According to NonFungible.com, in the first quarter of 2021, the general capitalization of major NFT projects increased over 2100% (in the past year the total market growth was only 300%). Many NFT tokes are sold instantly, and the most popular ones were sold approximately for 70 million dollars. Moreover, various celebrities support the market by transferring their music, pictures, memes, videos, logos, codes, etc. into NFT.
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The most benefit the websites, which work as platforms for NFT trading to simplify the purchasing and selling of the NFT. In this article, we will shortly discuss what is NFT and where it can be applied, how to develop your own NFT marketplace, and how much it costs
What is NFT?
Non-fungible token, or NFT — is a digital token
that is designed to work as a digital certificate of proprietary rights for physical or virtual assets, such as photos, videos, tweets, codes, etc. Each NFT is a unique, non-fungible, indivisible digital asset. This means that NFT is different from Bitcoin and Ethereum, so they can not be traded or used as a payment method.
For example, the Cryptopunk 4250 NFT— is a proprietary rights certificate for a unique character that exists in the digital world, and according to the description, is a pixel image of a punk woman wearing welding glasses, with disheveled hair and purple lipstick. This lot is selling on the Larva Labs for 116 913 dollars.
NFT Cryptopunk 4250, selling on the Larva Labs
The other example of an NFT — a picture of a cute girl that smiles in front of a burning house. This picture is called the «Disaster Girl» meme. The 21 years old American Zoe Rot (the girl in the photo) sold the meme for 500 thousand dollars.
The Disaster Girl. Photo by Dave Roth/Know Your Meme
As you see, NFT can bring you insane amounts of money
. Some tokes are more attractive, this is why people tend to spend more on them, while the others are sold very cheaply. Everything is simple, if the token something popular it is expensive.
Here are some other examples of NFT lots:
How works the NFT marketplace?
Unlike with Bitcoin and Ethereum, you can not trade your tokens directly on crypto exchanges. To buy and sell NFTs, you will need a special platform that helps to release, store and trade non-fungible tokens. Today the most popular marketplaces are OpenSea, Rarible, Superfarm, and Mintable.
They use special smart contracts to generate NFTs and add the token to a unique data form called metadata. Then main parameters are added (name, non-fungible feature, indivisible feature, address, number, etc.). Next, the non-fungible tokens can be bought and sold on the platform for a fixed price or at an auction.
How do work the NFT marketplace smart contracts?
On the clients’ side, NFT marketplaces work like regular online shops. The user needs to create an account on the platform and a digital wallet to store NFTs and cryptocurrencies. Then, the user can use any listing to buy NFTs or create their token. The launch of an NFT is simple and looks like creating an eBay ad. You will need to state the name, price, a brief description, and an image, photo, video, GIF, and others.
OpenSea NFT marketplace interface
Niches of NFT use
Many NFTs are used to make money out of various digital art pieces; starting at digital copies of real pictures and ending up with memes. For example, on the OpenSea platform you can buy, sell, send images, videos, GIFs, and music. This platform is powered by Ethereum and creates NFTs by using the ERC721 and ERC1155 protocols.
However, art is not the only niche where NFTs can be applied. You can use it to trade collectibles (NBA Top Shot), game characters (CryptoKitties) property (Mintable), virtual worlds (Metaverses), investment offers, and any other sector, where the proprietary right can be turned into a token. The most important thing is to create a marketplace that will work with your proprietary rights needs.
For example, you want to develop an NFT marketplace to trade art, and in general, all you need to do is to develop an online shop
. The server part should have the ability to process, store, sell, and trade NFTs. It is relatively simple. If you want to have an NFT platform for property trading, you will need to develop something like Zillow or Trulia. These platforms work with MLS databases, find the location of the user, etc.
And this works with other niches too. Here are some other examples:
- Online studying. These marketplaces should offer a wider range of services for online learning. It includes selling the entire course, tracing the progress, and communicating with the teachers.
- Investment projects. These NFT marketplaces should function like stock markets for assets trading. They should have the power of issuance of legally valid assets with proprietary rights, dividends, and shares.
- Security. Non-fungible tokens can work as keys to various content, programs, databases, operational systems, or events. To sell these NFTs the platform should focus on security measures, and it should support Touch ID, Face ID, Eye ID, etc.
- Video games. Selling and buying NFTs that symbolize various game items and characters is usually done in-game or on external online platforms that guarantee a safe deal, like in Steam. It involves a tight integration with the game.
Main abilities of the marketplace
The NFT marketplace combines the features of an auction, online shop, and blockchain platform that issues non-fungible tokens. The users should be able to create their NFT products and sell them. Moreover, comfortable marketplaces offer additional functions to attract and keep more clients and to improve the general user experience on the platform. Consider starting from the following things, when you develop your own NFT marketplace.
Shop window. This function offers users to check all the necessary information on the lot: name, price, description, owner, payment method, rating, etc. Some NFT marketplaces give additional information on the blockchain and the token protocol so that the users see if the NFT is valid.
Search engine. Be sure that your users can easily find the item they need. It would be a good idea to divide various assets into categories such as art, photography, video, domes, memes, and music, so the users will navigate easily on the platform. The filters help to sort the things, especially if there are a lot of similar items.
Sign UpLog in. To sell and buy NFTs on the platform, the user should create an account. The sign-up process is usually done through emails, phone numbers, or social media accounts. Usually, the users are offered to state their cryptocurrency account. If they do not have one, they sign up via Metamask, MyEtherWallet, Coinbase Wallet, or other cryptocurrency wallets.
Creating an ad. This process should be simple and fast. Perfectly, it should be similar to eBay. To achieve the best results, try to create something like an OpenSea collection manager. It will help to upload the product, state the name, price, description, tags, external link, and other features.
Rarible marketplace shop window
NFTs Wallet. The users need a wallet to send, get, and store NFT tokens and cryptocurrencies. The easiest solution is integration with popular cryptocurrency wallets. The main thing is that the wallet supports your NFT protocol. Normally these are the Metamask, MyEtherWallet, Coinbase, and WalletConnect.
Trading history. Usually, the NFT marketplace has a section where the users can trace their trading history. This will help to understand how popular is the platform, what is being sold there, and the price. For instance, OpenSea trading history includes the following data: event, name, price, buyer, seller, date.
The lot creating process on OpenSea
Reviews and ratings. It shows whether the lot/seller is praised by the users. This information helps to estimate the specific lots. Usually, the rating is a score of 1 to 10 or a likedislike. The reviews can be like comments that any signed user can leave. The review can also be left by both sides after closing the deal.
Notifications. You can develop a push-notifications system to inform the users about new bets in their preferred category or shops, the status change, new messages, selling their lot, or updating the NFT platform.
Support. It is a crucial aspect of any trading platform. The support service will help the users to find answers, solve their issues and confrontations. It can be whether a call-center or email support, informational platform or chatbot.
Trading history on OpenSea
Non-fungible tokens standard
To run an NFT based on blockchain, you will need to follow a range of requirements that guarantee the asset work properly and have the necessary functions of an asset. Today, the most popular standards for NFT launch are:
- ERC721. It is used as a unique modification for someone or something based on Ethereum. It supports smart contracts and offers a wide range of tools for asset transferring by using the transferFrom method.
- ERC1155. This one is not just a standard, unique asset, it is a class of assets. In comparison with ERC721, it is much more effective. If you are a game developer and your goal is to sell 100 armor sets, you will need to write 100 smart contracts for ERC721, but for ERC1155 you will need to write one contract and state the quantity.
- BEP. The biggest crypto exchange like Binance launched a new blockchain BSC that supports smart contracts and is compatible with the Ethereum Virtual Machine (EVM). It includes the ERC721 and ERC1155 NFT equivalents — BEP-721 and BEP-1155.
How to create NFT marketplace? Steps.
The trading platform for purchasing and selling NFT — is a difficult kind of software, the developers should have a lot of experience as Merehead does. Since 2015 we help different businesses and people to rung fintech and blockchain projects like wallets and crypto exchanges. Our company can help you to run a marketplace from scratch or clone an existing platform.
You can see our portfolio or find out more about the condition via the email: firstname.lastname@example.org or through the phone number +1-206-785-16-88.
Step 1: starting the project
On the first step of launching an NFT marketplace, you and the developers need to study the details of your project, estimate the technical part and the general concept. Here, you will need to answer the following questions:
- What is your niche?
- How you will sell NFTs?
- Who is your target audience?
- What token protocol you are going to use?
- What technological stack you are going to implement?
- What is your monetization model?
- How is your project different from the existing ones?
- What features do you want to see there?
- Additional questions…
The answers to these questions will show you the direction of the development process and will help to decide on the features of your NFT marketplace. If you have difficulties with answering these questions, please, do not worry, since the developers will help you. They can describe your ideas in text or schemes, they can prepare the technical documentation so that you can start making a project.
When the general concept and specification are ready, the developers can make you a development plan, estimate the time you will need and the budget. Then you can start making a project.
Step 2: making a project and development process
When the technical aspect and the plan are discussed, the team of developers can get down to work. Firstly, you and the business analyst or the designers make a concept of the user interface (frameworks
, templates, prototypes) you describe the user stream and the functions. Then an effective architecture of the trading platform is created.
UX/UI design. The navigation and the user interface are crucial for NFT marketplaces, since the first impression, the usability, the user experience — all depend on it. So be sure that the design will be appreciated by the audience and that it will be simple enough, so anybody can figure out how to use it. It should remind them of Amazon or eBay.
An example of the user interface design of an NFT marketplace. Source
Back-end and smart contracts. On this level, the internal(server part) is doing the job. Here a lot of important functions of the business logic and marketplace are developed, including the blockchain, smart contracts, wallets, and auction mechanism(many NFTs are sold on auctions). This is an example of the technological stack of the NFT marketplace back-end.
Front-end. This is the external part of the trading platform that responsible for the interaction with the user. The main task of the front-end development is to provide a simple interface, security measures, and productivity. Here is an example of the technological stack for the front-end NFT marketplace:
- Blockchain: Ethereum, Binance Smart Chain.
- Token Standard: ERC721, ERC1155, BEP-721, BEP-1155
- Smart contracts: Ethereum Virtual Machine, BSC Virtual Machine.
- 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.
- Programming languages for web:Angular.JS, React.JS, Backbone, and Ember.
- 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 3: testing of the product
In this step, several test cycles take place to ensure the proper work of the platform. The QA team runs a few checking cycles to see that the project has no critical issues and bugs. Moreover, the content, usability, security, reliability, and productivity are also tested in various possible scenarios.
Step 4: releasing and supporting
After the testing is over, it is time to release the NFT platform to a cloud server. Please, keep in mind that this is not the last step, since you will need to organize the work of the support center. Moreover, the further development of the platform should be planned, so it follows the market tendencies and meets the users’ requirements.