Non-fungible tokens, or NFTs, are one of the hottest trends in the modern digital economy environment. They have become so popular that NFT marketplaces are popping up left and right. It’s time to learn how to join the trend and build your own NFT marketplace.
For several years now, maybe even decades, we’ve been witnessing the tech world produce exciting, innovative products that evolve at astounding speeds. One day we got a portable phone; the next, we got a portable computer, now, we have VR headsets at home, and we can travel to Japan without ever leaving our couch. However, after so many tech advancements, the truth is we’ve become accustomed to witnessing new gadgets and technologies emerge, boom, and become obsolete in a matter of months. Very few things surprise us now that we’ve been “technologically desensitized,” and the word “innovative’ seems to have lost all its meaning. What’s more, activities like buying and owning stuff, which once were exciting, are now dull and mundane as most items on the market are now mass-produced and generic. But what if we tell you that now there’s a way you can buy and own genuinely unique items that actually have value and that belong only to you? Enter the NFT marketplace.
By now, most of us are familiar with blockchain technology and cryptocurrencies and understand how they work, even if it’s in broad terms. And we’ve all used online marketplaces to buy or sell goods and services at least once, right? Now, imagine a place that results from the coalition of both. An online marketplace where collectibles, artwork, paintings, photographs, music, videos, and much more can be auctioned, sold, digitized, or tokenized. They then become unique, much more valuable, and, best of all, you’ll be the sole owner, and no one will ever be able to steal them. Sounds excellent and kind of “science fiction-ey,” right? And yet the place where these exchanges happen exists, and it is what we call an NFT marketplace.
So, what is NFT marketplace development? How can you build one? In this article, we at Foonkie Monkey wanted to walk you through everything related to NFT marketplace development, its features, requirements, and the technologies involved in the process. Read on!
What are NFTs?
An NFT, or non-fungible token, is a unique digital unit of data stored in a blockchain.
More specifically, non-fungible is a term used in economics to define items that aren’t interchangeable and can’t be replaced or duplicated. Think of a one-of-a-kind baseball card or a signed custom Les Paul guitar. These items are non-fungible as they are unique and can’t be replicated. Yes, you can exchange them say, for another guitar, but you’re still left with a completely different item. Alternatively, you can easily exchange fungible items because they have identical value to another object, as is the case with money, gold, or cryptocurrencies. If I give you one dollar and you give me another dollar, we’ll have the same item we exchanged, and we’re back to square one. On the other hand, a token is a digital representation of an asset that resides on a decentralized blockchain; in this case, NFTs are usually stored in the Ethereum blockchain, but as the technology evolves, more blockchains, such as or Flow, have entered the NFT game.
So, with that in mind, we can say that NFTs are digital assets or tokens that represent real-life or virtual items such as collectibles, videos, in-game merch, and even real estate. However, lately, they have found their fame around digital art. NFTs can be bought or sold online, usually with cryptocurrencies, and can only have one rightful owner at a time, which is what makes them so attractive. Moreover, NFTs contain information that, in layman’s terms, basically says: “whoever owns this token owns the GIF or audio file stored in this location.” In that sense, an NFT certifies that an object is unique and belongs only to one person. It also means that because NFTs are mainly protected by a blockchain, they can’t be modified or illegally copied. In addition, a record of every transaction is always kept, adding security through visibility.
Due to their nature, NFTs have become a prevalent form of digital ownership. As a result, users worldwide are starting to enjoy their myriad benefits, some of which include:
- Originality: Each individual NFT is unique and cannot be illegally copied without establishing proof of ownership.
- Authenticity: NFTs can only have one owner. Ownership, once established, can be easily verified.
- Indivisibility: Unlike c cryptocurrencies, NFTs cannot be divided.
- Uniqueness in value: An NFT cannot be equal to another.
- Security: An NFT, especially valuable ones, cannot be stolen or illegally copied and distributed.
These characteristics, and many more, have caused the NFT market to grow from $100 million in 2020 to $3 billion by mid-2022. That’s a thirty-fold increase in only two years! Additionally, the most expensive NFT transaction, Pak’s The Merge, reached a whopping $91 million in 2021. Also, between August 2021 and February 2022, NFT total sales in the digital art segment earned $1.7 million. We could keep talking about NFTs’ outstanding growth, but these figures are pretty self-explanatory. What we can do is get into how and where NFTs are traded: NFT marketplaces.
What is an NFT marketplace?
As you probably suspected already, an NFT marketplace is where NFTs are stored, traded, and sold. Think of Amazon or eBay but for NFTs. Pretty straightforward. Still, there’s a lot more that happens behind the scenes of these “digital agoras” than meets the eye. For one, unlike platforms such as Netflix or Spotify, which grant access to unlimited digital content, NFT marketplaces only deal with one-of-a-kind pieces that can range anywhere from art and music to NBA moments and real estate. Secondly, all NFT marketplaces are blockchain-based, meaning they leverage digital ledger technology to verify the authenticity, provenance, and ownership of the digital content they store and trade. These records can’t be altered and are visible to everyone, avoiding issues like copyright infringement, guaranteeing intellectual property, and reducing theft. Moreover, blockchain-based transactions usually happen using cryptocurrencies and can occur via auction or simple buyer-seller interactions. For the latter, NFT marketplaces use specific self-executing agreement protocols known as smart contracts to facilitate the transparency and integrity of the business interactions between buyers and sellers.
But how exactly does an NFT marketplace work? How can you access and use it? Although there are hundreds of different NFT marketplaces out there, most of them use a user flow that consists of the following steps:
- First, users must create an account with secure login credentials and some essential personal data, irrespective of whether they are buyers or sellers.
- If users already have an e-wallet, they have to link it to their accounts. If not, most NFT marketplaces have built-in wallets. Either way, these types of digital wallets are essential for NFT trading because they store the users’ NFTs and the cryptocurrencies used to purchase them.
- Afterward, if it’s a seller, they must mint their NFTs. For this, they must upload the digital files that will become the digital assets they sell or auction. They must provide all the necessary information about the NFT, including its description, cost, auction deadline, and more.
- Next, the NFT marketplace will moderate the NFT and list it as long as it meets its regulations and specifications.
- The buyer then purchases the NFT or places a bid for it.
- If the seller accepts the offer, they release the NFTs to the buyer, and the amount is automatically withdrawn from the buyer’s e-wallet.
All NFT marketplaces charge a mandatory blockchain transaction fee known as a “gas fee” and apply for the minting and listing of NFTs. In addition to the gas fee, some marketplaces also charge extra transaction fees, which are usually taken as a proportion of the final sale.
NFT marketplace features
NFT marketplace development is very specific, as building your own NFT marketplace requires you to incorporate a solid and very particular set of features. This set of features not only attracts your target audience but also helps them establish business relationships and helps you deliver the NFT promise to them. Here are some of what we consider the must-haves features of a thriving NFT marketplace:
Storefront: Can you imagine a supermarket with no storefront, entrance, or windows? We can’t. The same goes for a website’s homepage. Without an enticing storefront, you cannot develop a successful physical or digital business. For any NFT marketplace, having an attractive and intuitive storefront means displaying all relevant information in an organized, clutter-free way to allow users easy access to the page’s main features and keep the user experience flawless.
Advanced search: Adding an advanced search feature helps your users find the NFTs they want to purchase quickly with the help of filters such as category, price, condition, location, seller, artist, genre, etc.
E-wallet integration: This feature is non-negotiable as it enables and simplifies all transactions in any NFT marketplace. You can either develop your own built-in e-wallet or integrate with an existing provider, such as Coinbase or MetaMask, via an API. The latter is the easiest and most effective avenue since you save time and money and ensure a seamless experience for your users.
Auctioning options: As we mentioned earlier, NFT marketplaces allow digital assets to be sold or auctioned. For the first, you can develop a simple purchasing option. However, for the latter, you must implement an auctioning mechanism that enables biddings and allows you to manage them and add closing dates and status.
Rating system: A rating system is helpful for any marketplace website or application. For NFT marketplaces, the option can help users rate sellers and make them stand out according to the number of fulfilled deals, number of listings, and value of their items, among others. As a result, buyers can easily find the top sellers and rate their transactions, enhancing the user experience.
Deepening on the type, size, and specifications of your NFT marketplace, there are other features you can include to create added value and ensure customer satisfaction.
NFT marketplace development
If you have decided to develop your own NFT marketplace, know that modern NFT marketplace development practices give you two options: you can build your own solution, or you can use some ready-made tools and SDKs, such as OpenSea’s, or you can develop your marketplace from scratch. The first option allows you to build your solution efficiently, quickly, and with less monetary investment, but you’d have less room for customization and less freedom to develop your NFT marketplace the way you want it. You’d also be tied to some vendor-made functionalities and have significantly less flexibility and scalability, which can be a hassle if you need to build for a niche market. The second option gives you all the benefits of creating a custom solution. It allows you to be in complete control of your product and implement whichever functionalities you choose while giving you the freedom to develop a product that is entirely yours. Both options have their perks, and which one suits you best depends entirely on your project’s specifications and your needs. However, for the purpose of this article, we’ll be discussing NFT marketplace development from scratch. So let’s get to it.
1. Research and planning
Research and planning are always the crucial first steps for any development project, even more so in NFT marketplace development, where you’ll often be building for niche markets. You must conduct proper user research and plan your NFT marketplace’s requirements, features, and scope so you can write your user stories, map your user journeys, assess who your customers are, their needs, socioeconomic characteristics, purchasing behaviors, and more. Moreover, this phase is where you determine your marketplace’s offerings. For example, will you sell gaming or art NFTs? Or maybe collectibles. Or sports memorabilia? Doing so will help you determine how you need to proceed to meet those needs and target them accurately.
Conducting thorough research will allow you to establish your marketplace’s technical requirements, features, project scope, budget, and tech stack so you can jump in knowing precisely what you’ll need and avoid extra costs. It can also help you see who your competitors are and understand what they’re doing, what they’re successful at, their flaws, and the overall feel of the NFT market. This process is the only sure way to determine your users’ needs, your product’s strengths and weaknesses, and its scope and requirements. Cutting corners on your initial research will only end in spending more time and money down the road fixing issues you could’ve spotted earlier.
2. Select your blockchain and tech stack
Thanks to what you learned in your research stage, you now know which blockchain and tech stack better suits your NFT marketplace. First, decide if you’ll use only one blockchain or implement multiple ones, which is a more complex endeavor, so if you go with cross-chain development, make sure you have blockchain experts at hand. Today, the leading blockchain in the NFT market is Ethereum. However, Ethereum is currently riddled with high fees and a slow validation mechanism for NFT marketplace transactions. If you can, choose other blockchains such as Solana or Cardano, which are gaining momentum, have modest fees, and can process thousands of transactions per second without a hitch.
Regarding your tech stack, parts of it, such as your programming language, largely depend on which blockchain you choose to work with. For instance, if you pick Ethereum, you’d need to work with Solidity, but if you go with Solana, you’ll need to program in Rust, C, or C++. So, once you choose your blockchain, you’ll have an easier time building your tech stack accordingly. Still, these are some of our recommendations:
- Cloud hosting and storage: AWS, Filecoin, Amazon S3.
- Smart contract deployment: Brownie, Hardhat, OpenZeppelin.
- NFT standards: ERC-72, ERC-1155.
- Front-end framework: React.js.
- Back-end framework: Node.js.
- E-wallet: Coinbase, MetaMask.
- Languages: Solidity, Rust, C, C++.
- Database: MySQL, MongoDB.
- DevOps: Azure, AWS.
This tech stack can give you a broad idea of what you need. However, some elements may change for your NFT marketplace, and you can choose them depending on your budget, your product’s requirements, your team, your users’ needs, and much more.
3. UI/UX Design
With all the competition out there and the current booming popularity of NFTs, your marketplace’s UX/UI design should be flawless and original so that it can stand out. It must also be technically feasible, easily implemented, sustainable, and user-friendly. You’ll accomplish nothing by implementing a UI/UX design full of fancy graphics, heavy videos, and complicated navigational flows. So, to ensure your NFT marketplace development ends up in seamless UI/UX design, you must implement a robust prototyping phase where you create and use your user journeys to create mockups of your NFT marketplace’s screens and navigational flows. By doing so, you’ll be able to flesh out and test your product’s user experience on real users to gauge what works and what doesn’t and adjust accordingly.
4. NFT marketplace development phase
Now you’re ready to start your project’s development and execution phase. Here, you’ll mainly focus on developing your product’s back-end, which is very specific for NFT marketplace development because most of its programming protocols need to revolve around your product’s blockchain. First and foremost, you need to implement smart contracts so your users can mint their NFTs, pay and receive crypto, and bid, among other contract-based actions. For this, you should hire expert developers who understand the ins and outs of smart contracts’ technical and regulatory requirements. But, in broad strokes, there are two prevalent types of NFT smart contracts: ERC-721 and ERC-1155. These tokens will become the backbone of your blockchain, and which one you choose will depend on what blockchain you’re using, but basically, you code them in Solidity. Note that if you use ERC-721, you can create multiple assets, from real estate to digital art and gaming items.
Aside from everything related to your blockchain, developing your NFT marketplace is pretty straightforward. First, you need to build your front-end, or storefront in this case, which you already did when you implemented your UX/UI strategy. You must then work on your back-end and develop a robust app architecture, program NFT metadata, good database functionality, proper blockchain, e-wallet, smart contract integration, auction mechanism implementation, security and data protection, storage, and outstanding program logic. Lastly, make sure you always ensure safe coding practices by promoting in-team code reviews and always choose secure third-party applications, APIs and SDKs if you decide to use them.
5. Testing
As you may already know, testing is the crucial final step before release. Here, you must implement a robust QA testing strategy where you or your QA engineers will perform thorough manual and automated testing procedures to gauge how well your product works. These tests evaluate the performance of elements such as loading times, usability, security, access control, installation (for apps), and more. Note that, due to constant customer flow and high transaction rates, NFT marketplace development requires you to pay particular attention to load testing. Doing so can help you evaluate if your product works optimally under stressful conditions, which is extremely valuable in providing a flawless user experience.
6. Deployment and maintenance
Now, you’re ready to release your NFT marketplace into the wild. But developing a thriving NFT marketplace isn’t just about building the perfect product. You must also make sure that, even after deployment, your marketplace always works seamlessly and continuously improves as you gather user feedback. This feedback is crucial for testing and analyzing what your users want, like, and dislike about your NFT marketplace.
Moreover, post-launch analysis and assistance help you stay on top of bugs, security threats, and glitches so you can fix them promptly.
NFT Marketplace Development Challenges
As you’ve probably already observed by reading this article, NFT marketplace development is very complex and is not without its challenges. Therefore, you must consider what they are so you can anticipate them and adapt to the hurdles they may bring. Here are some of the main ones.
Blockchain and smart contracts integration: Blockchain and smart contracts aren’t exactly new in the world of fintech or other types of marketplaces. However, NFT marketplaces are reasonably new, and it can be challenging to master their implementation and understand how they work because not a lot of documentation is available yet.
Attracting new users: NFTs are relatively new, and even if they’re becoming widespread, many users still don’t fully comprehend how the technology works. As a result, you must consider novice users when developing your marketplace and implement the design and flow to avoid overwhelming them.
Lack of experienced talent: As stated above, NFTs are relatively new, and blockchain has just recently started gathering popularity, which means there are still not a lot of experienced developers who can build a product based on NFTs, blockchain, and smart contracts.
NFT marketplace development: final thoughts
NFTs are slowly becoming a mainstream phenomenon that promises to revolutionize the ownership of assets, taking us from owning physical stuff to owning digital elements that a few years back seemed ludicrous. As a result, NFT marketplaces are starting to pop up and are becoming a haven for NFT enthusiasts across the globe. This phenomenon has increased the value of the NFT market, making it an increasingly attractive investment alternative. So, as the number of people like you, who are seeking to start an NFT marketplace, keeps growing, the importance of understanding how these virtual malls work grows as well. Therefore, keeping NFT marketplace development as clean, efficient, and productive as possible will ensure that only high-quality products hit the market. This way, the world can keep enjoying them, and they keep creating real value for buyers and sellers alike.
If you have any questions regarding NFT marketplace development or want an experienced team like ours to work on your blockchain-based solution, get in touch! We’re more than happy to help!