The popularity of digital marketplaces for various types of products is increasing day by day. Especially when there is a sudden turnaround in the fortunes of the NFTs, then it makes sense for the NFT marketplaces to be involved. Probably the most talked about topic in the cryptosphere, the NFT Marketplaces will be the place where the general public can get a chance to interact with the creators of content. These are the entities that are responsible for facilitating the trading of the NFTs. To be honest, every content creator has a chance to become a prominent marketman just by participating in the NFT Marketplaces.
In this article, we will talk about the various steps involved in creating a NFT marketplace. We will also cover the cost of building it.
What is an NFT Marketplace?
Non-fungible token marketplaces are Web3 applications that allow people to buy and sell various types of NFTs. There are various kinds of marketplaces that are open to the public, such as those that allow people with crypto wallets to buy and sell their own NFTs. However, there are also marketplaces that are not open to the public and only allow certain companies and brands to sell their NFTs.
With a NFT marketplace, people can easily create an account and sell their digital artworks. Usually, niche marketplaces are more in demand than standard ones due to their specialized features and their ability to sell various types of art.
How does the NFT Marketplace work?
The users of an NFT marketplace must first install a digital wallet to operate. This app stores the data of the owner's files on the blockchain, which is different from the data stored on a disk drive. In addition, it allows users to create collections by displaying the work or digital item they want to buy. They can then choose the payment token they want to accept.
After the item has been listed, the transaction will be created following the auction. The creator's wallet then launches a smart contract to spell out the terms of the deal between the buyer and the seller. This deal is then automatically generated and validated by the blockchain network.
The transaction is then irreversible, as various operational costs are involved in a digital transaction. For instance, the energy costs associated with brokering a transaction are usually included in the cost of NFT. As a result, marketplaces that use NFT charge a fee whenever funds are transferred.
Things to know before building the NFT marketplace
Non-Fungible Token standards
The standards that are used to create NFTs are the ones that make sure that the token will behave properly and efficiently. There are currently two standards that are used to create an NFT: the Ethereum Improvement Proposal ERC-721 and the Ethereum Improvement Proposa ERC-1155.
The efficiency of an NFT is also improved by using the "transferFrom" feature, which allows a blockchain to transfer assets from one owner to another.
Non-fungible Token Metadata
The concept of the NFT space is also known as "OwnerOf." This allows users to easily find the owner of the token.
How to create an NFT marketplace?
To build an NFT marketplace, you have to consider several phases of creation. Let's go over each of them.
Phase 1. Discovery
The Discovery phase is the most crucial step in the development of your NFT marketplace. It involves gathering information about your project's technical feasibility and determining its technical viability.
Some questions that are worth answering in this phase:
- What the type of NFT do you want to work?
- How well do you know about it?
- Do you know your audience?
- Who are your competitors?
- How to monetize your platform?
- What token protocol is more preferable for you and why?
- What technology stack do you need?
Before you start working on a project, it's important that you first gather information about the platform structure, roles, front-end and back-end operations. Involving software architects will allow you to get a good idea of the technology's capabilities and how it will be implemented. And a good business analyst has the necessary skills to create comprehensive architecture documentation that will also help you get a good idea of the hosting requirements.
Phase 2. Development
After gathering information about the site's features and user flows, designers and business analysts start working on the wireframe and layouts. The goal is to create a well-designed and accurate representation of the website's user interface.
The development can be conditionally divided into 3 groups of works. They are:
First of all, UX/UI designers are responsible for creating a well-designed and user-friendly interface good with understanding of the various requirements of your target audience and market trends.
When building a NFT marketplace, the back-end development process does not look the same as it would when it was developed on a traditional platform. Since the NFT platform is a decentralized one, most of the data is stored on a blockchain. The development of smart contracts and back-end systems is a huge part of the work that goes into building a successful platform. This includes working on various aspects of the ecosystem such as the marketplace, blockchain, and wallets. The internal structure and interface of the site should be simple, and should not be complex.
The front-end of a NFT platform is the part of the system that handles the interactions between the users and the platform. This is the main task during this phase. The main objective of this phase is to ensure that the platform is easy to manage and reliable.
Phase 3. Testing
During this phase, QA team should also perform various tests to ensure that the code is free of bugs and works exactly as intended. They should also check the content of the pages and perform other tests to ensure that the platform is safe and secure. It is also necessary to check the operation of the NFT marketplace on the staging server
Phase 4. Deployment & Support
Finally, it is the time when the team successfully deploys the NFT marketplace on the production server. But they should then start working on the support services to help the users navigate through the various features of the platform. This step should also include planning for the future development of the platform to meet the needs of the users.
Before talking about the cost of creating an NFT marketplace, it is worth mentioning that it can vary depending on the number of features that you decide to include. Let's talk about some of the most essential features that you need to include when building a successful NFT marketplace.
The must-have features for NFT marketplace:
The Storefront section of the NFT marketplace provides users with a variety of information about the article, such as its details, owner, and bid history. Since NFT platforms are similar to e-commerce sites in terms of their structure, they require an easy-to-use storefront to store all the necessary data. Site administrators should be able to set the number of details that will be displayed for each file. It’s also important to know the provenance of the files, as well as their rarity.
Although an NFT cannot be copied, it can be released multiple times, and the marketplace will label them as "Number 8 of 10," which is the goal of collectors.
The platform should also support category management and search functionality to make it easier for the users to find the various types of products that they're looking for. This will allow the users to easily add their details. It can also be used to filter the listings by price, rarity, and artist.
The ability to create listings is also a key feature that you should include when building an NFT marketplace. It should be focused on the sellers, as it will allow them to easily find and buy various types of art and collectibles. It should also be designed to make the listing process easier, as it will allow them to quickly enter all the necessary details.
Essential features that you should include when building an NFT marketplace is the ability to manage the buying system and auctions. This will allow the users to easily add bids, expiration dates, and a watchlist displaying the details of the bid.
Don’t forget about adding a wallet. Aside from being able to send and receive cryptocurrencies, a wallet will also allow the users to store and manage their NFTs and other digital assets. Your team can either create an in-app wallet or integrate existing ones into the application.
Another feature that should be included when building an NFT marketplace is the ability to send out notifications. A notification system will allow both buyers and sellers to receive notifications when an offer is made. This can be done through e-mails or through push notifications. Aside from this, it can also be used to notify the public about the launch of new non-fungible tokens and the upcoming auctions.
A rating system is also a useful tool for both the buyers and the sellers in the NFT business model. It can help them avoid negative behaviors such as backtracking and false representation. Having a scoring system can also help prevent transactions from going through before the smart contract is implemented.
While the main features of an NFT marketplace are usually related to the creation of NFTs and multi-payment gateway integration, other features such as the ability to merge multiple platforms are also available. These allow entrepreneurs to create their own unique trading platforms.
Due to the wide variety of features and price range of NFTs, it can be hard to determine the right price range for an NFT marketplace. To help, we will tell about average pricing and popular NFT marketplaces.
How much does it cost to create an NFT marketplace?
Cost of establishing an NFT marketplace also depends on multiple factors:
- Number of features included
- Level of customization
- Developers salary
- Tech stack
- Time limits for development
- Third-party API integration
For your convenience, we offer a table with approximate rates and hours only for the development of the marketplace alone:
But remember that the duration and cost of building an NFT marketplace depend on the complexity of the features that you choose for your application and the geographic factors.
Moreover, this table does not consider the costs of:
- Infrastructure, which includes the server itself
- Testing and trial to make sure everything works correctly
- Normal and validated staging, so that the customer is satisfied with the result of the software. At this stage, it may be necessary to change some of the features, followed by a re-discovery phase.
- Communication and documentation
So, taking into account the above points, you can add from 30 to 50% to the specified cost in the table.
There are various companies that provide ready-made solutions for blockchain applications, but you should thoroughly check them to avoid potential issues. On the other hand, if you are not satisfied with the quality of the solutions that are available from a blockchain development company, then hire an NFT team to create a customized one.
The most popular NFT marketplaces
Below are some of the best NFT marketplaces that allow people to buy and sell digital art. Knowing these platforms should help in developing your own NFT marketplace.
OpenSea is a well-known NFT marketplace that's known for its variety of products and services. It's also one of the most popular platforms for buying and selling art, music, sports, and photography. It's also supported by over 150 cryptocurrencies. This makes it an ideal choice for anyone who wants to start trading and selling their digital assets. Its easy-to-use platform allows users to set up an account and start browsing and minting money.
It recently announced that it's now gas-free through its cross-blockchain support. This means that users can now trade with cryptocurrencies such as the Polygon, without having to pay fees. According to OpenSea, this feature will allow artists to earn money through the exchange.
OpenSea, an online marketplace for non-financial transactions, declared that it had a total worth of $13.3 billion as of early 2022. After it had received a new investment of $300 million. According to data released, OpenSea revenue spiked in August 2021 and then continued to increase in January 2022. During that month, it was able to achieve a record $386 million in fees for the month. In February 2022, the company's total revenue had dropped by 52% to $204 million. Despite this, it has managed to generate $7 million in fees so far.
The NFT marketplace known as the Nifty Gateway is one of the most eye-catching platforms when it comes to big-money NFT sales. In December 2021, two of the most expensive NFTs ever sold were Pak's The Merge and Beeple's CrossROAD.
Despite the platform's popularity on Twitter, it still draws in a lot of celebrity NFTs. One of the most notable features of the platform is its ability to create unlimited editions, which are priced at a base price. This ensures that no more NFTs are issued after the first edition has been sold.
The platform's ability to create unlimited editions and the strong secondary market for NFTs have also helped boost the demand for these products. Another advantage of using the platform is that it allows users to buy NFTs using fiat currency, which is a government-backed currency. This makes it more accessible to new buyers.
In 2020, the company's platform was able to generate over $11 million in revenue. It also hosted an NFT drop from Beeple estimated $6.6 million. It is the most expensive digital work ever auctioned. From May 2020 to September 2021 Nifty Gateway, introduced 6,623 new NFTs. These represent the digital artworks of 418 artists. According to a report released by ArtTactic, the total sales of these tokens on the platform during that period amounted to around $408.8 million.
One of the biggest cryptocurrency exchanges in the world, Binance, is also one of the largest NFT marketplaces. Its platform is supported by its own blockchain. This makes it one of the most stable and long-term NFT marketplaces.
The platform's massive size and scale allow it to offer exclusive events and partnerships. With the addition of BNB, users can easily access the platform and buy or sell NFTs. Depositing BNB or ETH into the exchange can also help sell your NFTs.
According to Binance Statistics from 2021, Binance generated $20 Billion in revenue. In 2021, Binance recorded 14.7 million blockchain transactions in one single day. It facilitates more than 1.4 million transactions every second. Its daily active users averaged 15.5 million during last December.
Effects of the NFT market decline on NFT marketplaces
The May crypto market crash wiped out the value of digital coins and other cryptocurrencies. This caused the sales volume of these products to plummet. Despite this, NFT marketplaces are still trying to recover from the investor interest that has gone down.
The decline in the sales volume on NFT marketplaces has been attributed to the nosedive in the prices of cryptocurrencies. Bitcoin, which is the most popular digital currency by market cap, has lost 57% since the start of the year to reach $20,276. Ethereum, the second-most popular digital currency by market cap, has also lost 59% to reach $1,428.50.
According to statistics, the total volume of NFT marketplaces during May was around $3 billion. Although this figure represents an impressive amount, monthly volumes from January 2022 came in at around $5.63 billion.
The majority of the revenue generated by the various marketplaces during May came from OpenSea, which had a total of around $2.6 billion. Other prominent marketplaces that contributed to the total revenue included Art Blocks, Magic Eden, and Solanart.
The average sale price of CryptoPunks was $136,800 in May, while Axie Infinity experienced a 5-month low of $17.57. On the other hand, Bored Ape and the Mutant Ape Yacht Club experienced sales values of $218,740 and $57,580, respectively.
OpenSea's monthly sales volume during May was almost $900 million higher than that of April and almost $980 million above that of February.
Some experts believe that the increasing number of NFT marketplaces will eventually reduce the influence of these types of platforms on the art market. Despite the lack of a blockchain-based metaverse yet, enthusiasts still believe that NFTs could have a significant impact on the industry. Despite the current economic situation, NFTs are still expected to have a positive impact on the gaming industry. They are enabling companies to expand their operations and create new opportunities for their customers. For instance, they expect them to allow players to own in-game avatars.
New NFT marketplaces
Through its platform, Gamestarter allows game developers to sell their in-game assets through the use of NFTs. It also allows them to trade digital assets from their successful launches. The platform's economy is powered by Gamecoin, a blockchain-based digital token.
Due to the novelty of the NFT technology and the company's approach to crowdfunding indie games, there are currently no direct competitors for Gamestarter. However, there is a clear demand for both NFTs and new video games.
Indie games are typically supported by hundreds of thousands of gamers through crowdfunding platforms such as Kickstarter and equity crowdfunding. However, these funding methods have certain drawbacks.
According to data from Cryptorank.io, Gamestarter has raised over $2.39 million in investment.
The startup company, known as Quint, is focused on connecting the metaverse to the real world through its platform. One of the ways it does this is by offering its own custom collection of digital art. When a user purchases an NFT from the company, they also receive a physical copy of the artwork.
Through the Metaverse Arts Club, which is an exclusive social club for the company's token and NFT holders, users can also get access to the company's various features. These include the ability to purchase custom merchandise.
The company's approach is similar to the way it is focused on the luxury industry. Through its various features, such as the super-staking pools, which are designed to reward its users, the company is able to provide them with a variety of real-world experiences. Some of the rewards that are available to its users include multiple types of travel accommodations, airline tickets, and supercar experiences. It also offers a luxury raffle pool, which has even bigger prizes.
During its pre-sale, which concluded on May 6, the company was able to raise over $4 million. After it was listed on various platforms such as CoinMarketCap and CoinGecko, the company has already gained widespread recognition.
StreamCoin, a blockchain company that focuses on the streaming and non-profit sectors, recently announced the launch of its STRMNFT marketplace on May 31, 2022. This is a place for creators and users to experience video non-profit organizations in a new and fun way.
The goal of StreamCoin's STRMNFT platform is to provide an easy-to-use interface for users to experience non-profit organizations and streaming videos. Aside from being an easy-to-use platform, STRMNFT also offers various features that are similar to traditional video platforms. These include the ability to follow and create playlists, and have the NFT collection available for private or public viewing
In addition to the launch of its marketplace, the company also released the first version of its Stream Chain, which is a native blockchain that can process 300,000 transactions per second.
Less than a month after the launch of its marketplace, STRMNFT has already attracted 5,000 of users.
As you can see, there are free niches for the NFT marketplace that can be filled. But let's go back to the key players in the market and consolidate their key indicators
NFT marketplace comparison table
To wrap up
The number of Non-fungible tokens (NFTs) in the blockchain business continues to rise. The emergence of the NFT custom marketplace has become an essential component of the existing crypto ecosystem. It is expected to significantly boost the industry's growth by allowing various individuals and groups to earn money from the blockchain business.
Despite the technology's limited capabilities, the NFT marketplace's development continues to gain popularity. The NFT custom marketplace is expected to provide a solution that seamlessly connects the crypto experience's various facets. It will allow individuals and groups to earn money from the blockchain business. Don’t miss this opportunity to try to build your own NFT or NFT marketplace now.