How to Create an NFT Marketplace that Will Attract Investors

An NFT has become a real buzzword today, and experts believe it is just the beginning of the NFT epoch. Even if tokens and asset tokenization are not the topics you are interested in, you’ve likely seen the NFT abbreviation somewhere on news websites. And it is not surprising at all as even such prominent companies as Nike, Adidas, and Visa, among others, enter this market either via investments or via launching their own NFT collections. Okay, what are we talking about if even Melania Trump has announced the launch of her own NFT platform? The question is entirely rhetorical.

Moreover, NFT art is a separate sector gaining momentum these days. So why is the number of users of NFT marketplace platforms growing? And why do so many people see the benefits of trading assets of this kind?

We want to answer these questions in this article and explain what you should know about NFT marketplace development.

What is an NFT marketplace?

To begin with, let us tell (or remind) you what an NFT is.

This makes them quite the opposite of other digital assets, such as bitcoins. For example, let’s suppose you own a bitcoin, and your friend owns a bitcoin. You can give your bitcoin to your friend and get their bitcoin instead. And you both will still have a bitcoin. So even though you have another coin, you still have a coin with the same value. With NFTs, such an exchange is impossible, as nobody else can own the same asset.

NFTs can also be explained as a digital representation of some kinds of real-world assets. For example, today, the NFT market includes digital music, real estate, sports, and art.

As we’ve already mentioned, NFT art is the field that attracts the most significant number of investors and investments. For example, in March 2021, Mike Winkelmann (Beeple) managed to sell his digital collage for $69 million. To compare, other works by Beeple were sold for $6.6 and $6 million.

Among other items that today can be sold as an NFT, we should name:

• a digital collectible (Crypto Kitties, CryptoPunks);
• an in-game item;
• real estate;
• a tweet (yes, it’s also possible - for example, ex-CEO of Twitter Jack Dorsey sold his first-ever tweet for $2.9 million);

• an article/a magazine/a newspaper copy (New York Times column was sold as an NFT for $560,000);
• a song (for example, Elon Musk had an idea to sell a song about NFTs as an NFT, but later he decided not to do that);
• unique clothes or shoes;
• videos, images, GIFs.

The number of active NFT wallets in Q3 2021 reached 412,578. In Q2 2021, this figure was 203,719, which indicated more than 100% growth.

The next thing you should know about NFTs is places where it is possible to buy them. Unfortunately, you can’t buy them in your favorite supermarket or eBay. To purchase assets of this kind, you need to visit an NFT marketplace. Their number is constantly growing, and below, you can see just a couple of examples:

• OpenSea;
• Christie’s Auction house;
• Nifty Gateway;
• Sotheby’s;
• Binance NFT Marketplace;
• SuperRare;
• Mintable.

Given the growing demand for NFTs, it is not surprising that many startups are looking for possibilities to create an NFT marketplace. But to do that, it is crucial to have specialists who can do that and know how platforms of this type work and what features should be provided to users.

How does a typical NFT marketplace work?

Usually, the procedure of selling/buying NFTs on marketplaces looks the following way. 

First, a seller must create an account and register or install a digital wallet where the NFTs will be kept. Secondly, a seller has to upload items to the platform where unique digital assets are generated with the help of special smart contracts. Finally, the created token is added to metadata, a unique data format. It is also possible to indicate what tokens can be accepted as payments. Today Ethereum (ETH) is the most popular option to pay for NFTs.

When you are considering creating an NFT marketplace, you should also think about the ways of selling items that you will offer on your platform. For putting items for sale, there can be different variants. For example, it can be an auction or a fixed-price deal. In addition, when an item is listed for sale, a transaction for creating a smart contract for the user’s wallet takes place.

As for buyers, the process is quite similar to what is happening on many modern eCommerce platforms. They just create their accounts and choose the items they are going to pay for. However, before making a transaction on a marketplace, they should convert their fiat money into one of the crypto coins that sellers can accept.

Properties of NFTs

Let’s take a closer look at the characteristics that make non-fungible tokens different from any other digital assets.

• Uniqueness. As we’ve already mentioned, it is impossible to have two NFTs that will be ultimately the same.
• Ownership. The process of buying/selling NFTs presupposes the transfer of ownership.
• Indivisibility. One NFT can’t be split into smaller parts, and you can’t buy just a part of this token.
• Transparency. That’s a property of any transaction that takes place on a blockchain. For example, it is possible to verify the value of the NFT before buying it. Thanks to the decentralized nature of distributed ledgers, all the data about the token and related activities are publicly available.
• Scarcity. That’s the property that acts as a booster for NFT prices. The supply of NFTs is limited, which makes them extremely valuable.
• Interoperability. Each person who has bought or launched an NFT can further exchange or sell it.

Non-fungible token standards

As NFTs run on the blockchain, knowing what protocols and standards are used is essential. It means that if you want to create your own NFT marketplace, you should know what requirements you have to follow to make sure that tokens work as they are supposed to. These days the following token standards are typically used:

1. ERC721. It is the most widely applied standard used for NFTs. That’s the standard of the Ethereum blockchain, and as Ethereum was the first network for launching unique tokens, this standard is still the most popular one. In addition, ERC721 supports smart contracts and provides a wide range of tools for transferring assets.
2. ERC998 and ERC1155. These are two other Ethereum standards for NFTs. However, they are not used very often today. ERC998 tokens can be composed together, and the created set can be sold via a single transfer of ownership. ERC1155 tokens provide users with the possibility to register fungible and non-fungible tokens under the same smart contract and address. It can benefit gamers as fungible assets can be used as transactional currency in a game and non-fungible tokens can be in-game collectibles.
3. BEP-721 and BEP-1155. Binance Smart Chain is a blockchain launched by one of the leading crypto exchanges in the world Binance. This network also supports smart contracts. BEP-721 and BEP-1155 are equivalents of ERC721 and ERC1155 NFT standards, respectively.

Other blockchains (and consequently, token standards) support NFT launch, such as Solana, Flow, WAX, Tezos, Stellar, Polygon, Tron. But they are not as widely used as the ones mentioned above.

How to make an NFT marketplace

The process of creation of an NFT platform doesn’t seriously differ from the process of building any other software product. However, a very simplified model of this process includes a couple of core stages.

Stage 1. Idea

At this stage, it is important to understand what type of solution you will build, what niche it will occupy, who will be the target audience, and what blockchain and token standard you want to use. Do not forget to think about the unique features of your platform, its competitive advantages, and its monetization model.

It is pretty evident that if you are not a developer or a tech expert, it will be difficult for you to find the answers to some of the questions on your own. But you can consult with the development team you’ve chosen for your project realization. Specialists will help you understand some technical points, estimate the costs, and set the possible timeframes.

Stage 2. Development

When the idea and all technical aspects are clear, the development team can start building your platform. First, an interface concept should be built, and later the team will create the architecture of the software.

Stage 3. Testing

We always recommend not ignoring this stage and paying enough attention to it. It’s crucial to make sure that your software is bug-free and that all the features function as they are supposed to do it.

Stage 4. Release, support, and maintenance

When the project is released, there is still much work to be done, including technical and customer support. Moreover, with a flow of time, you may realize that your marketplace doesn’t have any essential features, and developers will improve the situation.

What functionality should your marketplace for NFTs have?

As you may have already understood, such platforms are quite similar to traditional eCommerce websites.

That’s why the necessary features are well-known to those who use online trading platforms. It is recommended to include the following features:

• Storefront (online catalog);
• Search system and filters;
• Wallet;
• Rating section;
• Buying functionality and auctions;
• Listing creating feature and listing status (that’s functionality for sellers, all the processes should be clear and straightforward).

Of course, when you are building your platform, you are free to enrich it with some unique functionality that will make your website more attractive for users. For example, you can add some features for communication or some educational sections with helpful guides and other valuable information. 

For example, you can follow this link to read about one of the NFT platforms that we’ve built for our client.

Tech stack for creating an NFT marketplace

When you are trying to find an answer to building an NFT marketplace, it is essential to think about a technological stack used.

For a platform of this kind, you need to take into account the following aspects:

• blockchain platform (Ethrereum, BSC, or any other from those that we’ve already mentioned);
• NFT standard (ERC721, BEP-721, or something less common);
• storage (usually, there is a choice between the IPFS hypermedia protocol or the decentralized Filecoin network);
• front-end development framework for web and mobile (Angular.JS, React.JS, Vue.JS - for web, Java, Kotlin Swift - for mobile).

Wrapping up

If you want to launch your own NFT platform, it’s high time for you to start moving in this direction already, as it is a perfect period for it. The NFT market is actively expanding. And that provides many opportunities for newcomers to impress the community. At Geomotiv, we are always ready to help you transform your ideas into actual products. We use the most advanced tools and technologies to ensure the security and reliability of our solutions. Just fill in this online form, and our experts will contact you as soon as possible.