- 1 Key Takeaway
- 2 Introduction
- 3 What Do a Streaming Service and an NFT Marketplace Have in Common?
- 4 Why Build an NFT Marketplace?
- 5 Understanding the Type of NFT Marketplace You Wish to Build
- 6 Factors to Consider When You Want to Create an NFT Marketplace
- 7 Tech Stack to Develop an NFT Marketplace
- 8 The Rest of It
NFT marketplace development encompasses UI/UX, marketing, functionality (frontend and backend), and market positioning. There are many marketplaces today; some, like OpenSea, cater to a vast audience, and others, like DressX, cater to niches. You must understand your market position, your USP, and the proposed NFT marketplace functionality to carve a place in the presently-dwindling NFT market. Let’s explore how to create an NFT marketplace.
NFTs, also known as Non-fungible tokens, are unique assets that are recorded on a blockchain. The blockchain record is proof of ownership of an NFT. An NFT can be music, art, or even a digital currency. Whatever it is, the bottom line is that you cannot duplicate an NFT.
With the popularity of NFTs, NFT marketplaces became commonplaces for individuals and businesses looking to buy and sell non-fungible tokens. An NFT marketplace, like marketplaces like eBay and Amazon, acts as the middleman between buyers and sellers and, oftentimes, as the credibility statements buyers need before they can purchase an asset from the seller.
What Do a Streaming Service and an NFT Marketplace Have in Common?
A streaming service and an NFT (Non-Fungible Token) marketplace share certain similarities despite operating in different domains. Here are a few commonalities:
Both platforms deal with digital content. A streaming service provides access to streaming audio or video content, such as movies, TV shows, music, or podcasts. On the other hand, an NFT marketplace facilitates the buying, selling, and trading of unique digital assets, which can include artwork, collectibles, music, videos, and more.
Both platforms revolve around the concept of digital ownership. With a streaming service, users typically pay for a subscription or rental to access and stream the content temporarily. In contrast, an NFT marketplace allows users to purchase ownership rights to unique digital assets through the use of blockchain technology, granting them proof of ownership and authenticity.
Both services act as intermediaries between creators and consumers. A streaming service connects content creators (such as musicians, filmmakers, or podcasters) with audiences, providing a platform for distribution. Similarly, an NFT marketplace connects digital artists, collectors, and enthusiasts, enabling creators to monetize and sell their digital assets to interested buyers directly.
Both platforms offer opportunities for content creators to monetize their work digitally. In the case of a streaming service, creators earn royalties or licensing fees based on the number of streams or views their content receives. In an NFT marketplace, artists can sell their digital creations directly to collectors, with the potential for increased revenue through resales if the NFT gains value over time.
Both platforms offer digital accessibility, allowing users to access content or assets from anywhere with an internet connection. Streaming services provide on-demand access to a vast library of content, while NFT marketplaces enable users to browse and participate in digital art and collectible markets without geographical limitations.
Despite these similarities, it’s important to note that streaming services and NFT marketplaces differ significantly in their primary focus and underlying technologies. Streaming services primarily focus on providing access to a wide range of content, while NFT marketplaces focus on creating a marketplace for the ownership and trading of unique digital assets.
Why Build an NFT Marketplace?
NFT Marketplaces are money stations and can be wise investments. There are NFTs that have gone on to sell for record millions and tens of millions. There are also NFTs that sell for only a few bucks. Whatever the sales are, platforms like OpenSea, Rarible, Decentraland, and the Sandbox, will continue to turn in a decent net monthly or quarterly income because they are neither buyers nor sellers but proprietary confirmers – that is, they confirm (and in some other cases, do not), the validity of the NFT proprietor. There are many reasons to create your own NFT marketplace.
Understanding the Type of NFT Marketplace You Wish to Build
There are four classes of NFT Marketplaces, non-curated NFT marketplaces, curated NFT marketplaces, mass NFT marketplaces, and niche NFT marketplaces.
A non-curated NFT marketplace: A non-curated NFT marketplace is open to anyone and everyone to buy and sell NFTs. Like mass marketplaces, they accept all users but do not curate or categorize their NFTs. Think about a large physical market, with fish stands, meat stands, kiosks, food stands, and everything else you can find, but highly disorganized. Now think about a mall. The former is the non-curated marketplace.
Mass marketplace: OpenSea is a mass marketplace. It’s one of the most popular marketplaces for NFT enthusiasts.
Curated marketplaces: Like malls, these marketplaces are respected and do not accept just any seller. They verify NFTs for seller credibility and proof of ownership before listing an NFT.
Niche marketplaces: Niche marketplaces exist within niche markets like art, fashion, music, and sports.
You should also consider selling NFT art, NFTs avatars, gaming items, NFT videos, or tickets. Your decision on creating an NFT marketplace should be based on intense market research. Who are your biggest competition in a section of the market? For example, OpenSea and Rarible dominate the NFT avatar market and have facilitated trades of NFT avatar blockbusters like Bored Ape Yacht Club, Cryptopunks, and Cool Cats Collection. Virtual fashion NFT marketplaces are led by DressX, Decentraland, and Digitalax.
Factors to Consider When You Want to Create an NFT Marketplace
Your NFT marketplace may not enjoy wide or global acceptance. It may be a safe bet to start with a niche market, one that has yet to be fully explored and catapult into the general market if an opportunity opens in the future. In business, early market entry is essential. For example, Binance and Coinbase have carved the general cryptocurrency trading and exchange market. Many other CEXs sprung after them, but anyone creating a DEX will spend tons of money on influencer marketing, product development, and advertising.
Before building an app for the open market, you should build a prototype. A prototype serves many purposes:
- It helps you showcase the core functionality of your NFT marketplace without spending a lot on product development.
- It helps you collect feedback on the functionality of your NFT marketplace.
Thinking about how to start an NFT marketplace, observe the prototyping stage of your biggest competitors. What did they do? How did they connect with the market with their prototypes?
An NFT marketplace requires a bundle of talent, from the UI designer to blockchain network developers, the finance and legal department, the fund procurement team, the operations manager, and the marketing team. Beyond the tech stack, it takes deliberate hiring to ensure that your NFT marketplace serves its purpose.
Tech Stack to Develop an NFT Marketplace
To build an NFT marketplace, there are many tech stacks to consider, depending on the functionalities of your marketplace. The obvious tech stacks include Ethereum, Polygon, and Binance Smart Chain.
Ethereum is one of the most robust blockchain for NFTs. It’s also among the most used ecosystems because of its endless access to communities, tools, and smart contract functionalities. With Ethereum, NFT marketplace creators can create, execute, and institute smart contracts to determine transaction protocols.
The Binance Smart Chain began gaining popularity a few years ago because of its relatively low transaction fee and faster transaction time. BSC is compatible with Ethereum, so a BSC developer should be able to work with Ethereum tools and libraries.
Polygon: Polygon offers low transaction fees, scalability, and compatibility with Ethereum.
Your NFT marketplace should be scalable and flexible. With scalability, other developers can quickly build on already written codes to improve or widen the system’s functionality. It’s essential to institute functionalities that can be quickly adopted and adapted to accommodate changes in the future. That is when building your NFT marketplace, your engineers must develop codes and systems that are organized, easily interpretable, and can be easily adapted for more extensive functionalities.
An essential feature of an NFT marketplace is its ability to handle high transactions and fast. Your tech stack should ensure that, should demand suddenly surge, your system is robust enough to handle such transactions without decreased productivity.
Another crucial feature is the security of the marketplace. First, will you be validating ownership claims of NFT listers? How will you protect users’ wallets and NFTs proprietary?
Lastly, your NFT marketplace should flexibly adapt to changing market conditions. As said before, your wallet’s capacity isn’t stretched when you only have to validate a few hundred transactions a day. What happens when they become thousands an hour?
Side note: Thinking about how to make an NFT marketplace? It’s time to start hiring the talents. It takes a bunch of talents to build blockchain technology.
The Rest of It
When you want to create an NFT marketplace, you must determine the functionality of your marketplace. What’s your USP? Why is your marketplace special? Should you create a niche marketplace or not? Understanding the needs of the market and future trends will guide you into entering unsaturated parts of an oversaturated market.