How to Develop NFT Marketplace? - NFT Marketplace Development

Since cryptocurrencies made headlines for touting themselves as replacements for the existing financial systems, blockchain developers have been looking for ways to expand the applications of the technology further. Then, during the late 2010s, came the Crypto Kitties – The first non-fungible tokens. Since then, many digital tokens have been created and sold for massive prices. Many creators, particularly digital artists, have benefited massively from selling their works as NFTs, and in some cases, they even get royalties with every resale. Although most people are apprehensive about how NFTs go, some people have a point in saying that if incorporated in more complex real-world applications, NFTs might become revolutionary items. In this blog, we will see everything about a marketplace that sells these tokens.

NFT Marketplace – An Introduction

An NFT marketplace is an online platform that sells non-fungible tokens. The user-end of the website might look like any other online trading platform, but the technology behind it is completely different. An NFT marketplace can sell all kinds of NFT products or only specific products. NFT items sold on the marketplace portals include digital/physical artworks, video clips, music, in-game assets, digital player trading cards, and some physical items. Major open NFT marketplaces include OpenSea, SuperRare, Rarible, and Solsea. Some special marketplaces selling NFT items include Sorare, in-game marketplaces in Sandbox, and Splinterlands.

General Working Flow of an NFT Marketplace

• New users sign up and create an account on the marketplace portal, after which they should connect their account to their crypto wallet or load cryptocurrency into the in-portal wallet.
• If the user is a creator, then they mint their NFTs and group them as collections. They can also opt for the cryptocurrency that they would like to accept payments.
• The creator should also decide the kind of sale for their NFT items. It can whether be an auction or a fixed-price sale. After listing the item, a smart contract is created, which would record every transaction that the NFT undergoes.
• Once moderation is done by the marketplace administrator, the sale starts on the platform, and prospective buyers can begin placing bids.
• Once the seller accepts a bid or the bidding deadline is reached, the sale would be completed by transferring the NFT product to the highest bidder. The marketplace platform gets a percentage as a transaction fee to maintain the portal software in this process.

Some Details That Should Not be Forgotten

• There are multiple token standards that the NFT assets can be a part of, which differ for different blockchains. Ethereum has ERC-20, ERC-721, and ERC-1155, Binance has BEP-20 and BEP-721, and so on.
• Each standard has its own features. For instance, the ERC-721 standard requires creation of individual smart contracts even if all those NFTs are the same. In comparison, the ERC-1155 standard needs only the main asset details and the number of tokens to be generated. This can be beneficial for gaming NFT asset developers as they need to create an NFT for a gaming property and mention the total number of assets available in the marketplace platform.
• Metadata is a vital requirement for NFT selling marketplace businesses. This is because marketplace software cannot understand blockchain entries which consist of random letters and numbers. A description of the NFT item with images and relevant text can be given as metadata to make the software understand the unique attributes of the tokenized NFT product.
• NFT marketplace owners face one big problem on the legal end as NFTs are still largely unregulated, and regulatory changes are fast. Framing clear policies is important as clarity means issues are out of context. The business entrepreneur needs to be well aware while building the legal documentation for the marketplace portal that includes policies on company formation, terms of service, community standards, IP details, and privacy policy.

How Much Would It Cost to Develop an NFT Marketplace?

The expenses involved in developing an NFT marketplace software depend on its owner's requirements. One would like to have a marketplace made from scratch, while someone might be comfortable using a Whitelabel solution that can be customized to fit some features. As the customization requirements increase, so does the platform's cost. Also, the expenses increase when additional features such as creating the facility to mint NFT tokens, enable live auctions, and support wider payment features.

How Does an NFT Marketplace Earn Profits?

• Marketplaces collect a listing fee from creators every time they list their NFTs in the portal.
• Platforms collect transaction charges during the successful sale of every NFT product.
• Some portals collect a fee from creators for setting up NFT collections initially.
• If a seller opts for a private sale, an additional fee is collected as the process needs a special setup.
• Sometimes, marketplaces collect a fee for selling multiple individual NFTs through a single auction as such a sale is a special case.
• Platforms collect a fee to mint the NFT tokens, which involves creating a product's blockchain entry.
• Sometimes, bidding charges are collected when a prospective buyer bids on an NFT during an auction.
• Some marketplaces earn money by sharing specific statistical records on their platform to third-party partners.

Wrapping Up

If you are a person who is looking forward to utilizing the current NFT wave but not a creator, then supporting such creators is a great way to involve yourself in the domain. It can be done by owning an NFT marketplace, which with some special features, could garner global attention. You could ultimately earn a lot without creating artwork or buying an NFT and speculating.