A Manual to Kickstart Your NFT Marketplace Startup
By now most of us have heard about the meteoric rise of NFTs. This time last year, we wrote about how they were taking the digital world by storm. The figures speak for themselves - the NFT space has grown tenfold in the space of two years. It’s a true emerging market, with huge future growth potential. The added bonus lies in its decentralized nature, which means that if you’re a marketplace owner, there’s relatively little involvement on your part when it comes to trading. Your transactions are recorded on the blockchain, thereby reducing risk.
Did you know that OpenSea (which we describe in more detail below) is the only unicorn among NFT startups. Founded just over 4 years ago, it has recently been valued at $13 billion. Could your marketplace be next? Today, we wanted to recap the essential NFT facts and figures, and to explore the concept of the NFT marketplace, and how you might go about building one.
What are NFTs?
Non-fungible tokens (NFTs) are pieces of information with unique identity and ownership written on the blockchain, to which we can attach a digital file. The word ‘fungible’ in economics is an asset with units that are easily interchangeable, like money. But something that is non-fungible possesses unique properties, which means that it cannot be interchanged.
To put it more simply, NFTs are unique digital assets that can be bought and sold just like any other items, but they have no physical form. You might think of these digital tokens as certificates of ownership for such assets - almost like an autograph which proves authenticity.
What is an NFT marketplace?
NFT marketplaces are online spaces where you can buy and sell NFTs. There are many such marketplaces in existence, each covering a different niche in the NFT market. They have sometimes been described as the ‘Amazon of the digital world.’ If you’re looking to build your own, it’s a good idea to first get to grips with what users consider when selecting a marketplace to purchase from.
Dashboard of OpenSea, the largest NFT marketplace
Examples of the best NFT marketplaces
Below are three popular marketplaces which have experienced particularly rapid growth over the last couple of years.
OpenSea is the world’s largest NFT marketplace and also the first to be founded, back in late 2017. Interestingly, it began life as a marketplace for CryptoKitties but has since expanded beyond collectibles.
The marketplace supports the use of Ethereum, Solana, Klaytn and Polygon; with a range of cryptocurrencies accepted as payment options. Unlike other NFT marketplaces, including Rarible, it doesn’t support the use of fiat currency. OpenSea charges a fee of 2.5% for every transaction. Additionally, the user pays the gas fee for the blockchain transaction.
OpenSea is one of the best NFT marketplaces for newcomers. It has published a beginner’s guide to OpenSea which gives users an easy explanation of NFTs, and how the platform works.
Rarible is an Ethereum-based platform that allows users to buy and sell digital artwork, collectibles, video game assets and NFTs. It was founded in 2020, and already boasts roughly $16 million in venture capital from firms like CoinFund and Coinbase Ventures. It has also expanded to cover a user base of more than 1.5 million.
Rarible has created its own native token called RARI, and its holders are allowed to vote on company decisions, including policy changes. It charges a flat 2.5% fee on every transaction, plus any gas fees. It allows the purchase of digital assets using a credit card, and in doing so, supports transactions in fiat currencies.
Rarible is a good choice of NFT marketplace for those who want access o a broad network with strong connections.
SuperRare is a high-end marketplace for creative work which presents itself as a digital art gallery. It’s highly selective with the types of NFTs that it features on its platform and spends a considerable amount of time reviewing applications from digital creators, before making NFTs ready for sale, thereby giving a greater assurance of quality. SuperRare charges 15% the first time an NFT is sold on the primary market, alongside a flat 3% charge for every transaction.
The platform has recently announced the release of its SuperRare curation token. With $RARE, users can influence the diversification of the platform’s art ecosystem. SuperRare is highly popular among seasoned collectors of digital art.
Pro Tip: Consider user motivation before kickstarting your NFT marketplace
As with any digital product, the most important element are your users. It’s worth considering what is likely to govern their choice of marketplace. Here are three top factors.
The type of digital asset they’re interested in
Almost anything in the digital world can be tokenised on the blockchain. When we talk about NFTs, we naturally think about digital art, but NFTs can also come in the form of a written piece of content, a film, a video game or a collector’s item of another kind. Bear in mind that you can also link merchandise with blockchain-proved ownership, as is the case with Uniqly.io. It’s worth considering early on how broad or specific you want your marketplace to be.
The tokens supported on the marketplace
Most NFT marketplaces support a wide variety of tokens, whereas the more niche ones are closed and use a specific proprietary token. Again, it’s important to decide early on which way you want to go, as this will likely determine your target audience. Remember that every new user opening up an account on your marketplace will need to make sure that they’ve funded their blockchain wallet with the right token required to participate.
Rarible's options for wallet connection
The level of security in the marketplace
Security is paramount when it comes to transactions on a marketplace, and users often conduct research into whether there have been any security breaches on a given marketplace in the past. That’s why focusing on security from the outset is the key to success when creating a new NFT marketplace, and we’ll go into more detail on this in a separate blog post.
What is a white-labeled NFT marketplace?
In a nutshell, a white-label product or service is one that is produced by a specific company for use by other companies, who incorporate their own brand into it. A white-label marketplace essentially has all the backend and frontend of the marketplace already set up, meaning that a company can add it’s own branding and UI, import it’s NFTs and quickly get started.
It’s also worth remembering that a white-label marketplace is merely a foundation for further customization, meaning that new features and functionality can always be added at a later stage.
The core components of a white-label NFT marketplace
Below are the main components that every NFT marketplace should contain:
The Storefront - This is the first thing that users see when they access your platform. It should hold information about bids, owners, price history and other key information about buying and selling NFTs.
The Crypto Wallet - It’s paramount that your users have a safe and secure space in which to store and submit their tokens. Make ease of use a priority by offering a connected, ‘native’ wallet, rather than asking them to sign up via external wallets.
The Auction - Your NFT marketplace should give users the option to buy and sell NFTs and to bid on them. Don’t forget all the elements that are crucial to the ‘auction’ functionality, such as the date and time that the bidding closes, buyer information about the status of their bids, and an auction watchlist.
An NFT Search - Make it easy for your users to find the NFTs that they’re looking for, through a handy search bar. At the same time it’s great to have a search menu that is listed by categories, such as videos, memes, art, music and other NFTs - to give users an at-a-glance indication of where to browse.
Filters - Similar to the ‘search’ function above, filters on an NFT marketplace allow items to be found easily. Be sure to include multiple relevant filters, including those related to price, best sellers, new items and top deals.
Listings - Give your users the ability to send and create collectibles if needed. The best way to do so would be to create a page on which they can provide a file and fill in the relevant information, including things such as title description and tags.
Ratings - This feature is mainly useful to those users who are new to the platform. As they’re likely to have little knowledge of how NFTs work and their value, seeing what other users think about a particular seller’s reliability is particularly handy. The highest ranked users are rewarded for their efforts through increased views of their product.
What are the steps to building a white-labeled NFT marketplace?
Below are the top workflow elements that our developers follow when building a white-label NFT marketplace.
Selection of the right blockchain technology
A white-labeled NFT marketplace can be built on a number of blockchains, including Binance Smart Chain, Ethereum, Polygon, Solana or others.
Top NFT marketplaces have a clean UI that makes it easy for users to navigate the platform. Alongside an intuitive interface, you might choose to include sign-posts or tutorials which would be beneficial to first time users.
The Coding of Smart Contracts
Smart contracts are the core component of any transactions on the marketplace, and are integral to its security. If you’d like to read up more about how they work, take a look at our complete Guide to Smart Contract Security.
Integration of IPFS Storage
IPFS is a distributed system for storing and accessing files, websites, applications, and data - and it’s important for storing all the NFTs in your NFT marketplace. DB storage on the other hand, is used for storing user data.
Backend and Frontend Integration
The crucial final step of development is the integration of the frontend and backend, as well as the IPFS and DB storage.
The platform is always tested on the Testnet to identify vulnerabilities and to fix any bugs before deployment.
Deployment in the client’s environment
You may choose to release the beta version for selected users to feed back on before you launch your marketplace globally.
Get ready to launch your NFT marketplace quickly and easily
If you have a strong concept for your NFT marketplace, and are not sure how to get started with bringing it to life, our team can help. Our developers have solid experience in building NFT marketplaces; our UX team is deeply dedicated to delivering a stellar user experience, while our design team can create amazing illustrations which turn the entire white-labeled platform into something that truly reflects your unique brand.