2021 for Arateg. The year of changes and accomplishments
Last year brought a lot of changes and achievements to our company, from opening new offices to receiving prestigious awards. Read the article to find out the results of 2021.
Initially introduced in 2014, non-fungible tokens (NFT) are witnessing unprecedented growth. Reuters reports that the NFT token market surged in the second quarter of 2021, with sales accounting for $2.5 billion, up from just $13.7 million last year.
Allowing digital content makers to protect their intellectual property, NFT marketplace platforms provide vendors with excellent opportunities to reach the audience and generate profit. Additionally, online NFT marketplaces confirm the authenticity of digital items delivered by merchants. Since NFT marketplace apps address the pain points of both sellers and customers, investment in startups is rapidly increasing.
This article describes how to build an NFT marketplace solution, from top-priority features to software technologies that can be used by developers. But first, let’s consider the principle of operation behind a non-fungible token marketplace.
Table of contents
What is an NFT marketplace and how does it work?
Representing intangible non-interchangeable units (images, 3D models, in-game items, animated GIFs, video and audio records), NFT tokens are unique and stored on the blockchain decentralized distributed ledger. Technically, NFTs function like other crypto tokens but, in contrast with cryptocurrencies such as Bitcoin and Ethereum, are not fungible.
Each token contains a small amount of unique data. Linked to the blockchain, content pieces cannot be forged or stolen. This way, online NFT marketplace platforms protect the intellectual property of vendors.
Using an NFT marketplace app, artists, musicians, influencers, and other content creators trade non-fungible tokens while consumers buy items at a fixed rate or at an auction. In order to make purchases, carry out transactions, and store tokens, shoppers and providers need to use a crypto wallet. Once a purchase is made, a customer gets an URL of a file while the income is transferred to a merchant’s wallet. Hence, NFTs are not files but their URLs.
To start selling on an online NFT marketplace, content owners generally pass the following steps:
- Creating a crypto wallet or using the existing one to register on an NFT marketplace platform.
- Minting NFTs. This means uploading digital files in certain formats—from JPG to MP4—to the system and listing them for sale. In fact, this is about turning a file into a crypto asset that can be traded or purchased without intermediaries. When minting an NFT, a content owner can set up royalties for every subsequent sale. There may also be some peculiarities for different blockchain platforms. For instance, to mint NFTs on an Ethereum-based marketplace, their holders have to pay gas fees.
- After digital objects pass moderation and become seen for potential clients, vendors can start accepting payments and bids. When the auction closes, NFT token owners are notified about the highest bids.
There are a lot of NFT marketplace niches that include:
- Art. Platforms of this kind can deliver paintings, 3D models, GIFs, songs, videos, and other digital art units.
- Video games. Customers purchase user accounts, in-gaming items, and characters. NFT marketplaces ensure the security of transactions. Basically, users can buy in-gaming tokens to further resell them at a higher price and earn income.
- E-learning. NFT marketplace apps can provide online education services that comprise courses, lectures, and training programs from corporations, individual experts, universities.
- Investment. NFT investment marketplaces serve for asset (shares, bonds, exchange-traded funds, property rights, etc.) trading and cryptocurrency exchange.
Powered by blockchain and smart contracts, online NFT marketplaces regulate the transfer of funds and digital assets, involving trading and auctions. As NFTs generally operate according to the predetermined terms and rules, they work on networks that support smart contracts (e.g., Polygon, Binance Smart Chain, Tron, Solana).
Therefore, to build an NFT marketplace, it is important to hire a trusted blockchain development company specializing in creating multi-sided platforms.
Examples of well-known NFT marketplaces are OpenSea, Rarible, Nifty Gateway, NBA Top Shot, SuperRare, and Foundation.
The design of an online NFT marketplace like OpenSea
In our highly competitive landscape, building a performant and scalable NFT marketplace is not enough to achieve success. With the view to attract and retain the audience, it is essential to develop an appealing user interface (UI) / experience (UX) design.
According to SWEOR, nearly 95% of negative feedback is design-related while making a modern intuitive design contributes to a positive first impression and reduced bounce rate. Adobe found that 38% of website visitors will discontinue using the product if the layout or content is unattractive. In this regard, the creation of a UI/UX design is an important stage of NFT marketplace development.
To gain a competitive advantage and increase brand awareness, we recommend that you elaborate on a unique branding theme. It is also essential to organize platform content and functionality in such a way that token owners and consumers can promptly find what they need.
If you aim to launch a web NFT marketplace, make sure it is optimized for mobile devices. SWEOR reports that 83% of mobile users say a seamless experience across all screens and operating systems is crucial. Cooperating with a trusted UI/UX design company, you will create an NFT marketplace that will engage vendors and customers.
Time: 200 hours
The 9 main NFT marketplace features
1. Sign in and sign up via a crypto wallet
In order to sell and purchase non-fungible tokens, both vendors and customers have to create a personal account. For this purpose, they have to use their crypto wallets. Employing a wallet, users can also store, receive, and transfer NFTs and cryptocurrencies.
With the view to improve user experience, you should provide the possibility to register and authorize via multiple wallets like MetaMask, Coinbase, MyEtherWallet, Blocto, Fortmatic, and Torus. An NFT art marketplace Foundation enables content makers and consumers to connect MetaMask Ethereum wallet through a browser extension. OpenSea, the largest NFT marketplace globally, lets network members use numerous wallets, involving MetaMask, Coinbase Wallet, TrustWallet, Portis, Arkane, Kaikas, and OperaTouch.
To deliver such functionality, software engineers integrate an NFT marketplace solution with APIs of popular digital wallets. Some solutions support a variety of wallets, which allows for reducing the feature release cycle. By integrating the API of WalletConnect, for example, NFT marketplace developers can connect over 75 popular wallets.
It is worth noting that the choice of a crypto wallet depends on the blockchain platform used for NFT marketplace development. For instance, if a company aims to create an NFT marketplace powered by Tron, it has to connect TronLink.
2. Shop window
A shop window is among the primary NFT marketplace features, which allows consumers to view the information about digital items sold, for example, a token name, cost, unit description, owner name, accepted payment methods, and trading history (a section where customers can track their transactions).
In addition, NFT marketplace apps can provide details such as blockchain protocols, so that customers can easily verify the validity of non-fungible tokens.
3. Search
NFT marketplace development includes the implementation of the search functionality. To improve customer engagement and retention, software engineers need to make item search as simple as possible, so that users can browse goods much easier. For this purpose, it is essential to provide a range of categories like art, collectibles, domain names, photography, music, sports, trading cards, and virtual worlds.
Furthermore, users should be able to sort digital assets by various filters. OpenSea, for instance, enables shoppers to browse units by status (buy now/on auction, new, has offers), price, etc. OpenSea also has numerous filters for different NFTs. To find a certain unit, say, a digital space squirrel, users can search by clothes, rings, tattoos, dreadlocks.
In speaking of other well-known NFT marketplaces, SuperRare lets consumers sort content units—single-edition artworks—by the lowest and highest prices, the newest and oldest products, as well as recently active and ending soon auctions. Another famous NFT marketplace Rarible that allows buyers to purchase digital collectibles displays sections of hot bits, top sellers, and live auctions.
4. Auction
A convenient auction system is one of the key NFT marketplace features. When developing this functionality, it is important to provide a description section for lots that can contain information such as the name of an NFT and vendor, image, cost, as well as accepted payment options.
Customers must have the possibility to suggest their prices, view the amount of the latest bids, and see the expiration date. It is also crucial to enable buyers and digital asset owners to track the status of bids and lots.
5. Listing creation
To build an NFT marketplace that meets the needs of vendors, it is crucial to provide content makers with the possibility to easily create listings. A software platform should contain a page specifically for digital item submission that includes fields such as title, tags, and description. Sellers should also be able to track the status of their listings.
6. Online payments
An NFT marketplace app should offer a variety of payment methods to facilitate value exchange between vendors and shoppers. With this aim in view, software engineers have to ensure support for different cryptocurrencies (e.g., Bitcoin, ETH, Litecoin). Additionally, it is reasonable to provide the possibility to purchase digital content units using payment cards.
Venly Market lets customers buy collectibles, gaming assets, and other goods with MATIC, BNB, and SAND crypto tokens, as well as credit cards. Another popular NFT platform Markersplace allows for acquiring artworks via credit cards and PayPal besides ETH. On the Nifty Gateway NFT marketplace, users can purchase digital art and collectibles via prepaid ETH, Gemini Balance, credit, and debit cards.
In order to deliver various options, software experts can integrate a payment gateway API to process and authorize transactions. For instance, by integrating PayPal, software engineers can enable payments via cards (Visa, Mastercard, American Express, Discover), bank account, PayPal balance/Credit, and user rewards.
7. Rankings
To build an NFT marketplace like OpenSea, it is important to provide rankings. With this feature, customers will be able to monitor the top non-fungible tokens by various filters such as the volume of turnover, floor price, the number of owners, and others.
8. Notification system
When building an NFT marketplace, it is reasonable to provide a notification system to inform users about new bids, digital items on sale, lot status changes, special offers, and new collectibles uploaded by favorite content creators. With this feature, platform operators improve user engagement and increase the conversion rate.
In order to deliver this functionality, software engineers can integrate an online NFT marketplace with an application programming interface, for instance, Firebase. Learn more about third-party integrations for digital marketplaces.
9. An admin panel for NFT marketplace owners
When thinking about how to build an NFT marketplace, it is crucial to include an admin panel in the list of the top-priority features. In fact, an administrator panel serves as a web application that allows platform operators to manage listings, track payments, view sales reports, and set up commissions.
Furthermore, digital NFT marketplace owners verify the submissions of items and profiles through an admin panel. With the view of enforcing security, it is important to deliver role-based access control. Thanks to this, you will be able to see who introduced which changes.
Time: 2000-2500 hours
How much time does it take to build an NFT marketplace like OpenSea?
How much does it cost to build an NFT marketplace?
The cost of making an NFT marketplace similar to OpenSea depends on the time necessary for product delivery, as well as the software expert salaries. Since hourly rates of software engineers significantly vary across different countries, startups and enterprises worldwide are increasingly outsourcing their software projects to reduce expenses and increase efficiency while getting access to niche expertise.
For example, IT service vendors in Western Europe generally charge $40–$100 per hour. In the US and UK, hourly rates of software development companies may reach $50–$150 or even higher. As a comparison, software engineering firms in Belarus earn $20–$50 per hour while the skills and knowledge of designers, programmers, testers, and business analysts are the same. So, let’s have a look at an indicative budget that you should have to build an NFT marketplace.
The cost of building an NFT marketplace platform like OpenSea:
- US, UK — $173,000–624,000$
- Western Europe — $138,400–416,000$
- Belarus — $69,200–208,000$
Hence, the outsourcing of marketplace development to Belarus can enable you to cut expenditures by 2.5–3 times while end-solution quality will be the same or higher. Find out how Arateg establishes effective cooperation with clients by providing process transparency and data privacy. Founded in 2014, Arateg is a trusted, reward-winning marketplace development company located in Belarus.
How to monetize an NFT marketplace like OpenSea
Since NFT marketplace app operators do not create or sell any digital assets, it is essential to monetize an online NFT marketplace platform to receive profit. A monetization strategy that you choose has a direct impact on the level of income. This way, it is important to consider this aspect before building an NFT marketplace solution.
There are plenty of monetization practices that you can implement. Transaction commission is probably the most popular revenue model for NFT marketplaces.
Concerning real-life examples, SuperRare, a fast-growing NFT marketplace for trading unique digital artworks, demands a 3% transaction commission from customers for all purchases made on the platform.
Additionally, SuperRare requires a 15% artist gallery fee for primary sales while content makers also receive a 10% royalty on secondary sales. In order to manage the transfer of funds, SuperRare utilizes Ethereum smart contracts.
Advertising is another monetization strategy that can be employed by a digital NFT marketplace. For instance, you can let NFT holders pay for displaying their items in sponsored banners, trending collections, and best auction offers.
To learn more about revenue models, check out a guide to marketplace monetization.
A technology stack to build an NFT marketplace
Before creating an NFT marketplace app, you should take into account that this kind of solution is likely to serve a large audience and provide a seamless user experience, including fast page load speed and availability even during heavy loads.
Choosing a proper technology stack is crucial to build an NFT marketplace platform that meets quality standards and software requirements. By employing software technologies, engineers can achieve scalability, fault tolerance, and performance. It is also possible to ensure security while automating online NFT marketplace development.
It is noteworthy that making an NFT marketplace has its own specifics. First, non-fungible tokens are stored on the decentralized distributed ledger and NFT marketplaces generally operate on the blockchain. Second, smart contracts are written to enable the transfer of funds. For this purpose, software experts can use the Solidity programming language.
An example of a technology stack for building an NFT marketplace:
- Platform: Amazon Web Services (AWS), Blockchain
- Programming languages: Python, Solidity, TypeScript, JavaScript
- Libraries, tools, and frameworks: React, Redux, Django, Django REST Framework, FastAPI, Amazon EC2, Amazon S3, Amazon Route 53, Amazon CloudFront, Amazon EC2, Elasticsearch, NGINX, Docker, Kubernetes, RabbitMQ, Memcached, Redis, Firebase Cloud Messaging, Jest, Truffle, Ganache, Polygon, Solana
- Database and storage platforms: PostgreSQL, IPFS, Filecoin
To deliver critical functionality while reducing time to market, NFT marketplace developers can utilize third-party APIs for:
- Feedback and comments: Disqus, Discord
- Payment gateways: PayPal, Stripe, Braintree
- Crypto wallets: WalletConnect (allows for connecting more than 75 e-wallets)
- Data analytics: Google Analytics, Mixpanel, Kissmetrics
In addition, you can consult with a trustworthy marketplace development company that will analyze your objectives and tailor a technology stack accordingly. At Arateg, we will also assist you in prioritizing NFT marketplace features, choosing a software architecture, and outlining a roadmap for project implementation.
Why should you hire Arateg to build an NFT marketplace?
Founded in 2014, Arateg helps startups and SMEs deliver innovative products in highly competitive markets and increase revenues. Headquartered in Eastern Europe, Arateg provides online marketplace development services to industries like e-commerce, art, healthcare, e-learning, real estate, and hospitality. What’s more, our company has extensive experience in making blockchain solutions, which makes us a great partner to build an NFT marketplace.
By now, our team has created dozens of marketplace web and mobile platforms. Employing up-to-date technologies and best practices, our software engineers achieve scalability, high availability, resilience, and security while automating testing and deployment.
If you aim to build an NFT marketplace app, drop us a message. We will get back to you within 1 business day and help address all challenges. Project consultation is for free.
