If you’ve ever been in the crypto space, you’re probably familiar with NFTs. They’ve been the talk of the town for a long time, and the release of CryptoPunks in 2017 boosted their popularity even further. Although NFTs are volatile and the NFT market experiences significant ups and downs, they have unquestionably become one of the greatest innovations of the era, with numerous practical applications. Surprisingly, this volatility is indicative of the large number of people entering the NFT world.
Even though NFTs are part of the crypto space, they cannot be purchased on centralized crypto exchanges such as Coinbase or Kraken. They are, however, widely available in dedicated NFT marketplaces. NFT marketplaces provide a safe environment for artists and creators to showcase their talent and sell their creations.
As more NFTs are issued each day, the number of NFT marketplaces grows. According to NonFungible.com, NFT sales average between $10 million and $20 million per week. Similarly, in the second and third quarters of 2021, the NFT trading volume increased by 704%, implying that the NFT industry experienced an eightfold increase in quarterly trading volumes.
How do NFT marketplaces work?
Minting and trading are the two main activities in NFT marketplaces. In minting, any digital file (JPEG/mp3/mp4) can be converted into an NFT and stored on the marketplace’s blockchain. Profits can be made by trading NFTs.
The NFT minting process is simple. Before create a minting website we must follow some process. You must first install a browser extension of a wallet, such as Metamask, that is compatible with the marketplace of your choice, such as OpenSea. Metamask, as an Ethereum wallet, allows you to create an account on any Ethereum-based marketplace.
After creating an account, you must submit or upload the file or artwork to the marketplace for conversion into an NFT’s. The process is similar to uploading a photo or video to Instagram; you must name it, add a description, and set up royalties. Some marketplaces, such as OpenSea, will allow you to further customize your NFTs by adding them to an existing collection or by adding stats, properties, and levels. After you’ve completed these steps, you’re ready to sell it.
When an NFT is minted on a marketplace, anyone with the necessary amount of cryptocurrencies can purchase it. To purchase an NFT’s, you must have a crypto wallet that is compatible with the marketplace. For Ethereum-based marketplaces, for example, a Metamask wallet is required. The next step is to purchase the required cryptocurrencies and link the wallet to the marketplace.
An NFT can be purchased through an auction or a fixed-price listing. To purchase an NFT through auction, simply place your bid and wait for the auction results. If your bid appears to be successful, the amount will be deducted from your wallet, and your NFT wallet will be credited with your newly purchased NFT.
What not to do when establishing an NFT marketplace?
Not Adhering to Proper NFT standards
So far, ERC-721 is the most prominent and widely used NFT standard. So, if you’re creating a marketplace, make sure it complies with ERC-721 standards. OpenSea, for example, is built on Ethereum and adheres to the Ethereum NFT standard, ERC-721, which is also the most widely used standard to date.
The structure of NFT data or metadata should also adhere to the ERC-721 standard’s naming convention. This ensures that NFTs created on your marketplace can be accessed by other marketplaces. Following proper standards ensures that users can access and trade NFTs between marketplaces that use the same standard. Similarly, your NFT marketplace should be able to list and trade NFTs created on other marketplaces.
Database Data Retrieval
One of the primary reasons for the introduction of blockchain was to promote decentralization so that no central entity could create a monopoly and take control of users’ data. As a result, any information related to an NFT, such as its name, collection name, price, and so on, should be directly retrievable from its host blockchain rather than the marketplace’s database.
Because the data in a marketplace’s database is editable, anyone working in the system’s backend can manipulate the information for personal gain.
However, data stored on a digital ledger (blockchain) is immutable. That is, it cannot be edited or deleted, and thus provides complete transparency. As a result, all NFT data and transactions on your marketplace are secure.
Backend Blockchain Write Operation
In NFT marketplaces, transactions can be initiated from both the front end and the back end. The frontend process involves the user signing the transaction with their private key stored in their crypto wallet. The backend process, on the other hand, is carried out by platform developers working in the backend with their private keys.
It is never recommended to perform any blockchain write operations from the backend. Allow users to sign their transactions, pay the gas fees, and take all other necessary steps when purchasing NFTs.
Not implementing NFT Commissions
A marketplace can implement two types of commissions: royalty fees and marketplace commissions. When you build an NFT marketplace, you can increase your income and that of the artists by implementing the following two commissions.
When a user sells their NFT, a commission (set by collection owners) should be credited to their wallet.
NFT creators receive royalties for their ongoing trade. They pay artists a percentage of the sale price of a resold piece of art. Regardless of how many secondary sales occur, the original creator will invariably receive a portion of the profit, thanks to smart contracts.
Users should pay a fixed commission percentage when listing NFTs on a marketplace.
The marketplace commission varies by platform and is very similar to the royalty commission in that the marketplace receives a set percentage of each sale. Binance marketplace currently has the lowest commission percentage of 1%, followed by LooksRare with 2% commission and OpenSea with a commission percentage of 2.5. Third-party APIs
Instead of storing critical information about an NFT’s in your marketplace database, such as its trading history and listing information, you can try using third-party APIs. An NFT’s API contains all information about NFT’s collections, transactions, users, and so on. It simplifies data or information acquisition related to NFT’s for a marketplace’s backend.
NFT marketplaces are undeniably profitable. However, if you want to meet your own and your users’ needs, you must plan carefully. When designed with certain dos and don’ts in mind, your NFT’s marketplace will invariably deliver the desired results, and one of these nft marketplace for memes is also one of these. Additionally, approaching an NFT’s marketplace development company can make your job a hundredfold easier and faster.