RARI tokens are sent to sellers and buyers. The users can earn more of these tokens by continually participating in the NFT marketplaces.
These tokens can be used to view rare items, cast votes, participate in auctions and even submit new ideas on the marketplace. These tokens can also be sold on third-party cryptocurrency exchanges to make some cash.
These options make NFT marketplaces better, more engaging, and extremely user-oriented while ensuring a wide range of audiences.
4. Hybrid Blockchain Implementation
You can experiment with blockchain technology across your NFT marketplace to facilitate a diverse set of features and functionalities and cater to a wide range of business use cases.
You can work with hybrid blockchains and multiple blockchains, or also use blockchain technology for testing any new use cases in your business model.
Hence, NFT marketplaces allow you to innovate and research in the blockchain segment as well.
5. More Transparency, Less Hassle
The common marketplaces have a complex transaction management system, because of the well-established financial ecosystem. As an online marketplace owner, you have to be compliant with certain government regulations and taxation rules as well.
All these constraints are currently limited in number in the cryptocurrency domain. However, this doesn’t mean that there is no way to facilitate secure transactions.
As NFT marketplaces are based on blockchain technology, all the transactions are safe, secure, and highly transparent.
Hence, you can own an online marketplace that is innovative, modern, digital, extremely user-oriented, and secure but comes without the complications of a traditional online marketplace.
6. Making an Early Entry
As it happens with every technology and business advancement, the NFT marketplace and blockchain-based businesses will get saturated in due time. However, there is still time in it, and this time also allows you to have a window for experimenting and testing various business approaches.
This means that making an early entry on the scene will offer a number of advantages, such as:
- Establishing yourself in the industry by perfecting your business offerings over the years
- Garnering the best of customer audiences with limited effort in a less-competitive business market
- Perfecting your use of blockchains and business offerings
- Making the most of an opportunity while you still can
7. Easy Development and Deployment
As the NFT marketplace development is still in its nascent stages, and most of the development, such as White Label NFT marketplace development is customization only, you can easily develop and deploy them.
All you have to do is find the right expertise for NFT development and blockchain consulting to get started and you are all set with your marketplace that is unique, easily manageable, and entirely transparent.
How to Develop an NFT Marketplace?
As discussed in the earlier sections, NFT development can be done in two ways:
- NFT development from scratch
The NFT marketplace is developed from scratch and all the features and functional modules are developed entirely afresh. You can ask for specific features, platforms, functionalities, services, and integrations in such type of development.
As the development process is time and effort-consuming, the NFT marketplace development cost is high in this case.
- White Label NFT marketplace development
This type of development is actually customizing and your marketplace stems from an aggregated framework, such as Stellar, Ethereum, Tron, etc. You can get the development done in lesser time and the cost of development is lower as well.
Next, we share a step-by-step discussion of NFT marketplace development that you can read for a better understanding.
Step 1: Know Your Audience
Begin with identifying your target audience and discovering their expectations from an NFT marketplace.
Some key considerations for this step include:
- What type of items or NFTs do you wish to sell and host on your marketplace?
- Are you opting for a national or international audience?
- Which wallets, facilities, and types of NFT trading are you planning to offer?
If you are catering to artists and creators only, then what services, features, and information flow must be there in your marketplace?
Having such a clear understanding of your business model, target audience and service offerings will facilitate in optimized development and rendering of personalized services to your customers.
Step 2: Propose User Roles
Once you have the basic concept for your NFT marketplace, you have to think about the various user roles that it should offer. For example, what kind of actions all the marketplace users can take and how to facilitate these actions.
Having such a granular understanding of the overall website activities and task flow will pave the way towards highly targeted NFT development. Further, you will be able to convey your requirements to the developers in a better manner and the scoping also becomes accurate.
Step 3: Define Project and UI Development
Next comes project documentation and UI design. The developers will work on the entire project wireframe and create a detailed project development document for you. The UI design and functionality elements are also discussed and the overall browsing and information flow are reported to you.
Step 4: Choose a Suitable Blockchain Model
There are many types of blockchain development platforms and all of them offer different functionalities and usability across different business use cases. Before the developer starts working on your project, you also need to discuss the relevance of the various blockchain development platforms for your NFT development.
Expert developers will not only help you choose the right platform but will also help you understand why it is the best choice.
Step 5: Storage
Deciding on the right type of storage of your NFT marketplace data is one of the most crucial decisions. Some common options are cloud, third-party server, and on-premise data storage.
All of them have their respective pros and cons, and you should finalize one of them after consulting with the developer.
While choosing storage for your data, we recommend keeping some things in mind, such as:
- Expansion of business data
- Data security
- Data management
- Data Analytics use cases
- Type and level of services you wish to offer
Step 6: Integrating Digital Wallet
Study and discuss the most popular digital wallet options for crypto transactions with your developer. Understand how they work and compare the transaction fees they ask for.
While you must aim for incorporating as many popular crypto wallets as possible, you must consider the budget constraints that you have.
The target audience you have in your mind also plays an important role in deciding the wallets you should adopt into your NFT marketplace.
Step 7: Selecting Base Token
Next, you must finalize the base token. Token generation is a critical process for running an NFT marketplace. Blockchain consultants can help you choose the right token and token generation process.
Step 8: Beta Testing
Once the NFT marketplace is ready, it enters the beta testing phase in which the marketplace is put into action, and end-users test its functionalities. The end-users use the marketplace with dummy tokens and dummy listings.
The results and performance of the NFT marketplace are analyzed and the different result values are compared to the target or expected values.
If any bugs or dangling operations are there, they are taken care of and the development is moved to the final stages.
Step 9: Deploy & Launch
The last step in the NFT development is deployment and launching. The marketplace is handed over to you and the developer creates user information modules or management training guides if requested.
Finally, the project is handed over to the client entirely and enters the maintenance phase.
Top NFT Marketplace Examples
This NFT marketplace is leading the industry currently and operates via trading cards, sports, pieces of art, etc. The platform has numerous original and rare assets, even decentralized names.
Trading card games and collectibles are hugely popular among the users of OpenSea and they can also build personal goods there.
SuperRare is yet another commendable NFT marketplace example that is well-known for its singular innovations in the segment of digital crypto art. What makes this marketplace one of the best options in the market, is the fact that not everyone can sell here.
Only the authors who have proven themselves with distinguished art pieces and creatives are allowed to join the marketplace and sell their creations. Also, the verification and sign-up process are challenging. Exchanges are facilitated via Ethereum.
Rarible is another one of the leading NFT marketplaces where the entire community owns the services, and token exchange is extremely easy. The active members can earn the local token called RARI for quick NFT transactions.
This is one of the best marketplaces for creative people that engage in multiple types of sharing, such as tokens, images, tracks, cards, etc. You can also find metaverses components here.
AtomicHub utilizes Wax Blockchain and is one of the best NFT markets for digital art. The trading is done via the local Wax coin or token and the registered users can trade with 25-cent values. Creating an NFT collection over here is extremely easy and users can choose a common theme for the collectibles.
Cost of Creating an NFT Marketplace
NFT marketplace development cost varies from project to project and depends upon the functionalities, technology stack, and features you wish to have in it. Integrations, underlying blockchain platforms, and API integrations also have a major say in the overall cost of NFT marketplace development.
Finally, the project complexity, number of panels required for different roles, and duration of project development also matter when it comes to development costs.
Below, we have offered a tabulated representation of various development costs to give you an overall idea.
|Admin Panel||$3000 – $10,000|
|Author Panel||$5000 – $14000|
|Authorization and Security||$3000 – $8000|
|Buyer Panel||$3000 – $7000|
|Ethereum Incorporation||$4000 – $11,500|
|Home Page||$3500– $10,000|
|Inventory Management||$2000 – $5000|
|NFT management||$4000 – $11,500|
|Notifications||$2000 – $4000|
|Payments||$2000 – $5000|
|Product Page||$2000 – $5000|
|Reviews & Ratings||$2500 – $5500|
|Search and Filters||$4000 – $11,500|
|Shopping Cart||$2500 – $5500|
|UX/UI Development||$2200 – $5000|
|Total NFT marketplace development cost: Anywhere in between||$45,000– $125,500|
NFT Marketplace Development: Right Expertise for Right Development and Best Results
While every NFT marketplace development idea is great, not all of them convert profitably or get developed properly.
The best development results stem from three Rs:
- Right Plan
- Right Expertise
- Right Partners
At Parangat, we offer the best blockchain consulting, development NFT marketplace development, apart from many other developments and consulting services in our portfolio. We have an excellent team of brilliant professionals who are adept in all the latest blockchain platforms and other innovative technologies.
Hence, we facilitate all the three Rs – right plan, the right expertise, and right partners, irrespective of the size and scale of your business.
For more information and to get started with your NFT marketplace development, please book a consultation with our experts today!