A Comprehensive Guide to NFT Marketplace Development
A non-fungible token is denoted by the acronym NFT, which stands for non-fungible token. This particular kind of cryptocurrency asset is unique and cannot be traded for another item of equivalent value. For example, Bitcoin can be sold and then bought again and the account will still have the same 1 BTC, but if you have a unique picture, you will not be able to find something comparable to replace it.
Non-fungible tokens are used for everything from artwork and collectables to gaming items and website domains. Since they are stored on the blockchain, they are secure and transparent. We wrote about why the blockchain is so reliable in our article “Can the blockchain be hacked: Understanding the vulnerabilities of the most reliable digital technology.”
What role do NFTs play in the digital world, and are they worth investing in? Some consider them to be a fad, while others believe that NFTs are here to stay and will play an important role in the future digital economy because:
They allow you to own digital assets in a verifiable and secure way.
They offer authors a new and innovative way to monetize their work.
The way we engage with digital material could be altered by non-fungible tokens. For example, we may use them to create unique experiences or reward people for their contributions to the online community.
If this is enough for you to decide to create your own NFT marketplace, let's move on to looking at the components that you will need for this.
Main types of NFT marketplaces
The first important step in developing an NFT marketplace is to determine the type of platform you want to create. Here's a quick rundown of the most typical kinds.
Universal NFT Marketplaces
This type is the most popular because it allows you to buy, sell, or trade any type of NFT, from artwork to in-game items to website domains. Universal platforms allow collectors to find the digital assets they love without being tied to a specific category, style or genre.
Examples:
OpenSea; Magic Eden; Mintable.
Exclusive NFT Marketplaces
Exclusive marketplaces typically have a curated selection of NFTs. Most often, these are rare art collections, where digital objects exist in a single copy or in limited quantities and are of great value to collectors.
Examples:
SuperRare; Foundation; Nifty Gateway.
Specific NFT Niche Markets
Niche marketplaces target specific industry segments. For example, this could be a marketplace for art NFTs, gaming items, sports collectables, or a blockchain data marketplace. The main reason for their popularity is the ease of searching for a specific type of NFT.
Examples:
NBA Top Shot; Axie Infinity; Coachella.
How do NFT marketplaces work?
In terms of interaction between users, many decentralized online marketplaces function similarly to traditional NFT Marketplaces such as Amazon or eBay. In both cases, sellers list items for sale, and other users view those offers and buy the items they want.
However, there are several significant differences between a regular electronic trading platform and its blockchain counterpart. What are they?
Decentralized blockchain technology
NFT platforms use blockchain technology because it allows for secure and transparent market transactions. When someone buys or sells a non-fungible token, the transaction is recorded on the blockchain. This public record can be verified by any user, making NFT trading fraud impossible.
The top 7 blockchains for creating marketplaces include:
Ethereum;
Polygon;
Solana;
BNB Chain;
Cardano;
flow;
TRON.
Smart contracts
Smart contracts are used to carry out transactions on blockchain markets. A smart contract is a digital agreement recorded on a blockchain network that allows the transfer of tokens between parties. Once the buyer and seller agree to the terms of the transaction, they can use a smart contract to carry it out.
These computer protocols automate the transaction process and help ensure that both parties keep their end of the agreement. They also serve to protect buyers and sellers from fraud by verifying the authenticity of the NFTs being traded.
Popular standards include:
ERC-721;
ERC-1155;
BEP-721;
BEP-1155.
NFT wallet
This is where users can store their NFTs after purchase. A digital wallet is also necessary for selling tokens, as it is typically used to transfer ownership of an NFT from one person to another.
NFT Metadata
This is data that describes the NFT, such as the name, date and time of creation, image and other relevant information. They are valuable for two reasons: first, they help potential buyers understand what they are buying, and second, they allow marketplaces to properly categorize and curate their collections.
Storage System
Storing token metadata requires reliable and decentralized storage. Popular methods include the following:
IPFS (InterPlanetary File System);
SQL databases;
JSON files.
How to Develop an NFT Marketplace:
The process of developing an NFT marketplace isn't quick or easy, but it is doable with proper planning, execution, and a qualified team of blockchain developers. In this guide, we'll look at the four main steps to developing a modern online marketplace using blockchain technology.
Analysis and planning
Main goal: Determine the architecture and functional requirements for the product being developed.
It is also called a preliminary study. At this stage, it is important to analyse the project, its goals, target audience and plan the necessary technical architecture. The result of this process should be a precise timeline for product development from start to finish.
Main stages:
Determine the target audience, use cases and user journey;
Identify key functionality;
Definition of technical structure;
Analyze market API shortcomings;
Decide on the required technical stack;
Creation of a high-level architectural plan;
Creation of UI/UX design concept.
Read about how fintech UX/UI web design is developing now and what to expect in the future in our large material.
