NFT stands for nonfungible token. A fungible asset can be easily exchanged for another of the same type in the blockchain world. For example, a Bitcoin can be exchanged for any other Bitcoin. However, NFTs cannot be replaced because they’re unique (for example, a CryptoKitty).
NFTs are currently being used on several blockchain platforms, with the Ethereum network being the most widely used. While specific implementations differ from platform to platform, generally speaking, NFTs act as verifiable proof of ownership for digital assets.
NFTs are increasingly being used to represent artworks, music, video clips, sports memorabilia, items within games, and more. For example, the NBA recently launched its own NFT platform, where it has started selling virtual trading cards featuring basketball players.
What is an NFT marketplace?
NFT marketplaces are digital marketplaces that allow you to buy and sell your NFTs.
NFT marketplaces are usually dedicated platforms where you can browse and discover digital art, just like you would on Instagram or other social media platforms, except that it all exists in a nonfungible token.
The difference between an NFT marketplace and an exchange is that a marketplace doesn’t require a wallet address to trade. You can buy and sell without any technical knowledge or cryptocurrency wallet. This makes them ideal for new users who don’t have a wallet address yet.
These marketplaces typically take a cut of each sale as a transaction fee. Many also require that sellers pay a listing fee.
Some popular NFT marketplaces include OpenSea, Rarible, SuperRare, and Foundation.
Top Features of NFT Marketplace
Ecosystem. It’s where you can showcase your unique digital artwork to potential buyers and where collectors can find their dream items.
It’s also a way for artists to earn money from their work beyond simple tips and tokenization.
NFT marketplaces can be as straightforward or as complex as you want them to be. They range from platforms like OpenSea, which are essentially glorified directories, to artist-centric systems like MakersPlace, making it easy to share your work with the world.
Here are some of the best features in an NFT marketplace:
1. Secured Transactions and Contract Signing
Secured transactions with the ERC20 token standard ensure security, confidentiality, and authentication. Remember, no one can access your assets unless you allow them.
By signing contracts on the NFT Marketplace, the artists can make it easier for other users to send funds to them or other people by allowing them to sign off on documents through various methods, such as signing documents through email, scanning documents, or passing around virtual pens.
2. Different Types of Tokens Creation
One of the most critical aspects of an NFT marketplace is its provision to create different types of tokens. The creation tools must be simple and easy to use, allowing anyone to start quickly.
The marketplace should also allow users to create their ERC-721 and ERC-1155 standards. It should also have a set of tools that can help users create unique tokens.
3. Active Contributor’s List
Each user has their own publicly accessible list of active contributors on their profile page, visible to everyone. The list shows the top contributors and their IDs, and the amount they contributed. Also, users can see the total number of active contributors to their projects or tasks. This feature ensures that each contributor receives a fair share of rewards for participating in various tasks or projects on the platform.
4. Referral & Reward Points
An affiliate program provides incentives for referring customers to your business by offering rewards or commissions. When customers refer their friends, family, and others via email or social media platforms, they receive reward points.
The more people who sign up through their referrals, the more reward points they earn. This incentivizes them to promote your business by sharing their referral links on social media channels like Facebook, Instagram, Twitter, LinkedIn, Messenger, and WhatsApp.
5. Analytics Dashboard
The analytics dashboard shows the marketplace statistics in real-time based on the admin’s preferences. To make better business decisions, the user can filter data to select specific time intervals and generate various reports on orders, sales, or tokens.
6. Social Media Integration
Navigating through different platforms can be frustrating. With social media integration, you’ll be able to share your work across multiple platforms simultaneously. The added exposure will help your work reach a larger audience, which will, in turn, increase the number of potential buyers who are interested in what you have to offer.
7. Flexible Listing Options
You shouldn’t have to overpay for listing services you don’t need. Look for NFT marketplaces that offer a variety of price points to choose the one that works best for your needs. Some marketplaces charge per upload, while others charge a flat fee.
8. Accepts Multiple Forms of Payment
Payment gateways should accept more than just credit cards; they should also accept cryptocurrency and other forms of payment like PayPal, Apple Pay, and Google Play. You can sell your work no matter what form of payment a customer wants to use.
Types of NFTs
NFTs are a broad category, but they all share the same basic principle — a cryptographically secure token that identifies something of value. This can take many forms:
Art is the most popular NFT item, with more than $250 million in sales since 2017. Artists like Beeple and Pak have earned millions selling their art as NFTs.
3LAU became the first musician to sell an album as an NFT earlier this year, and it sold for $11.6 million. Kings of Leon will release its new album as an NFT on May 16th, 2021.
3. Sports cards
Nonfungible tokens have also been used to sell collectibles like sports cards, particularly popular in the NBA. In February 2021, Los Angeles Lakers star LeBron James sold a digital trading card of himself as an NFT for $200,000.
4. Domain names
Nonfungible tokens can also be used to sell domain names like crypto kitties did in 2017 when it sold CryptoKitties.co for 600 ETH ($170,000).
5. Real estate
Blockchain technology makes it easy to create and own virtual land or property. You can buy virtual real estate in online games or virtual worlds like Decentraland or The Sandbox and sell it for a profit later on.
How to create an NFT marketplace?
There are several steps involved in developing an NFT marketplace:
- Identify the subject matter of your marketplace
- Create a business model based on the subject matter selected
- Find a developer/developers to build the marketplace website on Ethereum or other blockchains
- Learn how to create your NFT
- Create your tokens (NFT) for items you want to sell on your marketplace
- Add your tokens to your marketplace and start selling
Non Fungible tokens (NFTs) are a buzzy topic in the crypto world, and for a good reason. NFTs are digital assets that can’t be replaced by something identical, unlike traditional currencies like Bitcoin.
As the NFT market explodes, new opportunities for businesses emerge. A marketplace for NFTs is an excellent opportunity for companies looking to invest in the crypto space.