How Can You Create An NFT Marketplace in 2023: Comprehensive Guide

The most popular NFTs are tokenized reproduction of music, pictures, memes, video, logos, and computer code.

In the first quarter of 2021, the combined market capitalization of large NFT projects increased by 2100%. The market grew by 300% last year. Most of the NFTs were sold immediately, and some of them were purchased for nearly $70 million

NonFungible.com

At the same time, the main beneficiaries of the NFT market are the websites that provide opportunities for quick purchase and sale of NFTs. In this article, we briefly review what NFTs are and where they can be sold, as well as how to develop your own NFT marketplace.

What is NFT?

A Non-Fungible Token, or NFT, is a digital token that acts as an electronic certificate of ownership of physical or movable assets such as photos, videos, tweets, computer code, etc. Each NFT is a non-fungible, undivided digital asset. This means that, unlike Bitcoin or Ether, NFTs are not identical, therefore, they cannot be traded or exchanged for an equivalent basis, and they cannot be used as a means of payment in a transaction.

For example, NFT CryptoPunk 7260 is a character ownership certificate that exists digitally and is described as a pixelated image of a punk woman with messy blond hair and red lips. This NFT is listed for sale on the Larva Labs marketplace for $335,000.

Another example of NFT is a picture of a cute girl smiling in front of a house on fire, which has become a disaster girl meme. 21-year-old American Zoe Roth sold this meme for $500,000.

As it turned out, NFTs can bring excessive amounts of money. Some NFTs, of course, are a bigger piece of pie as people are willing to pay large sums for them, while other NFTs are sold for pennies. The principle of value formation in this business is simple: the more famous (more in demand) the lot is, the more expensive it is.

Here are some more examples of using NFT lots:

• Beeple’s digital collage “Every Day: The First 5,000 Days” was sold at Christie’s auction for a $69 million.
• The Twitter CEO’s first tweet was sold for $2.9 million.
• The animated film Nyan Cat was sold for $590,000.
• A kitten from CryptoKitties was sold for $172,000.

Why Are NFTs Popular?

NFTs or Non-Fungible Tokens are popular for several reasons:

1. Unique digital ownership: NFTs allow individuals to own unique digital assets such as art, music, videos, and other forms of creative content. This ownership is recorded on a blockchain, making it immutable and transparent.
2. Scarcity: NFTs can be created in limited quantities, making them scarce and valuable. This scarcity can drive up prices, making NFTs a lucrative investment opportunity.
3. Authenticity: NFTs provide a way to authenticate digital assets and prevent piracy. This can be especially important for artists and creators who rely on their work for income.
4. Cultural significance: NFTs have become a part of popular culture, with celebrities and influencers endorsing them. This has helped to increase their popularity and mainstream acceptance.

Why to Create your own NFT Marketplace

If you build an NFT marketplace on your own, you will gain complete control over the platform, its features, and the user experience. It also allows you to generate revenue through transaction fees and potentially increase the value of your own NFTs by providing a dedicated platform for their sale.

Additionally, creating your own NFT marketplace can help you establish yourself as a leader in the NFT space and attract a community of artists and collectors who are interested in your platform.

How Do NFT Marketplaces Work?

From the client side, NFT marketplace websites work like regular online stores. The user needs to register on a platform and create a personal digital wallet to store NFTs and cryptocurrencies. The user can then either use the listing to purchase NFTs or create their own token. Placing an NFT is usually simple and similar to creating an eBay listing. You need to specify the name, price, give a description and an image, photo, video, GIF, and the like.

Unlike Bitcoin or Ethereum, you cannot directly trade non-fungible tokens on regular crypto-exchanges. To buy and sell NFTs, you need dedicated eCommerce platforms that allow you to issue, hold, and trade non-fungible tokens. Now this market is dominated by large marketplaces: Axie, OpenSea, Rarible, Superfarm and Mintable.

They generate NFTs using special smart contracts that add a set of unique information (metadata) to each such token and prescribe its main parameters (name, immutability, inseparability, address/ID, etc.). After that, non-fungible tokens can be bought and sold on the site at a fixed price or through the bid system.

Key Features of an NFT Marketplace

The NFT marketplace combines the functions of an online store, an auction, and a blockchain platform for issuing non-fungible tokens. Administrators should be able to create their own NFT products and sell them. In addition, these marketplaces should offer some features to attract and retain customers, as well as improve the quality of their service. When developing your own NFT marketplace, it is better to start by implementing the following things.

• Storefront. This function provides the visitors of the platform with all the necessary information about the lot: name, price, description, preview, owner (vendor), purchase method, rating, etc. Some NFT marketplaces also provide information about the blockchain and protocol of the token so that users can verify the authenticity of purchased NFTs.

• Search. Make sure your users can easily find the item they are interested in. It would be nice to split all assets into several categories such as art, photography, videos, domains, memes, and music to make it easier for users to navigate the NFT store listing. Filters also make navigation easier, especially if there are a lot of similar items on the platform.

• Registration and Login. To be able to buy or sell NFTs on the platform, the user must create an account. Typically, the registration process goes through an email, phone number or social media accounts. In addition, the user is also usually prompted to provide their cryptocurrency address or use links to cryptocurrency wallets, such as Coinbase Wallet, Metamask, or MyEtherWallet.
• Listing. This process should be simple and not take much time. Ideally, it should be the same as on eBay. To achieve this, you need to think about the optimal customer journey and implement something like the OpenSea collection manager. It helps to quickly upload a product to the site and specify the properties of the token, such as name, price, description, tags, external link, and so on.
• Wallet for NFTs. Users need a wallet to send, receive and store non-fungible tokens and cryptocurrencies. The easiest way to do this is to provide integration with popular crypto wallets. The main thing is that such wallets support the NFT protocol you need. Usually these are wallets such as Metamask, MyEtherWallet, Coinbase Wallet, and WalletConnect.
• Purchase history. Usually, an NFT distribution websites should have a tab where the user can view their purchase history. So you can understand how popular the site is, what they sell on it and at what price. For example, on Rarible, the history includes the following data: event, product name, bid, buyer, seller, and date.

• Reviews and ratings. Show that lots or the seller/buyer are popular among the visitors. This information helps users evaluate contractors and specific lots. Typically, the rating is implemented in the form of a numerical rating of the product or likes. Reviews can be implemented both in the form of comments posted by registered users, and in the form of reviews left by the transaction members. .
• Notifications. You can implement a push notification system to inform users about new bids in a selected category or from a selected seller, a status change on a featured item, a new message, a sale of your own lot, or an update to the NFT trading platform.

How smart contracts work in NFT marketplaces

What about the inner nature of the NFT marketplace? The veins ensuring all the life of such a site are smart contracts. Smart contracts play a crucial role in facilitating transactions and ensuring the security and authenticity of digital assets in NFT marketplaces. Below are the most essential activities that smart contracts are responsible for:

1. Creation of NFT: When an artist or creator wants to mint and sell an NFT, they typically interact with a smart contract deployed on a blockchain network, such as Ethereum. The smart contract defines the rules and properties of the NFT, including its unique identifier, metadata, and ownership details.
2. Minting and ownership: The smart contract mints the NFT by assigning it a unique token ID and associating it with the creator’s wallet address. This establishes the initial ownership of the NFT. The smart contract also maintains a record of all token IDs and their corresponding owners.
3. Listing and selling: Once the NFT is minted, the creator can list it for sale on the marketplace. The smart contract may include functions for setting a price, specifying royalty fees, and defining other terms and conditions for the sale. Potential buyers can browse the marketplace and interact with the smart contract to initiate the purchase.
4. Transaction execution: When a buyer wants to purchase an NFT, they send a transaction to the smart contract, including the required payment and any additional details specified by the contract. The smart contract verifies the payment and transfers ownership of the NFT from the seller’s wallet to the buyer’s wallet. This transfer is recorded on the blockchain, ensuring transparency and immutability.
5. Royalties and secondary sales: Smart contracts can also include royalty mechanisms that automatically distribute a percentage of subsequent sales to the original creator. Whenever an NFT is resold on the marketplace, the smart contract executes the royalty payment to the creator’s wallet based on the predefined terms.
6. Verification and authenticity: Smart contracts can store and verify the authenticity of NFTs by linking to their metadata and associated content, such as images, videos, or music files. This ensures that the NFT is genuine and not a counterfeit or copy. Buyers can verify the authenticity of an NFT by interacting with the smart contract and examining its associated metadata.

To summarize, smart contracts provide the underlying infrastructure and logic that enables secure, transparent, and automated transactions in NFT marketplaces, ensuring the integrity of digital assets and protecting the interests of creators and buyers.

Tech Stack for a Crypto NFT Marketplace App Development

If smart contracts are the veins of an NFT marketplace, there should be other vital organs ensuring its work. The NFT marketplace organism operates thanks to an orchestrated work of the tech stack. For an NFT Marketplace App Development, it typically involves the following:

1. Blockchain Platform: Ethereum, Binance Smart Chain, or any other blockchain platform that supports NFTs.
2. Smart Contract Language: Solidity, Vyper, or any other programming language that can be used to write smart contracts for the chosen blockchain platform.
3. Web3.js: A JavaScript library that provides a way to interact with the blockchain platform and smart contracts from a web application.
4. IPFS: A decentralized file storage system that can be used to store NFT metadata and assets.
5. Front-end Framework: React, Angular, or any other front-end framework that can be used to build the user interface for the NFT marketplace.
6. Back-end Framework: Node.js, Django, or any other back-end framework that can be used to build the server-side logic for the NFT marketplace.

Having all these parts in place ensures that your app will run fine and provide you with the required outcome.

Key Niches Of NFT Marketplace

Most NFTs are used to commercialize all kinds of digital art, from digital copies of real paintings to memes. For example, on the OpenSea marketplace, you can buy, sell, and transfer images, videos, GIFs, and music. This platform runs on Ethereum and issues NFTs using the ERC721 and ERC1155 protocols.

But fine art is not the only area of application for non-fungible tokens. They can also be used to trade collectible cards (NBA Top Shot), game characters (CryptoKitties), real estate (Mintable), virtual worlds (Metaverses), investment offers (Spencer DINVIDDI contract), and any other area where ownership is involved. The main thing is to create a marketplace that will be able to work with the right of ownership you need.

For example, if you want to develop an NFT marketplace for fine art trading, then you essentially need to create a regular online store, the back end of which should be able to issue, store, sell, and exchange NFTs. It’s relatively simple. If you need an NFT platform for real estate trading, then you will need to create an analogue of Zillow or Trulia. Such sites should be able to work with MLS and state register databases, determine the user’s location, etc.

And so it is with every area. Here are some more examples:

• Online education. Such marketplaces should provide a full range of services for remote education – from selling a course to tracking the progress and communicating with teachers.
• Investment projects. This kind of NFT marketplace should function like a stock market for trading equities. That is, they must provide the possibility of issuing legal equities with the right to property, dividends or a share in profits.
• Security. Non-fungible tokens can act as access keys to a content, program, database, operating system, or event. In order to sell such NFTs, the marketplace must be as secure and reliable as possible, as well as support popular buyer-side security tools (Touch ID, Face ID, Eye ID, etc.).
• Video games. The sale and purchase of NFTs being unique game items or characters, usually takes place either inside the game (for game money) or on external online platforms that guarantee a safe exchange of real money for a game asset (like on Steam). This implies very close integration with the video game

How to Make Money with NFT Marketplace?

Here are some ways to make money with NFT marketplace:

1. Create and sell your own NFTs – If you are an artist, musician, or content creator, you can create your own NFTs and sell them on the marketplace. You can earn money through the sale of your NFTs and also earn royalties every time your NFT is resold.
2. Invest in NFTs – You can buy NFTs from other creators and resell them for a profit. You can also hold onto them and wait for their value to increase over time.
3. Participate in NFT auctions – Many NFT marketplaces hold auctions where you can bid on unique and rare NFTs. If you win the auction, you can resell the NFT for a profit.
4. Become an NFT marketplace affiliate – Some NFT marketplaces offer affiliate programs where you can earn a commission for every sale made through your referral link.
5. Build your own NFT marketplace and earn from commission fees of vendors.

For example, on Rarible, anyone can create and sell their digital assets on their platform for free, but they charge a 2.5% fee for each transaction. OpenSea earns revenue by charging a 2.5% fee on all successful sales made on their platform. They also offer other services like gas-free minting, premium features for creators, and custom integrations for a fee. You can repeat their monetization models, creating your own online venture and introducing some innovations. NFT marketplaces are still a relatively new and rapidly evolving concept. It’s important to do your research and stay up to date with the latest trends and developments in the market.

NFT Marketplaces Trends

In recent times, NFT Marketplaces have seen tremendous growth and adoption, with several new platforms emerging.

Some of the trends in NFT Marketplaces include:

1. Cross-chain and multi-chain NFTs: With the increasing adoption of blockchain technology, NFT Marketplaces are now exploring cross-chain NFTs that can be traded across multiple blockchain networks.
2. Fractional ownership: NFT Marketplaces are also exploring fractional ownership, where multiple investors can own a share of an NFT, making it more accessible to a wider audience.
3. Gaming and virtual worlds: NFT Marketplaces are also exploring the use of NFTs in gaming and virtual worlds, where players can buy and sell unique in-game assets.
4. Social media integration: NFT Marketplaces are also integrating with social media platforms, allowing creators to showcase their NFTs to a wider audience.
5. Sustainability: NFT Marketplaces are also exploring ways to reduce the carbon footprint of NFT transactions, with some platforms using eco-friendly blockchain networks.

NFT Marketplaces are in their early stages, and we can expect to see more innovation and growth in this space in the coming years.

Top 6 NFT Marketplaces

Nowadays, the top 5 marketplaces are already defined. Let’s see them and study why they are popular.

1. OpenSea – OpenSea is the largest NFT marketplace, with over 4 million items listed for sale. It is popular because it offers a wide variety of NFTs, from digital art to gaming items.
2. Rarible – Rarible is a popular NFT marketplace that allows creators to mint their own NFTs. It is popular because it offers a high level of customization and control for creators.
3. SuperRare – SuperRare is a curated NFT marketplace that focuses on high-quality digital art. It is popular because it offers a high level of curation and exclusivity.
4. Nifty Gateway – Nifty Gateway is a popular NFT marketplace that focuses on limited edition drops from popular artists and celebrities. It is popular because it offers a high level of exclusivity and collectibility.
5. Foundation – Foundation is a curated NFT marketplace that focuses on digital art and collectibles. It is popular because it offers a high level of curation and exclusivity.
6. Axie Marketplace is a platform where players can buy, sell, and trade Axies, which are digital creatures that exist on the blockchain. Axies are used in the game Axie Infinity, a blockchain-based game that allows players to battle, breed, and trade their Axies. Axie Marketplace is a decentralized platform, as there is no central authority that controls it. Instead, it is powered by smart contracts on the blockchain, which ensure that transactions are secure and transparent.

How to Create an NFT Marketplace in 5 Steps

Although the NFT Olympus is already occupied, there is still room for newcomers capable of offering some new approach or idea. If you strive to become the next OpenSea, you should follow these five general steps to create an NFT marketplace:

1. Choose a blockchain platform: Decide which blockchain platform you want to use to create your NFT marketplace. Ethereum is the most popular platform for NFTs, but other options include Binance Smart Chain, Polkadot, and Flow.
2. Develop smart contracts: Create smart contracts that will be used to manage the creation, sale, and transfer of NFTs on your marketplace. You can either create your own smart contracts or use existing ones.
3. Build a frontend: Develop a frontend interface for your marketplace where users can buy, sell, and trade NFTs. This can be done using a web framework like React or Angular.
4. Integrate a payment gateway: Integrate a payment options for NFT projects that supports cryptocurrency payments, such as Coinbase or BitPay. This will allow users to buy and sell NFTs using cryptocurrency.
5. Launch and promote: Once your marketplace is complete, launch it and start promoting it to potential users. This can be done through social media, email marketing, or paid advertising.

Note that creating an NFT marketplace can be a complex and time-consuming process, so it may be helpful to seek out resources and guidance from experienced developers and blockchain experts.

NFT Marketplace Development Cost and Timelines

The cost and timeline for NFT marketplace development can vary depending on the complexity of the project, the features required, and the development team’s experience and rates. Some factors that may affect the cost and timeline include:

• Design and UI/UX: A more complex and custom design may take longer to develop and cost more.
• Smart contract development: NFTs are based on smart contracts, which can be complex to develop and test. The cost and timeline for smart contract development will depend on the complexity of the contract.
• Security and testing: Security is crucial for any marketplace and can vary depending on the level of security required.
• Integration with blockchain: It may require additional development and testing.

Challenges in Creating NFT Marketplace

1. Scalability: As NFTs become more popular, the number of transactions on the blockchain increases, leading to scalability issues. The NFT marketplace needs to be able to handle numerous transactions without slowing down or crashing.
2. User Interface: The user interface of the NFT marketplace should be user-friendly and easy to navigate. It should be designed in such a way that users can easily find and purchase NFTs.
3. Security: Security is a critical concern in any blockchain-based application. The NFT marketplace should be secure enough to prevent hacking and protect user data.
4. Legal Issues: There are still some legal gray areas surrounding NFTs, and the NFT marketplace needs to comply with local regulations and laws.
5. Technical Complexity: Developing an NFT marketplace requires a deep understanding of blockchain technology, smart contracts, and decentralized applications.

These are just a few of the challenges that developers face when creating an NFT marketplace. Overcoming these challenges requires a combination of technical expertise, creativity, and innovation.

Blockchain Platforms Simtech Development Recommends

Simtech Development is a software development company that specializes in eCommerce solutions and blockchain development. We offer blockchain development services for various industries including healthcare, finance, and supply chain management.

Here are some blockchain platforms that Simtech Development recommends:

1. Ethereum – a decentralized blockchain platform that enables developers to build decentralized applications (dApps).
2. Hyperledger Fabric – a permissioned blockchain platform designed for enterprise use cases.
3. Corda – a distributed ledger platform designed for businesses to transact directly with each other.
4. Stellar – a decentralized payment network that enables fast and low-cost transactions.
5. EOS – a decentralized blockchain platform that enables developers to build dApps with high throughput and scalability.

These platforms have their own advantages and disadvantages, and the choice of platform depends on the specific use case. 

CS-Cart as the foundation for building an open-source NFT marketplace

CS-Cart provides a robust foundation for building online marketplaces. While it can be used as the basis for building an NFT marketplace, it still requires customization and integration with blockchain technologies to support the unique features and functionalities of NFTs.

To build an NFT marketplace using CS-Cart, you would need to consider the following steps:

Building an NFT marketplace using CS-Cart requires a deep understanding of blockchain technologies, smart contracts, and the specific requirements of NFTs. It would also involve significant development efforts and the expertise of blockchain developers to ensure a secure and functional marketplace. 

Tips to Succeed with an NFT Marketplace

1. Choose the right platform: There are several NFT marketplaces available, each with its own set of features and benefits. Choose a platform that aligns with your goals and objectives.
2. Create unique and valuable NFTs: The success of your NFT marketplace will depend on the quality and uniqueness of your NFTs. Create NFTs that are valuable and appealing to your target audience.
3. Build a community: Building a community around your NFT marketplace is crucial for its success. Engage with your users, create social media accounts, and promote your NFTs to attract more buyers.
4. Establish a pricing strategy: Setting the right price for your NFTs is crucial for their success. Research the market and set prices that are competitive and reasonable.
5. Offer incentives and rewards: Offering incentives and rewards to your users can help drive engagement and increase sales. Consider offering discounts, bonuses, or exclusive access to certain NFTs.
6. Provide excellent customer support: Providing excellent customer support is crucial for building trust and loyalty with your users. Respond to inquiries promptly and provide helpful and informative responses.
7. Stay up-to-date with the latest trends: NFT marketplaces are constantly evolving, so it’s important to stay up-to-date with the latest trends and developments. Keep an eye on industry news and updates to stay ahead of the curve.

Summary

Remember, creating a successful NFT marketplace takes time, effort, and dedication. By following our tips and staying up-to-date with innovations and developments in the industry, you can increase your chances of success. The Simtech Development company can be a reliable technology partner for you here, keeping all the development work on our side and leaving you a free room for creation and management.

FAQ About NFT Marketplaces