How to Navigate the World of NFT Marketplaces: Beginners’ Edition

ByBlockchainX

NFTs are a new type of digital asset containing unique information. Each such token has its own value and price, but they do not have a common capitalization. At the same time, the totality of the most popular assets is about $17 billion.

Tokens are used as cryptocurrency assets. They can be sold, bought, given or bequeathed; they allow owners to make good money. The value of NFTs often increases, reaching tens or even hundreds of millions of dollars in some cases. For example, the most expensive token went to a new owner for $532 million. 

NFT trading is carried out on special exchanges – marketplaces. But well-known auction houses such as Christie’s and Sotheby’s also offer tokens for auction.

This market is developing, gaining momentum, and becoming more and more popular. This means you have a great opportunity to make money by trading tokens by creating your own NFT marketplace.

What is NFT

NFT stands for non-fungible token, which translates as a non-fungible token. This is a special type of crypto-asset that cannot be replaced with something of equal value. For example, you can sell Bitcoin and then buy it again and the account will still have the same 1 BTC, but if you have a unique photo, you will not be able to replace it with a similar one. 

The answer to the question of what an NFT is in simple words is: it is a digital record in a blockchain registry, a password-protected link to a work of art or other asset, a kind of certificate for the right to own a unique digital object. It, in turn, can be compared to casino chips, which are not regulated in any way, are not money, but still have value.

Tokens cannot be faked, and rights to them can be proven at any time. They are reliably protected thanks to special encryption. After all, all data is stored in blocks that can be located on various devices around the world, which complicates the hacking process. 

Which tokens are classified as NFTs:

  • photographs and pictures;
  • musical works;
  • trading cards;
  • digital paintings;
  • luxuries;
  • domain names;
  • texts;
  • deleted scenes from films;
  • videos and gifs;
  • graphic design;
  • ballet parts;
  • game characters, etc.

All digital files that are unique and valuable can theoretically become a token. At the same time, each NFT is special and is valued differently. For example, the world’s first SMS was sold for $150 thousand, the first tweet – for almost $3 million, a photo of a girl smiling against the backdrop of a burning house, which became a famous meme – for $500 thousand, and the avatars that appeared before the screening of the new part of The Matrix – just for $50 per unit.

To make money, you can create tokens or a series of tokens on different platforms and trade, or launch your own marketplace and receive income from the commission for NFTs put up for sale. Also, special platforms for creating and selling tokens may charge a fee for smart contracts that allow the blockchain to securely store data, or for initializing an electronic wallet in which assets will be stored.

What are NFTs for?

Tokens were created with the aim of making a profit from their sale to collectors, gamers and art lovers. Now they are used to monetize the popularity or commercialization of digital art (paintings, music, memes, etc.). In addition, they are needed for trading game characters, real estate, and virtual worlds. They can be used in any area suitable for tokenizing ownership of an object. The main thing is to create an NFT marketplace with NFT Marketplace Development for your needs. 

Areas of application of tokens:

sale of works of art – an online store that allows you to produce, store, and sell assets is suitable;

work in the real estate sector – it is better to develop a platform that can cooperate with databases and government registers, find the location of the participant;

training – platforms should offer various programs for acquiring knowledge online and track performance indicators;

investments – here you need a service similar to the stock market;

access keys – tokens are often used to gain access to content, events, programs, and databases;

games – trading of characters or items is possible both within the game and on external platforms with a secure exchange of fiat for a game asset. 

How tokens differ from cryptocurrencies

Cryptocurrency and tokens are the most popular digital assets created in the blockchain system. Digital coins have their own blockchains, while NFTs reside on existing ones. 

The formation of asset values ​​also differs. The price of cryptocurrency is influenced by user demand and market supply, and the price of tokens depends not only on this, but also on other NFTs, the release of additional tokens, and other factors. 

Another difference is that the issuance of digital coins is always decentralized, while the creation of tokens can be either centralized or decentralized.

An NFT is an object that has no analogs, and cryptocurrency cannot boast of this.

At the same time, despite owning the token, you will not influence its use outside the blockchain. That is, when purchasing, for example, a deleted scene from a famous film, you should not expect that no one else will be able to see it. People will watch videos on the Internet as much as they want and without paying for views.

The main thing in NFTs is exclusivity, a unique right to own value.

If we compare it with something more familiar, then for a collector, gamer or fan of beauty, buying a token is like getting the original of a favorite work for an art connoisseur.

In addition to their value, such assets are also an excellent opportunity to make money because you can always buy them cheaper and then sell them at a higher price, especially since interest in this topic, as well as the demand for NFTs, is growing every year.

What is an NFT marketplace?

An NFT marketplace is a special platform for issuing, selling and storing non-fungible tokens, built on the blockchain. Here you can meet artists, designers, authors and crypto-enthusiasts who want to produce, sell and trade digital works of art or collectibles. 

NFTs are purchased using cryptocurrency, mainly Ethereum, but a number of platforms also accept bitcoins and other digital coins. You can store them directly on the platform or on another electronic wallet after withdrawal.

Transactions are carried out according to the principle of trading marketplaces such as Amazon, AliExpress, etc., but tokens cannot always be obtained with one click of a button and a transfer of funds. Sometimes you have to fight for an asset at auction.

Types of NFT marketplaces:

for placement of goods – open (anyone can place their token) and closed (only some developers have the right to add tokens);

by the form of ownership – public, created by a group of users, and private, opened by an individual, company, or small community of like-minded people;

in terms of content – universal with any content and a variety of categories, thematic (only art or game items, for example) and curated (management sites determine which tokens are more valuable).

To work on the site, the user must register and open an electronic wallet to store tokens. After this, he will have access to the creation of art objects, and will be able to put them up for sale and buy other people’s assets. Moreover, it is better if the marketplace offers different trading options (not only sales at a fixed price but also auctions). Before a token appears on the platform’s list, it undergoes moderation. 

Success factors for the NFT marketplace:

Deficit latter relates to games and is released so that all gamers can purchase the desired token. There are also unique tokens with a signature similar to an autograph. Such assets are highly valued. The more rare NFTs there are on the marketplace, the more users you can attract.

High liquidity If assets are easily bought and sold, and prices do not constantly fluctuate, the demand for your goods will be higher.

Security It is important to ensure protection against hacker attacks and vulnerabilities. All transactions must be reliable and transparent.

Variety of tokens  If you give users a good choice, you can attract more people to the site. At the same time, simplifying the publication of tokens and other features for creators will be of interest to various authors.

Corporate style Unique elements allow you to differentiate yourself from your competitors, evoke associations with your business in the audience and be remembered by users faster.

A successful platform is one where different users come to create new tokens, sell and buy them. The more options a site offers, the higher the interest in it from the target audience. 

Create your NFT  With NFT Development company.

How to make money using the NFT marketplace

Any marketplace receives commission income from each transaction made. The percentage is determined by the site itself, so it is different for everyone. On average, the commission on NFT platforms is 3%.

Also, marketplaces may charge a fee for initializing a digital wallet or for smart contracts. The latter are programs on the blockchain that allow operations to be carried out without fear of the transaction being disrupted because if the established conditions are not met, the transaction will be canceled. Smart contacts consist of a code with rules for operation and two keys. One of them is provided by the creator of the contract, and the second, unique one, is provided by the contract itself.

Earnings from NFT marketplaces depend on the commission, sales volumes and the cost of the tokens that are sold.

How to make your own NFT marketplace: step-by-step instructions

An effective NFT marketplace is a flexible trading platform that contains wide functionality, a convenient user interface, reliable software and a unique design, and also ensures smooth operation, data and transaction protection.

Creating such a platform is a complex process, so all work must be carried out in stages.

Stages of creating an NFT marketplace:

Market analysis  Before creating your own marketplace, you need to study the market, analyze competitors’ sites, evaluate their strengths and find their weaknesses so that you can use this to your advantage.

Strategy development will offer users how you will stand out from your competitors.

Creation of a marketplace The customer informs the developers of his requirements, the functions necessary for the effective operation of the site are selected, and the site architecture is developed (number of pages, modules, blocks, sections). Also, work is being done with blockchain, smart contracts, and wallets, and an auction mechanism is being introduced. Creating a platform from scratch allows you to get a reliable NFT marketplace with convenient functionality, clear navigation, and an attractive modern design.

UX/UI design will help you stand out from your competitors and attract an audience interested in the product.

Testing The team launches a series of checks, during which they study the operation of the platform and identify possible errors and bugs. If there are any shortcomings, they are eliminated, usability is improved, and the safety and efficiency of the site is checked.

Support and further maintenance  If you wish, you can order a platform maintenance service, which will allow you to promptly eliminate errors, quickly solve problems, make changes in accordance with trends, and develop the site.

A ready-to-go NFT marketplace must be linked to a digital wallet, as it will allow users to connect and conduct trades directly. You also need sorting of tokens by category, a personal account to display information on transactions, and other functions.

Platform functionality:

Showcase  (name, description, owners, bids, price, purchase method, rating, etc.).

Search In order for users to easily and quickly find the desired item, it is necessary to consider a search system on the site.

Filters  All items should be divided into categories, such as art, photography, videos, memes, music, etc. This will make it easier for participants to navigate the site. 

Registration  To issue and sell tokens, the user must first register on the platform. This can be done via email, phone or social media.

Wallets  The simplest option is to provide integration with popular crypto wallets. This will be especially convenient for those who already use such a wallet. 

Announcements  This function is needed so that the user can quickly download a file, post information about the token, specify its properties, tags, external links, etc.

Trading history This section helps to analyze the popularity of the platform, and study its products, what, for how much, and when it was sold.

Rating and reviews Allow users to evaluate lots, sellers, and buyers. You can create a vote in the form of likes or by pressing a particular number and also provide the opportunity for participants to leave comments or write about their impression of the transaction.

Notifications  Care should be taken to inform users about new rates, changes in product status, token sales, site updates, etc.

Help Desk  This function will allow you to quickly resolve problems and conflict situations, and participants will be able to quickly receive answers to their questions. To do this, you can organize a call center, set up a chatbot, or create a form for sending an email.

Tokens are created primarily on the Ethereum, Flow and WAX networks. To launch them on the blockchain, NFT standards must be applied. Each has its own rules and capabilities when working with different wallets. Thus, an art object created on the Binance Smart Chain platform can be sold only on those platforms that support BSC. Ethereum or Flow networks will not be suitable here unless they provide some way of cooperation.

If you are interested in how to create your own token and make money from it, first you need to select an object, that is, something that you want to transfer into the digital space. It can be anything: a song, a painting, an illustration, an avatar, etc. Then you need to register on the marketplace, install a crypto wallet, create an account, then use a special program to upload the file, add a name, and description, and fill out the form. After creating a token, it should be put up for sale.

Where is the best place to open an NFT marketplace? 

It is most convenient to open the platform in countries where they are loyal to cryptocurrencies since sales and purchases are carried out mainly for digital coins. States that recognize such assets create favorable conditions for doing business, but require compliance with laws and certain rules, especially in the area of ​​combating money laundering. 

Countries loyal to cryptocurrency:

  • Estonia
  • Lithuania
  • Cyprus
  • Malta
  • France
  • Canada
  • USA, etc,

NFT marketplaces are available not only in these countries. You decide for yourself where to register your business and where the optimal conditions are for you. 

For reference: in December 2021, the first NFT marketplace appeared in Ukraine. The ArtBay platform, which sells paintings by Ukrainian artists and other objects, allows auctions to be held on the basis of the well-known Binance service. You can buy works of art using Binance Coin cryptocurrency and dollars. 

How much do you want to create an NFT marketplace?

Development of an NFT platform is a labor-intensive process since it is necessary to create not just a website, but a complex project with wide functionality, thoughtful usability, unique design, and various integrations. 

The cost of development depends on the type of marketplace, the number of pages and sections, functions, and design features. On average, a simple platform for selling tokens will cost 3-5 thousand dollars, and creating a platform from scratch will cost $20,000.

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