How to Create An NFT Marketplace – A Step-by-Step Guide
Last Updated on September 8, 2022
According to NonFungible.com, the total capital of large NFT projects increased by more than 2,100% in the first quarter of 2021, while the overall market growth last year was only 300%.
Many NFT tokens go on sale right away, with the most popular ones selling for around $70 million. And that is not all — several celebrities are supporting the NFT market by turning their music, images, memes, videos, logos, codes, etc., to the NFT.
This benefits the websites that serve as an NFT trading platform the most, making buying and selling of NFTs easy and accessible for everyone.
This article will outline
- What is NFT
- Where it can be applied
- How to develop your NFT Marketplace
- How much does it cost to build NFT Marketplace app
Let’s start with the basics.
What Are NFTs?
Non-fungible tokens or NFTs are digital tokens designed to function as digital certificates of ownership of physical or virtual assets such as photos, videos, tweets, codes, etc. Each NFT is a unique, immutable and indivisible digital asset. . Which means that NFTs cannot be sold or used as a payment method because they are different from Bitcoin and Ethereum.
For example, the Cryptopunk 4250 NFT is proof of ownership of a unique character in the digital world, a pixelated image of a punk woman wearing welding goggles with tousled hair and purple lipstick, as described. This lot is being sold at Larva Labs for $116,913.
Another example of NFT is an image of a pretty girl smiling in front of a burning house. This photo is called a “disaster girl” meme, and 21-year-old American Zoe Roth (the girl in the picture) sold the meme for $500,000.
As you can see, NFTs can make huge amounts of money. Some tokens are more attractive, and people tend to use them more, while others sell very cheaply.
Thus, it’s simple, if the token is famous, it will be sold expensively. Here are some examples of NFT lots:
- People’s digital collage ‘Every Day: The First 5000 Days’ auctioned off at Christie’s for $69 million.
- The first tweet sold for $2.9 million.
- Nyan Cat Animated Film sold for $590,200.
- CryptoKitties Cat Sold For $172,000
Properties Of NFT Tokens
- Indivisibility: Non-fungible tokens cannot be split into smaller pieces.
- Authenticity: Their authenticity can easily verify information about tokens and their owners.
- Non-interoperability: Each token is unique and cannot be exchanged for these items.
- Traceability: NFTs can be traded on various cryptocurrency exchanges. Thus, owners can benefit from these advanced trading systems. The grouping, trading and market selling capabilities open up endless possibilities for NFT holders.
- Interactivity: Thanks to the ERC 721 token and the best ERC 1155 token, it is possible to interact with multiple ecosystems. Both standards allow for the creation of NFTs for digital collectables.
- Liquidity: The fact that non-fungible tokens can be traded instantly increases liquidity. The target audience of various NFT trading platforms ranges from beginners to hardcore traders. This means more buyers can use digital assets.
- Programmability: Non-reversible tokens are fully programmable, just like any other digital asset. Today’s NFTs often involve complex mechanics that can include fabrication, forging, and random generation. The design space has endless possibilities.
- Scarcity: Smart contracts allow developers to severely restrict NFT proposals. Coders can apply certain properties that cannot be changed once the NFTs are launched.
What Is An NFT Marketplace?
NFT Marketplace is an online marketplace that sells various high-priced cryptocurrency items through auctions. In this Marketplace, producers sell non-fungible virtual products, and buyers or investors use cryptocurrencies such as Bitcoin or Ethereum to purchase them.
The NFT Marketplace charges a fee for each transaction that purchases NFTs on the platform.
After purchasing NFT, the buyers or investors receive tokens. Here, a token is a unique identifier consisting of proof of ownership and information about its author, origin and authenticity.
On the NFT Marketplace, buyers can bid on hosted auctions to purchase different types of artwork, in-game assets, fashion accessories, memes, and many other items on the Internet.
How Does An NFT Marketplace Work?
Before we dive into how an NFT marketplace is created, it is important to understand how the NFT marketplace functions from a client’s point of view. In general, all NFT platforms use a similar workflow.
First, users need to register on the platform and install a digital wallet to store their NFTs.
It’s only after that users can then create assets by uploading items to showcase their work. Users can also choose which payment tokens to accept for their work and set fees if the platform offers them.
The next step in the workflow is to list the items for sale. Users can choose to bid on a fixed price or auction. When selling an item, a transaction is created to initiate a private transaction smart contract on the user’s wallet.
The platform may need to reconcile the collection, and the NFT will appear on the list once approved.
Key Niches Of NFT Marketplace
Several NFTs are used to make money with various digital art. From digital copies of real photos to memes. For example, you can buy, sell, and send images, videos, GIFs and music on the OpenSea platform. The platform runs on Ethereum and builds NFTs using the ERC721 and ERC1155 protocols.
However, the arts aren’t the only niche where NFTs can be applied. As a matter of fact, they can be used to trade collectibles (NBA Top Shot), game characters (CryptoKitties), virtual properties (Mintable), virtual worlds (Metaverses), investment offers, and any other sector whose ownership can be converted into tokens. Most importantly, you should create a marketplace that fits your own needs.
For example, you want to develop an NFT art marketplace, so you usually need to develop an online store. The backend must process, store, sell and exchange NFTs, and it’s relatively simple.
If you want to have an NFT platform for real estate transactions, you have to develop something like Zillow or Trulia. These platforms work with MLS databases and find user locations and more.
Other niches where NFTs would be highly successful:
- Online education: These markets should offer a wider range of online learning services. This includes selling entire courses, tracking progress, and talking to teachers.
- Investment Projects: These NFT trading platforms should function as stock markets for asset trading. They must be able to issue legally enforceable assets along with property rights, dividends and shares.
- Security: Required tokens can act as keys for various content, programs, databases, operating systems, or events. To sell these NFTs, the platform must focus on security measures and support Touch ID, Face ID, Eye ID, etc.
- Video games: The sale and purchase of NFTs, representing various in-game items and characters, are usually done in-game or on external online platforms such as Steam, which guarantee secure transactions. This presupposes tight integration with the game.
The Key Features Of NFT Marketplace
The NFT Marketplace combines the capabilities of an auction, an online store and a blockchain platform to issue non-fungible tokens. Users should be able to create and sell their NFT products. A user-friendly marketplace also provides additional features to attract and retain more customers and improve the overall user experience on the platform. When developing your own NFT marketplace, consider starting with:
- Shop window: This feature allows the user to see all essential information about the lot (title, price, description, owner, payment method, rating, etc.). Some NFT marketplace even provide additional information about blockchain & token protocols so that users can verify that they have an NFT which is Valid or not,
- Search Engine: Make sure that users can easily find what they are looking for. We recommend categorizing the different resources into categories such as art, photos, videos, domes, memes, music, etc., to make it easier for users to navigate the platform. In fact, filters help them sort items, especially if there are many similar items.
- Sign-Up & Log-In: To sell and buy NFTs on the platform, users need to create an account. The registration process is usually done via email, phone number or social media account. In general, users are required to display their accounts in cryptocurrency. If not, sign up with Metamask, MyEtherWallet, Coinbase Wallet or any other cryptocurrency wallet.
- Creating Ads: This process should be simple and fast. Ideally, it should be similar to what it’s like on eBay. For best results, try creating something like an OpenSea collection manager. It helps specify product downloads, titles, prices, descriptions, tags, external links, and other features.
- NFT Wallet: Users need a wallet to send, receive, and store NFT tokens and cryptocurrencies. The simplest solution is to integrate with a popular cryptocurrency wallet. Most importantly, the wallet supports the NFT protocol. When talking about such wallets, the names that often pop up are — Metamask, MyEtherWallet, Coinbase, and WalletConnect.
- Trading History: There is usually an NFT Marketplace section where users can track their transactions. This will help you understand how popular the platform is, what products are sold, and at what price. For example, OpenSea’s transaction history includes data such as event, name, price, buyer, seller, and date.
- Reviews and Ratings. Indicates whether the user praises the lot/seller. This information will help you evaluate a specific lot. Generally, the rating is between 1 and 10. Reviews are like comments that subscribed users can leave. Both parties may leave a cancellation after the transaction is closed.
- Notification: You can design a push notification system that notifies users about new bids, status changes, new posts, lots on sale or NFT platform updates in their preferred category or store.
- Support: This is an important aspect of any trading platform. Support services help users find answers and resolve problems and conflicts. It could be in the form of a call centre or email support, an information platform or even a chatbot.
7 Steps to Creating An NFT Marketplace App
The trading platform for buying and selling NFTs is complex software, so developers should have a lot of experience like OyeLabs. Since 2015, we have been helping a variety of companies and people to launch fintech and blockchain projects, and we would love to help you out with your NFT Marketplace as well.
Talking about the development of the NFT marketplace, it requires the following steps:
Step 1. Starting The Project Itself
In the first phase of the launch of the NFT trading platform, you and the developer should study the details of the project and evaluate the technical aspects and general concepts.
To gain a better understanding of the same, here are the questions to need to answer beforehand:
- What is your niche?
- How to sell NFT?
- Who is your target audience?
- Which token protocol do you want to use?
- What technology stack would you like to implement?
- What is your monetization model?
- How is your platform different from existing ones in the market?
- What features would you like to see in your platform?
The answers to this question will guide the development process and help determine the nature of the NFT market.
If you have trouble answering these questions, don’t worry. Our developers will help you out as much as a tech partner possibly can. They can translate your ideas into text or diagrams and prepare technical documentation to start building your project.
When the full concept and specification are ready, developers can develop a plan and estimate the time and budget needed. Then you can start creating your project.
Step 2. The Development Process
Once the technical aspects and plans are discussed, the app development team can get to work. First, with a business analyst or designer, you create the basic concept of your app’s user interface, including all the frameworks, templates, and prototypes, and then explain the user flow and functionality. Then an effective architecture of the trading platform is created.
Step 3. UX/UI Design
Navigation and user experience are very important to the NFT marketplace as first impressions, usability, and user experience depend on the NFT market. So, be sure that your design will appeal to your audience and that it will be simple enough for everyone to understand how to use it. It should remind you of Amazon or eBay.
Step 4. Backend and Smart Contracts
At this level, the backend developers do the job. Much important business logic and market functions have been developed here, including blockchains, smart contracts, wallets, and auction engines (many NFTs are sold at auctions).
Step 5. Front-end
This is the external part of the trading platform that is responsible for user interaction. The main focus of front-end design is to provide a simple interface, security measures, and performance.
Step 6. Product Testing
During this phase, several test cycles are performed to ensure that the platform is functioning properly. The QA team goes through multiple review cycles to ensure that the project is free of critical issues or bugs. It also tests content, usability, security, reliability, and performance in a variety of scenarios.
Step 7. Platform Release + Support
Once the testing is complete, it’s time to launch the NFT platform on our cloud servers. This is not the last step as we need to organize the work of the help desk. It would help if you also planned for further development of the platform to meet market trends and user requirements.
Technology Stack For An NFT Marketplace Platform
- Cloud hosting platforms– Amazon Web Services (AWS), Machine Learning (ML), Elastic Compute Cloud (EC2), Relational Database Service (RDS), and Simple Storage Service (S3), Filecoin and InterPlanetary File Systems (IPFS).
- Database management systems– MongoDB, MySQL, and PostgreSQL
- Front-end and back-end frameworks- React.js, Express.js and Node.js
- Smart contract deployment tools– Drizzle, Ganache, Truffle, Brownie, Hardhat, and OpenZeppelin
The development of the NFT market is a new trend with an ever-increasing value. As the value of non-fungible tokens rises, the platform attracts more and more users due to its attractive features. It is advised to launch a basic MVP with the only required features and to later introduce additional features as per user feedback.
Additionally, investors are increasingly choosing blockchain platforms because of their high trend graphs. Therefore, the opportunities for the NFT market shortly are quite large. And for this very reason — we highly urge you to get your NFT platform built and make millions and billions of dollars using other people’s art.