NFT Auction Platform Development
In 2021, the volume of NFT trading increased approximately 400x and reached $13 billion. It is expected that the industry will be $82 billion worth by 2026, keeping an annual growth of about 40%. Hence, NFTs are one of the fastest-growing markets in the world. Trading platforms like OpenSea, Rarible, Mintable, Foundation, and Binance NFT take the most out of the growth. This article will tell you about the functioning of these platforms and the development of an auction platform for NFTs.
NFT stands for a non-fungible token, a digital identifier on blockchain that functions as an identification code. This code might also be a digital passport that proves the uniqueness and authenticity of virtual assets like digital art, photographs, videos, texts, GIFs, etc.
Every NFT token is unique and non-fungible. In other words, non-fungible tokens are impossible to split into minor parts (like a dollar is divided into cents and bitcoins into Satoshi). NFTs cannot be exchangers for other NFTs equivalently nor used as a payment method (money) for trading operations.
For example, CryptoPunk 5822 is an NFT that proves the ownership of the image of an azure-skinned punk with a blue bandana. Thus, the owner of the NFT has the original image, and all others are just copies. For example, the Mona Liza original picture is in Louvre and costs millions of dollars, while other photos and pictures are worthless copies.
An NFT auction is an internet platform that allows the trading of non-fungible tokens for a fixed price or on an auction like eBay. These platforms enable creating NFTs and linking an image, photo, animation, or video to them following putting it for sale. Minting an NFT is done with smart contracts.
The users’ part (frontend) of an NFT auction is similar to typical internet shops that allow starting auctions. The only substantial difference is the necessity of creating a cryptocurrency wallet to store NFTs. In everything else, NFTs auction platforms have no significant differences from eBay; a user has to sign up before being allowed to create a lot or use the listing to buy some NFTs.
The difficulties are often encountered in the following:
Scandinavian auction. A popular auction variation, where the supplier puts the lot for sale at a minimal price, and every bid increases the cost up to one minimum. Participation in the auction is not free. This type of auction is expected when the supplier wants to sell the product rapidly and for the best price.
First-price auction. The minimal, current, and maximum cost is announced for this auction. The participants make secret bids once, and the higher bid wins.
Penny auction. This is similar to the Scandinavian mechanism, yet the participants pay a small non-refundable fee to make a bid. Finally, the last participant bids and gives the total amount of the offer. The auction is free if not considering the fee bid fee.
Vickrey auction (second-price auction). This is a variation of the English auction, where the winner pays the amount the participant before them named.
Other types. There are also many auctions, for instance, Yankee, Japan, combo, sealed bid, etc. The niche and the target audience will help define the auction mechanism. For example, eBay employs the second-price auction, which the customers appreciate, yet the suppliers disapprove of it since the income is lesser.
Promising industries to launch an NFT auction platform. Source.
The prime thing is to create an NFT auction for a specific type of asset. To provide you with an example, if you require a platform for sports digital cards, you will need a typical online shop; the backend will provide minting, storing, and moving NFTs. It is relatively simple. If you want to launch a platform for real estate, you will need a Zillow or Trulia analog that is integrable with MLS, government registers of real estate, etc.
And this works for any niche, and regardless it is online learning, investment projects, security, video games, advertisements, and tickets.
Here are several popular monetization solutions for NFT auctions:
These are some of our cases in the blockchain development:
BigFan - it is a platform for selling sports NFTs using ERC-1155. All tokens are issued in cooperation with sports teams and players or their official representatives.
Vleppo - this BaaS platform provides freelancers and enterprises with a solution to manage and transfer their digital assets, create smart contracts with integrated escrow features, and take a loan with cryptocurrency collateral.
Wide Wine - a logistic blockchain platform that helps trace the supply chains of wine and verify the authenticity.
Coinbird/CEX - cryptocurrency exchange with high-level security and safety. Furthermore, it supports operations with fiat currencies.
AltcoinsHub - it is a P2P exchange that helps to trade all popular cryptocurrencies. Study more cases.
Step 1: Initiating the project
The first step is always defining the concept, namely understanding what NFT platform you want to develop. Since the clearer the idea, the easier it is to create.
Step 2: Designing and developing
UX/UI design. When you have defined the vivid concept, technology stack, and functions, you may start developing the NFT auction design. It is a must that the design is straightforward and intuitive yet appealing to your target audience. Hence, before launching the coding, research your target audience through focus groups and surveys.
Writing the code. When the design is ready, the programmers start to code it. They work on the backend and frontend and the development of smart contracts.
This is the technological stack for the backend of an NFT auction:
At the next stage of development, the QA team runs several cycles of testing the written code to ensure there are no bugs. Functionality, usability, performance, reliability, and security testing are also performed for all scenarios of platform use.
Step 4: Deploying the product
When the NFT platform has been thoroughly tested, it should be deployed in the cloud or on local servers. Train the staff and set up the technical support service, and plan the project's future development.