Cardano is third generation blockchain that provides a scalable, fast, and cost-effective environment for smart contracts, DApps, and NFTs. The network is the most popular blockchain platform on GitHub. Moreover, the platform issues ⅓ of global NFTs and takes third place in general NFTs trading volume. This article will explain why this blockchain is so popular among blockchain developers and NFT fans and how to develop your own NFT marketplace on the Cardano infrastructure.
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Cardano blockchain review
Cardano has functioned since 2015 and was launched by Ethereum co-founder Charles Hoskinson. The platform provides high scaling capabilities, resilience, functional compatibility, fast transactions, low fees, and quick verifications. Ouroboros (Proof-of-Stake variation) consensus mechanism is network fundamental. Furthermore, Cardano has its native token — ADA, along with standard functions like paying fees and rewarding stakers; it also is the network key management element; all ADA holders can introduce offers for developing and improving the Cardano network and vote for them.
Cardano blockchain review
The benefits of launching NFT solutions on Cardano
Ouroboros consensus mechanism. One of the prime benefits of Cardano for launching NFT solutions is the consensus mechanism. Ouroboros is a variation of regular Proof-of-Stake created by the Cardano team and renowned scientists. They aimed to develop a fast, scalable, reliable, and utmost secure blockchain. Ouroboros is the first consensus mechanism with academically proven security and reliability.
In Ouroboros, a group of network participants (slot leaders) from a special candidate pool verifies the transactions. Any ADA token holder can become a candidate if they block stake their tokens in the wallet. Leader selection is random, so the system remains decentralized, unlike standard PoS, where the biggest token holders receive the advantage. If the leaders fulfill their duty, they receive a reward in ADA; if not, the system takes their ADA tokens.
Interoperability. This term refers to the ability of heterogeneous blockchains to work together seamlessly, creating solutions that can work with multiple independent blockchains, transferring information and value between them.
For instance, you can implement a decentralized application, where:
Ouroboros consensus algorithm functioning in Cardano. Source
Scaling. Ouroboros consensus algorithm and sidechains technology allow Cardano to process up to a trillion transactions per second during a complete network deployment (i.e., when millions of people will use the network). Still, Cardano’s bandwidth is 250 transactions per second now. However, it is more than Bitcoin (4-7 transactions per second) or Ethereum (in June 2022, 12-17 transactions per second).
- The first blockchain will have the regulations and laws agreed upon by token holders during a community voting;
- The second blockchain is the environment where applications function; namely, use the laws of the first blockchain where they currently exist;
- The third blockchain is for smart contracts that use application data from the second blockchain to service users;
- The fourth blockchain is for arbitrage system that solves disputes of ecosystem participants.
Comparing transaction speed of payment systems. Source
How to develop an NFT marketplace on Cardano?
On the technical end, an NFT marketplace on the blockchain is an online store that allows users to create, buy, and sell NFTs hastily; the process is similar to purchasing products on Amazon or eBay. The only significant difference is that all transactions for minting and trading NFTs are registered in the blockchain. Here is a step-by-step instruction on how to develop an NFT marketplace on Cardano.
Step 1: Determine your niche.
Likewise, in launching any other project, the first step to establishing a blockchain platform for trading non-fungible tokens is determining the target niche. According to these criteria, there are two categories of NFT platforms.
General NFT market. These are NFT trading platforms where users can create and sell different asset classes. For example, users can go to OpenSea and sell assets in the following niches: digital art, collectible cards, sports, video games, domains, metaverses, texts, etc. Due to a broad set of NFT products, these marketplaces have bigger audiences yet can’t offer personalized designs or employ highly-efficient marketing strategies focusing on a narrow target niche.
Specialized NFT platform. These are NFT marketplaces that provide a single asset type. For instance, NBA Top Shot sells only sports NFT, while Gala Games only its video game-related items. However, the niches can be even narrower; for example, Valuables sells famous people's tweets. Developing specialized NFT platforms is not much different from general platforms without considering design. Specialized projects allow the implementation of personalized designs for a user interface that will be more efficient for a particular target audience.
Google Trends and other instruments can help to pick a nice for the NFT marketplace.
Step 2: Select a blockchain developer.
The second step requires finding a technical partner to help implement your project. You must find a developer team with extensive experience working with Cardano blockchain and NFT marketplaces, like Merehead. Since 2015 our team has offered advanced technical support for software development in blockchain, DeFi, Game-Fi, and NFT, from smart contracts to hyper-secure cryptocurrency exchanges and NFT marketplaces. Proceed to our website to study our portfolio.
BigFan marketplace for trading sports NFT is one of the NFT solutions created by Merehead
Step 3: Pick a project monetization model.
After you determine with the developer, you must thoroughly work on the project concept; namely, define business targets, functionality, technical requirements, and other significant moments.
Also, there are several monetization models you can choose from:
- Fees. The most frequent monetization model involves charging a fee for each trade on the platform. Usually, it is 1-5% that the supplier pays since they profit from selling the token. However, SuperRare and Foundation charge up to 15% fees from the buyer, which is painful and not preferred.
- Listing fees. This popular model charges the seller a fee for listing their NFT on your platform. Moreover, you will charge a fee regardless the user sells the NFT. Typically, this model is beneficial if countless sellers spam items. A listing fee will limit the spammers.
- Subscription. It’s not a very popular monetization model, yet other internet sectors employ it. According to this model, the user will have to pay a monthly fee for accessing your NFT platform. This monetization model will benefit you if you can offer unique items on the market that no one can offer. For example, use it if you have NFTs of influencers, politics, sportsmen, writers, or developers.
- Freemium. It is also a standard monetization model for online marketplaces. Basically, you will offer main functions for free, yet the users can get additional opportunities for a fee. For instance, you can provide ad-free, a unique item card, top listing positions, etc.
- Advertisement. The last option for profit is adverts. You can offer an NFT promotion on your platform or advertise products or services from suppliers like crypto exchanges and wallets.
Step 4: Decide your marketplace functions.
The fourth step to developing an NFT marketplace on Cardano requires determining the functions for users and administrators. Here is a brief list of functions with a description that any NFT platform must provide.
Showcase. The NFTs showcase is the first thing your users see. Your success will depend on whether the showcase is appealing and intuitive. Therefore, thoroughly study the structure, content, color scheme, and design. Furthermore, make sure that the navigation and layout of your platform remind users of popular solutions on the market.
Rarible showcase is an excellent example of a superior design and great navigation.
Integrations with wallets. As mentioned above, NFT transactions on your marketplace will be recorded in the Cardano blockchain. Hence, if you develop your NFT marketplace, you must integrate it with cryptocurrency wallets. The most popular wallets for NFTs are Metamask and TrustWallet. The less popular solutions are Enjin, AlphaWallet, Coinbase, PillarWallet, Binance Chain Wallet, Argent, Kukai, etc.
Minting/creating NFT assets. Also, you will have to allow the building of non-fungible tokens in the marketplace. You will require a smart contract and interface that will lead the user through the process of making an NFT. The more straightforward the process, the better; perfectly, if the user knows from the first glance what to do.
Listing items. Minting tokens and listing them are two different processes. To list an NFT on the platform, the user must name it, write a description, select a sales method and a payment system, and state the price and duration. Then the moderators will verify the lot and list it on the platform.
The users’ choice of wallets for storing NFTs. Source
The description of creating and selling NFTs on OpenSea
Search engine, filters. You must provide the users with a search engine to help them find items with keywords, categories (art, music, texts, videos, collectibles, domains), and filters (price, date, type). It is preferred if the search system is similar to Amazon, eBay, or other popular stores.
Ratings and reviews. Now, users are used to comparing other people’s reactions; therefore, this feature is necessary. You must allow the users to leave feedback and marks. Furthermore, you must implement ratings for NFTs according to users’ reactions.
The rating of hot lots on the OpenSea NFT platform
Auction system. Users are also used to auctions for buying NFTs and other art pieces. Therefore, you must add this feature to your platform. It will allow the NFTs sellers to get maximum profit and make the trades more exciting.
Notifications. Your platform will send various messages to users. Typically, you will notify the users of ending the lot moderation, selling and item new messages in the chat, platform updates, etc. However, do not limit to a standard set of messages. You can also make your platform notify the users of new NFTs from their favorite authors, price growth or dump of a preferred lot, and others.
NFT Royalty. This function allows the authors to receive interest from the resale of their NFTs. You will have to create special smart contracts according to the rules.
Support. The last function concerns the technical and informational support of users. These are articles, instructions, and chats via mobile or online.
Step 5: Develop an appealing interface.
The user interface of your has a critical impact on the user experience. The UI must be clean, attractive, and intuitive. Furthermore, the user interface design must be scalable and offer additional functions.
Here is the technology stack for the frontend of the NFT marketplace:
- Programming languages for web: Angular.JS, React.JS, and Vue.JS.
- Programming languages for mobile: Java, Kotlin for Android, and Swift for iOS.
- Architecture: MVVM for Android and MVC, MVP, MVVM, and VIPER for iOS.
- IDE: Android Studio and Xcode for iOS.
- SDK: Android SDK and iOS SDK.
Step 6: Develop the smart contracts.
The next step to developing an NFT marketplace on Cardano is smart contracts that include the minting and NFT trading conditions. You can create smart contracts on Cardano with Plutus, Haskel, and Marlowe programming languages. Each language has its feature, allowing you to select an optimal solution depending on your needs.
Step 7: Develop the server part.
The server part of your marketplace also includes databases, APIs, and other elements.
The technology stack for the backend of an NFT marketplace:
- Frameworks: Spring, Symfony, Flask.
- Programming languages: Java, PHP, Python.
- Databases SQL: MySQL, PostgreSQL, MariaDB, MS SQL, Oracle.
- Databases NoSQL: MongoDB, Kassandra, DynamoDB.
- Search engines: Apache Solr, Elasticsearch.
- DevOps: GitLab CI, TeamCity, GoCD Jenkins, WS CodeBuild, Terraform.
- Cache: Redis, Memcached.
Step 8: Test your product.