How to Create an NFT Marketplace

How to stand out and offer people something unique? Consider an NFT marketplace development. NFT has been gaining massive popularity among artists and digital artists who produce art pieces that have no representation in a physical form.

Why can building an NFT platform become a perfect business idea? Let’s figure it out and discuss how to create an NFT marketplace.

What Does a Non-Fungible Token Mean?

A Non-Fungible Token is a unique identifier that is used to describe a digital asset. It cannot be copied as each NFT has a unique identification code. NFTs are stored on the blockchain, which performs the function of a ledger for tracing the transaction history of an NFT.

NFTs can be sold and purchased, so developing an NFT marketplace is a feasible idea.

No coding skills are required to build an NFT. You can easily do this using platforms such as OpenSea. Any photo, digital image, music, or in-game item can become a non-fungible token.

NFTs first hit the market in 2014. However, it did not become so popular till 2021, when the rapid growth of digital assets blew up the world. During this time, sales reached unbelievable points. One of the most expensive NFTs — “Everydays: The First 5000 Days” was sold for $69.3 million. The author of the piece, Mike Winkelman made 5000 photos and composed them into one art. As a result, his work brought him fame and a significant addition to his bank account.

The NFT trend is becoming mainstream, driving artists, and collectors to develop the industry. That’s why one of the best options to enter the market is to build an NFT platform.

Why Is Building an NFT Platform on People’s Minds?

Enthusiasts are attracted by several factors:

• Exclusivity
• Unified and unique tokens
• Ownership rights
• Transparency
• Security

All of this makes the idea of NFT marketplace development really appealing.

Proof of an NFT Marketplace Efficiency

Why is building an NFT platform a good idea? Here is proof that the idea is worth your attention.

NFT hype brings many opportunities to artists who by using technology can show their work to millions of people and sell them for millions of dollars.

It came to the point, that you can show your work even through the means of social media, for example creating AR masks on Snapchat and Instagram. Those masks are almost the most popular feature among the platforms’ users.

Celebrities join the trend and use NFTs to promote their brands creating buzz around the new concept. So launching an NFT marketplace in the upcoming year is certainly a good business idea.

This proves that NFTs are strengthening their positions in the market. OpenSea sales, for example, have surpassed $20 billion in five years.

Talking about the successful and pricey examples, NBA’s Top Shots, a trading card system (TCS), is worth over $230 million.

Many brands are developing NFTs presenting digital items to support their products and services and promote them. NFTs in gaming and arts are only becoming more expensive and popular. No wonder, more and more companies, and artists are joining this booming trend.

What Is an NFT Marketplace and How Does it Work?

So what is exactly an NFT marketplace and does it differ much from the regular marketplace?

Simply put, an NFT marketplace is an online platform for trading NFT items. As long as, NFTs are stored on the blockchain, the architecture of the platform may be different.

The base of such a marketplace is a smart contract or transaction protocol. This contract defines the agreement between a buyer and a seller. The agreement is executed as lines of code that run on a blockchain. Data is encrypted and stored across a decentralized, distributed, public network.

Let’s look at this in the example. If the buyer decides to buy an NFT product, they send cryptocurrency. In return, a seller-owner of the NFT grants the right to ownership. In case, every party meets the requirements, the contract handles the transaction independently.

It is important to have a built-in NFT wallet on the marketplace to ensure flawless and secure transactions.

Before starting the NFT marketplace development, let’s review its functionality in more detail. Consider several factors when developing an NFT marketplace.

First, both sellers and buyers need to complete the registration process, providing details according to Know Your Customer (KYC) compliance. It ensures that users are who they really say they are.

Sellers list their NFTs on the marketplace providing descriptions, names, and prices. What type of NFTs to list depends on the marketplace focus.

There are two scenarios your marketplace may follow. One is a standard way of selling the product — indicating the fixed price. So when the buyer sees an NFT they want to purchase, they simply do it. The other scenario is a bidding system which is commonly implemented on NFT platforms. In this case, there is an auction, where the highest bidder buys the item.

Benefits of an NFT Marketplace

What are the main benefits of an NFT marketplace?

1. Transparency

NFT marketplace is based on blockchain and the greatest feature of blockchain is complete transparency. This technology enables all transactions to be visible in a distributed database. They are traceable and unchangeable and parties can trade without an intermediary. What is more, no one can modify, change, or delete any data.

2. Decentralization

Blockchain enables another beneficial feature for NFT marketplaces — decentralization. A decentralized marketplace means that users do not depend on standard financial institutions. All transactions are made independently and automatically.

3. Indivisible Nature of NFTs

Each NFT item has its unique ID and this is what attracts users the most. An NFT product has its unique set of characteristics. Making them accessible through your marketplace provides a sense of exclusivity.

4. Reliability and Customer Loyalty

An NFT item is impossible to forge. The record of ownership is publicly available and can be checked anytime. Such secure and reliable platforms easily earn users’ trust. In addition, there is less chance to face fraud.

5. Security

Blockchain technologies are well-known for their high level of security. That’s why developing an NFT marketplace on the blockchain allows all the advantages of security features.

How to Create an NFT Marketplace

As with any development process, developing an NFT marketplace falls into several major stages. It is vital to note, the NFT concept is different from building a standard marketplace. Especially, technology-wise.

So, here is a step-by-step guide on how to build your own NFT marketplace.

1. Select the Niche

Start the NFT marketplace development process by choosing the niche. The list of popular NFTs includes digital artwork, game content, music, clips, GIFs, photos, tweets, and licenses.

When you focus on one niche you concentrate on the specific audience. That requires you to optimize the platform’s layout to the needs of the targeted users.

2. Select the Blockchain Network

As we defined earlier, blockchain technology is a database that tracks all NFT transactions related data.

Therefore an NFT marketplace must have a secure, robust, and scalable blockchain network. So do your research and find the best option out there.

Among the most popular blockchain networks, you’ll see such names as Ethereum, Stellar, and Tezos. Before you decide which one to use, look at these factors:

• Speed of a transaction;
• Cost of a transaction;
• Reliability of smart contracts;
• Fork-proof of the blockchain.

When making a choice, it is a good idea to focus not on the platform’s popularity, but on your needs and opportunities.

3. Choose Between Open and Closed Markets

Closed NFT marketplaces can only use a specific token, while open platforms support a wide range of tokens. For instance, the OpenSea marketplace works with more than 150 different payment tokens.

We suggest implementing an open market approach, as a closed one creates certain limitations.

4. Create a List of Advanced Features

Optimized functionality and a rich feature set that will distinguish your NFT marketplace from other platforms. There are some fundamental features you will need to implement (check out the next section). But there are also advanced features, that will provide users with more convenience and make their journey more exciting. This may include the 3D display, social media integrations, and many more.

5. Intuitive UI

NFTs still confuse users, so your marketplace should have an intuitive interface making it straightforward.

A great UI is a must for your NFT marketplace. It will ensure users can arrange hassle-free, secure transactions. Make the platform responsive, aesthetically pleasing, and user-friendly. That will help for a better display of the features and items on the marketplace.

Here’s a tip: an intuitive UI provides short tutorials and guides for newcomers. Your audience will appreciate the help.

6. Build a Secure Database and IPFS

What is IPFS? The InterPlanetary File System is a system for storing and sharing data in distributed networks or blockchains.

Building strong and secure database storage and IPFS is a critical step in NFT marketplace development. IPFS allows NFTs to distribute data of any size and format avoiding power-consuming storаge.

The database of the platform will store all the private data of users and admins.

Make sure the implemented systems can carry high loads of information and protect the data.

7. Integrate Necessary Third-Party Services

There are several services that need to be integrated into the NFT marketplace. Among them are crypto wallets and payment gateways. Without them, transactions won’t go through.

Besides these two, we recommend enabling social media integrations and connecting the platform to email services for proper notification systems and communication between users.

8. Build Smart Contracts

When building smart contracts, make sure they are aligned with the functionality of your platform. Contracts prove the reliability and trustworthiness of any transaction.

9. Testing and Improving

Each enthusiast, building their own marketplace after completing the first stages should test the first version of the marketplace. Testing will show if there are any bugs and issues on the platform. As they may distract users and make their experience worse, it is best to check everything and start improvement activities early.

Features to Include in an NFT Marketplace

Now we can discuss in detail what features need to be included in an NFT marketplace.

1. Storefront

One of the most important features of the NFT marketplace. Storefront collects all the information about offers, NFTs descriptions, and their offers, prices, and so on. Here you can decide what to display.

2. Advanced Search Options and Filters

Like any marketplace, the NFT platform requires a strong search system. You can divide tokens by categories. For example, music and videos, photos and digital art, etc. This will allow finding the tokens quickly.

To support the search system, add filters. Filters will allow for more detailed search categorization. Users will be able to apply different filters and search for tokens by authors, prices, and many more.

3. Listings Creation

Allow your users to create listings. Make this process as simple as possible. That means it should include just a few steps to complete, but still provide all necessary information about NFTs; description, price, title, and tags. Autocomplete is very helpful, especially when submitting a big number of items at once.

4. Listing Status

This feature is vital for NFT creators to successfully sell NFTs. It allows them to keep users updated with the status of their digital works.

5. Crypto Wallet

When building an NFT marketplace, one of the first things to add is a crypto wallet. Improve the user experience by integrating the wallet into the marketplace so users could pay for NFTs without leaving the platform.

6. Buying and Bidding

Bidding is what makes NFT marketplace complete. Users should have the ability to place bids on non-fungible tokens.

User Flow on NFT Marketplace

For NFT platforms, the user flow is similar to the regular marketplace.

First, visitors to the website create an account and fill out all necessary information. The next step is creating a crypto wallet or linking an existing one.

After that users provide digital assets that represent their works. There are several options: an artist can create a collection of artworks, sell pieces at a fixed price or set up a bidding system.

All products only appear on the marketplace after they have been approved. Customers will items once they become available for sale or bidding.

You can select the desired cryptocurrency for trading. The service keeps track of transactions and item movements and every party is notified.

That is a typical user flow on the NFT marketplace that you can use to navigate yourself through the marketplace development cycle.

Out-of-the-box NFT Marketplace Tools VS Custom Development

When you come to the development process, there are two options: either to build the product based on the ready-made solution or develop the marketplace from scratch.

One of the most commonly used solutions is OpenSea SDK. It provides you with all the needed features for an NFT marketplace. You can simply adapt the ready-made layout to your design.

The online market is full of similar options. Simtech Development mostly works with the CS-Cart Multi-Vendor system. From our experience, we can share that the system is good enough for NFT app development.

Choosing a professional NFT marketplace development company is a proven option for creating a marketplace that will meet your business needs. Experienced professionals will take care of the project, handling every element thoughtfully and following your requirements. Adding new features and upgrading the existing ones at any time is possible. This way, you can scale and attract a bigger audience, therefore, making a greater profit.

If you do not want to use ready tools as your NFT marketplace should be something special and very specific, think about developing your project from scratch without ready-to-use tools. It will be more challenging but has its clear benefits.

Pros of Custom Marketplace Development

Security. Such services are well-protected due to a wide range of security tools — no need to be afraid of malicious activities and fraud.

Compatibility. Optimization guarantees that the custom NFT marketplace will be compatible with a wide variety of devices (from PCs to smartphones).

Scalability. It’s scalable, which means it can handle many listings and a growing client pool. Functionality. You come up with an architecture and features based on a market analysis. Implementing any idea becomes possible.

Cons of Custom Marketplace Development

Price. Creating anything from scratch requires you to invest even more time and money compared to using ready-made templates. Find investors who will support you with funding and help you reduce expenses.

Time. Building an NFT development team alone may take plenty of time. As you want a fully customized and personalized business, expect to spend some time and effort.

Management. You’ll need an NFT development team that is in it for the long haul. What’s more, it might be challenging to find suitable applicants and manage staff.

How Much Does It Cost to Create an NFT Marketplace?

Honestly, it is hard to put an exact price on the NFT development process.

There are too many factors to consider:

• Development process: what way do you follow — do you use a ready-to-use solution or develop the project from scratch?
• Is there a team you need to hire? How big is it?
• How many integrations do you plan to include?
• Promotional campaigns

Fellow developers say the average cost of NFT marketplace development is about $100 000, and it usually takes around 4–6 months to develop a platform from scratch and launch.

Succeed with Your Custom NFT Marketplace

Still doubting that the decision to develop an NFT marketplace is a good idea? Just look again at those million-dollar prices and growing interest from artists and entrepreneurs.

By creating a centralized platform for NFT distribution, you are building a modern technological space for trading digital assets. Try to focus on one niche and scale the platform with time.

You’ll see, the interest will be even bigger in the near future. And if you have technical questions about development, our team will be happy to help.