While conventional cryptocurrencies like Bitcoin are fungible and have standardized features that make them suitable for use as a medium of exchange, NFTs possess a non-fungible attribute that allows them to identify any item uniquely.
Using NFTs, creators can provide proof of existence and ownership for various digital assets such as videos, images, digital art, event tickets, and more. Storing actual content as a URI string in metadata has opened the doors to a new blockchain ecosystem focused on the ownership of digital assets, mainly through a crypto wallet.
This, combined with the benefit of enhanced liquidity, traceability, and interoperability, explains why the value of the NFT market has skyrocketed in recent years — with the NFT market projected to surpass US$122 billion by 2028.
While NFTs have distinguished themselves from traditional cryptocurrencies by offering excellent intellectual property protection (IP)—the proliferation of multiple token types, such as access, security, crypto-collectibles, and identity tokens, may be the catalyst for a tokenized future and could bring about a significant shift in how we value commodities and assess economic structures.
If you're interested in gaining knowledge about developing an NFT Marketplace, look at our previous article: NFT Marketplaces: Key Considerations and Challenges.
Delving into the NFT Industry
NFTs' applications span multiple fields, including art, cryptocurrency, games, and intellectual property, categorized into Art-NFT, FI-NFT, Game-NFT, and IP-NFT. Nonetheless, NFTs' core concepts include authenticity perception and value accumulation through ownership. Like trading cards, NFTs gain their collectible nature from being rare, having expected future value, and, more recently, offering utility.
The inception of utility has significantly broadened the scope of NFT usage beyond their traditional domains in gaming and art. The newfound ability to perform various functions, such as granting access privileges and verifying the authenticity of digital assets, has revolutionized the perception of tokens. NFTs have transformed into versatile tools, capable of serving as event or airline tickets, identification cards, and even title deeds.
The Rising Popularity of NFTs: Reasons Behind the Surge
More and more corporations are finding success with NFTs, as reported by numerous sources. For instance, after a successful initial launch, Starbucks has now released 5,000 NFT collectibles, while Nike has made its first digital art NFT drop of virtual sneakers inspired by Nike Air Force 1. Over 330,000 Swoosh members have signed up to mint their own OF1 boxes, highlighting the burgeoning interest in digital assets. Several factors can be credited for the rise of NFTs and NFT Marketplaces.
NFTs offer artists and creators a new revenue stream by allowing them to sell art directly to fans which is particularly attractive to independent artists who traditionally relied on galleries and record labels to distribute and sell their work.
The transparency and security of decentralized systems make NFTs a trusted and reliable way to sell and authenticate digital assets.
NFTs allow artists and creators to establish a direct relationship with NFT collectors by enabling fans to purchase and own a unique piece of their work. This setting creates a sense of exclusivity and ownership that can drive engagement and loyalty.
As the popularity of NFTs grows, so has the need for an online platform where creators and collectors can buy, sell, and trade them. NFT marketplaces emerged quickly to fill this gap, offering a secure and efficient way to deal with NFTs.
Today, there are a plethora of NFT marketplaces that cater to different niches and audiences, each with its unique features, benefits, and limitations.
Introduction to NFT Marketplaces: What is an NFT Marketplace?
Growing attention to the NFT market has garnered considerable attention in the Web3 industry. Creators are eager to seize the opportunity, and a wave of developers are crafting solutions to meet the needs of this expanding market. Blockchain platforms such as Opensea have emerged among industry leaders in responding to this need, providing a user-friendly and secure way for collectors and traders to buy, sell, and exchange NFTs.
Tips for Choosing an NFT Marketplace
In the token market, items are typically organized into collections or collectibles, which consist of sets of NFTs sharing specific characteristics. For example, NFT collections include collectible trading cards, music albums, event tickets, digital art pieces, and virtual worlds in online games. These collections generally fall into six categories: Art, Collectibles, Games, Metaverse, Other, and Utility NFTs.
Read this article, A Beginner's Guide to NFTs in The Events Management Industry, for more insight.
When selecting an NFT marketplace, creators should consider specific factors to enhance their chances of success.
One factor to consider is the platform's business model. Is it a general marketplace like OpenSea, or a specialized marketplace like the Nifty Gateway NFT marketplace or the Rarible NFT Marketplace. Or the availability of utility NFTs, which offer practical uses and functionalities beyond their intrinsic value. By choosing a marketplace that supports utility NFTs, creators can tap into a wider range of potential buyers and enthusiasts. Another important consideration is the ability to create customizable NFTs. Platforms that offer customization options allow creators to add unique features and characteristics to their NFTs, making them more appealing and distinctive in the market.
Furthermore, creators should take a data-driven approach when choosing an NFT marketplace and carefully evaluate the marketplaces based on factors such as the type of NFTs, pricing mechanism, marketplace rules, and user base to maximize the chances of success.
When deciding, it can also be helpful to consider other factors, such as
Token Standards Used
Token standards outline the guidelines for constructing Non-Fungible Tokens (NFTs) within a specific blockchain protocol. The selection of a token standard on a platform plays a vital role in determining the interoperability and functionality of your NFTs. Therefore, it is essential to consider this factor as it directly impacts how your NFTs interact with other platforms and applications.
Within the Ethereum blockchain, token standards like ERC-721 and ERC-1155 are widely adopted. Similarly, other blockchains have their unique token standards. For instance, Tezos implements FA2, Solana utilizes SPL-Token, and the BNB Smart Chain (BSC) employs BEP-20.
Unique Network, a Substrate-based NFT chain designed for the Polkadot and Kusama ecosystems, employs PSP22 as its token standard. The platform has the ability to develop a powerful infrastructure for the next generation of NFTs and facilitates one of Unique Network's standout features - transaction sponsoring.
When choosing a token standard, carefully consider which platforms align best with your choice of NFTs, and select a marketplace that supports that specific standard.
It is feasible to create your own NFT marketplace?
NFT creators can build their independent marketplace, which offers greater control over the buying and selling process while circumventing the high transaction fees imposed by existing marketplaces. This gives creators a more direct and cost-effective approach to facilitating NFT transactions and engaging with their audiences.
Fortunately, various platforms now offer customizable templates, smart contract integration, and additional features that make it more accessible to create your NFT marketplace. Open-source solutions like Unique Network's SDK allow creators to create decentralized NFT marketplaces, even if they lack programming expertise, resources, or extensive technical knowledge of decentralized technology.
Selecting the Appropriate NFT Marketplace for a Successful Collection Release
When choosing a marketplace for your next collection drop, it's crucial to weigh the various options available. Popular NFT marketplaces offer various NFTs and a large user base. In contrast, niche marketplaces like Foundation specialize in a specific type of NFT and attract a more targeted audience.
While Ethereum is still leading in NFT marketplace options, knowing marketplaces on upcoming platforms such as Solana or the Flow blockchain is essential. By carefully weighing the pros and cons of every blockchain, developers can opt for the one that best suits their particular needs and objectives.
Before committing to a marketplace, it is imperative to consider the platform's features. Among other features, Unique offers streamlined NFT accessibility, customized NFTs, fractional tokens, multi-resource NFTs, and various others. Moreover, Unique's pioneering NFT bundling and nesting feature empowers users to generate bespoke connections between NFTs via a layered access management system.
In summary, performing thorough research and analyzing various marketplaces is critical to ensure the success and profitability of an NFT collection launch.
An Overview of the NFT Marketplace Development Process
In order to successfully develop Niche NFT marketplaces, several stages must be completed:
The first stage involves meticulous planning, where you define the marketplace's requirements. This includes branding, determining the type of NFTs featured, establishing pricing mechanisms, considering gas fees, ensuring seamless integration with digital wallets, and establishing platform rules to govern user interactions.
Following the design and planning phase, the development stage begins, where the technical aspects of the marketplace are built. This includes implementing smart contracts to facilitate the creation and management of NFTs, establishing a robust back-end database to store relevant information securely, and developing a front-end application that enables users to interact with the marketplace seamlessly.
Testing is a critical phase in the development process. It involves thoroughly assessing the functionality and performance of the marketplace, ensuring that all features operate smoothly and as intended for the target audience. In addition, rigorous testing helps identify and resolve potential issues or glitches, providing a high-quality and reliable marketplace experience.
Finally, after successful testing and refinement, it's time to deploy the marketplace and make it accessible to the public. This entails deploying the platform on a suitable hosting environment and ensuring its availability to potential users. Deploying the marketplace signifies the transition from development to an operational state where users can access and utilize it.
By following these stages, you can effectively develop an NFT marketplace that meets the needs of its users and provides a seamless and engaging experience within the dynamic world of NFTs.
Technical skills and resources needed for an NFT marketplace
Developing NFT marketplaces requires skills and resources, including blockchain development, smart contract development, web development, and user interface design. To build a custom NFT marketplace, the creator needs to have a team with experience in these areas, or they need to have the technical expertise themselves.
In addition, the creator needs access to the necessary resources to buy and sell NFTs, including servers, hosting, and other blockchain network infrastructure. Furthermore, building a custom marketplace can be a significant financial investment, with costs ranging from tens to hundreds of thousands of dollars, depending on the platform's complexity and the development team's size.
As is evident, the process could be clearer - to circumvent this issue. It may be simpler to contemplate a development platform for NFT marketplaces.
The Unique SDK provides developers with a readily available solution that simplifies building a fully operational NFT marketplace within a few hours. Besides Unique NFTs not requiring smart contracts, developers can leverage the provided SDK to significantly reduce infrastructure and setup costs. This makes it a highly cost-effective choice for building an NFT marketplace, allowing developers to save thousands of dollars.
By utilizing the SDK, setting up and maintaining the infrastructure becomes more streamlined and efficient, enabling developers to focus their resources on other critical aspects of their NFT marketplace. The cost-saving benefits of this approach make it an attractive option for those looking to create their own NFT marketplace without incurring excessive expenses.
Future of NFT Marketplaces
As the NFT market continues to flourish, choosing the right marketplace has become a crucial determinant of success for creators and consumers. With the evolution of this digital asset class, the future of tokenization holds great promise and potential.
As technological advancements accelerate and blockchain technology matures, we can anticipate a more diverse and robust ecosystem for NFT platforms, each catering to different niches and audiences. Interoperability between platforms will likely become a key feature in the NFT space, allowing for seamless trading and broader exposure of NFT assets. Unique Network's NFT marketplace fosters a more interconnected NFT ecosystem by supporting interoperability.
Amidst this dynamic landscape, the strategic selection of an NFT marketplace will become even more critical, necessitating careful evaluation of factors such as user base, transaction costs, community engagement, and platform governance. Ultimately, those who can embrace the opportunities and adequately navigate the challenges in the evolving NFT market landscape will be well-positioned to thrive in this exciting digital frontier.
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