{"id":4451,"date":"2021-11-23T06:23:08","date_gmt":"2021-11-23T06:23:08","guid":{"rendered":"https:\/\/codewaveinsdev.wpengine.com\/?p=4451"},"modified":"2023-04-25T04:34:31","modified_gmt":"2023-04-25T04:34:31","slug":"nft-marketplace-development","status":"publish","type":"post","link":"https:\/\/codewave.com\/insights\/nft-marketplace-development\/","title":{"rendered":"NFT Marketplace development"},"content":{"rendered":"\n

In 2021, Kings of Leon clocked in USD 2Mn+<\/strong> <\/strong><\/a>for their music track by selling it using a  non-fungible token (NFT)<\/strong>. Jack Dorsey, the Twitter founder, sold his first-ever tweet as NFT for approx USD 3Mn+, and then a piece by digital artist Beeple<\/a> was sold for USD 69.3Mn+<\/strong>. <\/p>\n\n\n\n

These are just a few examples of the frenzy around NFTs. <\/p>\n\n\n\n

For sure, NFTs are here to stay, the signals are pretty strong with the NFT <\/strong>market cap<\/strong><\/a> growing impressively fast, from <\/strong>$141.56 million in 2019 to $338.04 million in 2020. The latest report<\/a> estimates NFTs to be already worth more than $7 Billion<\/strong>.<\/p>\n\n\n\n

Here\u2019s a detailed report on total sales<\/a> involving a non-fungible token (NFT) in gaming, art, sports, and other segments from 2018 to 2020 (in 1,000 U.S. dollars)<\/p>\n\n\n\n

<\/p>\n\n\n\n

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NFT sales data<\/figcaption><\/figure>\n\n\n\n

Not just that, there were about 70k+ sales<\/a> between Sept 15, 2021 to Oct 15, 2021<\/strong>. <\/p>\n\n\n\n

And where are all these transactions happening? <\/p>\n\n\n\n

It\u2019s called an NFT marketplace<\/strong>. <\/p>\n\n\n\n

Yes, an NFT marketplace<\/strong> is quite similar to an e-commerce platform but unlike traditional eCommerce websites, NFT marketplaces<\/strong> are built on a blockchain architecture. <\/p>\n\n\n\n

If you\u2019re planning to venture into the luxury collectibles market, we highly recommend you to <\/strong>read this insight<\/em> to stay abreast of the latest in the NFT marketplace development<\/strong>.<\/p>\n\n\n\n

What is NFT?<\/strong><\/h2>\n\n\n\n
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OpenSea NFT Marketplace<\/figcaption><\/figure>\n\n\n\n

NFT <\/strong>stands for Non-fungible Token<\/strong> (NFT). <\/p>\n\n\n\n

But, what\u2019s non-fungible? <\/strong><\/p>\n\n\n\n

To understand that, let\u2019s understand what is fungible?<\/strong><\/p>\n\n\n\n

Gold, crude oil, currency are all fungible i.e., 10gm of gold that you might be having is equal to the 10gm of gold your best friend has. Similarly, with crude oil and money. In short, fungible digital\/physical objects are replaceable, they are indistinguishable, they are not unique. <\/p>\n\n\n\n

Now, what is a non-fungible digital\/physical good?<\/strong> <\/p>\n\n\n\n

Anything that\u2019s unique, be it the first tweet of Jack Dorsey, or the \u2018Disaster Girl\u2019 meme\u2019s original image. A different example, the Jersey Lionel Messi won in Copa America 2021 final can potentially be a non-fungible item, while the duplicate Jerseys that are sold in apparel stores with a number 10 on it and the name of Argentina\/Messi could not be a non-fungible item.<\/p>\n\n\n\n

The million-dollar question, what are NFTs?<\/strong><\/p>\n\n\n\n

NFTs are digital tokens that are created using the smart contracts and algorithms on a blockchain network like Solano, Ethereum, Flow, Tron, etcetera to represent the digital ownership of non-fungible art, games, real estate, music, collectibles, etcetera. <\/p>\n\n\n\n

What\u2019s an NFT marketplace?<\/strong><\/h2>\n\n\n\n
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Rarible CultureCult NFTs<\/figcaption><\/figure>\n\n\n\n

NFTs cannot be traded directly like fungible tokens, but a decentralised NFT marketplace<\/strong> enables you to create, buy, sell, and store minted NFT tokens of digital assets. <\/p>\n\n\n\n

By the way, minting<\/em><\/strong> is the process of creating a new block for the NFT, validating the information about the NFT, and storing that information on the Blockchain network<\/em>, which could be Ethereum, Solano, or any other Blockchain network. <\/p>\n\n\n\n

Also, NFTs ownership can be transferred & tracked with smart contracts. NFT marketplace, therefore, acts as an auction platform for digital collectibles.<\/p>\n\n\n\n

Note<\/strong>: Blockchain<\/a>, as you would know, is the open source technology that powers up these platforms. It is built for security, transparency and decentralization. Blockchain represents the distribution of data in the form of blocks or chains with no single authority or control over them. For NFTs, it ensures verifiable proof of ownership, ownership traceability, and ownership information immutability. If you\u2019re new to Blockchain, we recommend this insight by Abhijith HK<\/a> where he has demystified Blockchain technology<\/a>. If you\u2019re someone from the agritech industry, here\u2019s an insight on how you can use Blockchain for food traceability from farm to table<\/a>. And if you\u2019re from the finance world, do read the insight on DeFi (decentralised finance)<\/a>.<\/p>\n\n\n\n

A few NFT marketplace inspirations<\/strong><\/h2>\n\n\n\n

SuperRare<\/strong> : Focuses on digital art by a handful of selected leading concept artists.<\/p>\n\n\n\n

<\/p>\n\n\n\n

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SuperRare NFT marketplace platform<\/figcaption><\/figure>\n\n\n\n

Opensea<\/strong> : A trending universal marketplace that has non-fungible assets representing domain names, artworks, training cards etc.,<\/p>\n\n\n\n

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OpenSea NFT marketplace platform<\/figcaption><\/figure>\n\n\n\n

Rarible<\/strong> : This is owned by community members possessing rari tokens. It supports a wide range of digital collectibles with an emphasis on art tokens, photography, metaverses, games, music, memes, NSFW, and punks.<\/p>\n\n\n\n

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Rarible non-fungible token (NFT) marketplace platform<\/figcaption><\/figure>\n\n\n\n

Essential features of an NFT Marketplace<\/strong><\/h2>\n\n\n\n

Aesthetic storefront<\/h3>\n\n\n\n

NFTs are decentralized, it falls under web3.0 but as of now we are accessing them using web2.0 browsers and apps on our mobile phones and digital devices. And so, the way we access it for minting NFTs, bidding\/auctioning for digital collectibles, verifying the ownership, or for any other use case should be highly intuitive. Your NFT marketplace should score high on UI-UX, and the transaction interface, the customer convenience should be at least at par with other existing marketplaces that we know today. <\/p>\n\n\n\n

Real-time English, Dutch Bidding<\/h3>\n\n\n\n

Are you aware about how bidding works in the physical collectibles market? Of course, you know that bidding happens in real-time, the hammer stroke style bidding. Pretty much every existing NFT marketplace has real-time auctioning\/bidding features. And so should your NFT marketplace.<\/p>\n\n\n\n

But within the bidding world, we have different approaches. Your NFT marketplace should ideally facilitate all the available bidding approaches. The most common bidding styles are the Dutch auction and the English auction. <\/p>\n\n\n\n

In the Dutch auction method, NFT sellers will decide the minimum and maximum price range within which the bidding shall happen. Usually, the Dutch auctioneers would start from a price way higher than the expected demand price, and over the process of bidding the price would decline. As soon as a bidder accepts the auction price, the bidding process ends.<\/p>\n\n\n\n

In the English auction method, the NFT auctioneers would define a minimum price for the bidding to begin and over the auction price \u2013 the highest price bidder would get the collectible item. Lastly, there is a fixed price bidding as well, which is equivalent to how sales happen in an organised retail market.<\/p>\n\n\n\n

Bundled selling<\/h3>\n\n\n\n

Another feature that some of the top NFT marketplaces have is the bundled NFT selling<\/strong>. In this, creators can pack up together a bundle of NFTs or tokens for digital collectibles, and sell it on the marketplace. This is useful in capping the gas fee<\/strong>, which is the cost for transacting on the Ethereum network. <\/p>\n\n\n\n

Rankings, search & filters<\/h3>\n\n\n\n

NFT discoverability contributes to the customer experience, better discoverability and visibility can help creators clock in more revenue as well. Facilitating bidders to find non-fungible tokens based on their volume, demand, price, listing date, recency, scarcity, expiration date, view counts, and other search criteria\/filters would result in better engagement and experience for both bidders and sellers. <\/p>\n\n\n\n

Ownership transferability & royalties<\/h3>\n\n\n\n

Your NFT marketplace must facilitate ownership transferability features, so that NFT owners can sell\/resell the owned tokens. There should also be options for original creators to configure the NFT ownership transferability in a way that they keep earning the royalties with every new sale.<\/p>\n\n\n\n

Tech stack for NFT marketplace development<\/a><\/h2>\n\n\n\n
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NFT marketplace architecture, tech stack<\/figcaption><\/figure>\n\n\n\n

NFT architecture terminologies<\/strong><\/h3>\n\n\n\n

Before we discuss the tech stack for NFT marketplace development<\/a><\/strong>, let\u2019s take a look at some of the common NFT architecture terminologies<\/strong>:<\/p>\n\n\n\n