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Do you know how to create an NFT marketplace and how do you go about it?
Entrepreneurs and artists alike may be interested in how to create an NFT Marketplace of their own, like OpenSea, Axie Marketplace, Rarible, and Foundation.
It’s an admirable–and hopefully profitable–mission. And doing so is very much a mission in every sense of the word. But before we dive into the hows, let’s take a quick beat to brush up on NFT basics:
What is an NFT Marketplace?
If you’re looking into creating one, you probably already have a sense of what an NFT marketplace is, but here’s the short of it: Simply put, an NFT marketplace is a platform where people can trade digital assets.
Anyone can buy or sell art, including music, within the virtual world when using an NFT marketplace but how to create an NFT Marketplace?
NFT marketplaces use a blockchain architecture that creates a read-only record that holds a unique, non-fungible token.
“Once a token has been burned onto the blockchain, it provides the buyer of the NFT with a failsafe proof of ownership that can be verified in the public domain,” says Hans Hansen, CEO of Brand3D, a 3D technology company that creates immersive experiences for consumers in an array of industries including AI, 3D technologies, M2M automation and more.
How to Create an NFT Marketplace in 5 Steps
Before you start building your own NFT marketplace, take some time to think about what will make your offering special and set it apart from the rest.
Determining a niche can help you cater to an engaged audience that is ready to buy. Having a clear objective is key here. Once you are confident in your offering, it’s time to really get to work.
1. Choose a Blockchain Architecture
This first step can easily be described as the most complex part of the process–and for good reason. Deciding on your NFT marketplace’s blockchain technology will impact many other pieces of your venture.
You can choose to go with an existing blockchain technology, like the widely used Ethereum or also frequently used Solana, Polygon, or Cardano.
Going this route can be expensive–we’re talking like $50K+–because you will likely need to employ the help of specialized developers as the integration to these existing blockchains is very complicated.
And after the initial integration, every transaction (sale of an NFT) will incur a cost. This is referred to as a “Gas Fee” within the NFT space.
Alternatively, you can implement your own blockchain architecture, but this can make the establishment of trust a little more dicey.
Essentially, Hansen explains that a homemade architecture does not offer the same guarantees against third parties getting access to and altering the blockchain records.
“There are numerous providers of these alternative blockchain architectures, often referred to as side chains as they often offer an optional integration with a mainstream blockchain like Ethereum.”
There are several such marketplaces in the market such as Opensea, Rarible and others.
“They all share the common trait that their users must trust the integrity of these closed architectures that are operated by a single company,” says Hansen. Which brings us to our next step:
2. Decide Between an Open or Closed Market
Creators will also have to decide if they want an open or closed NFT marketplace. A closed NFT marketplace will utilize a specific proprietary token.
An open marketplace will support a wide variety of tokens. OpenSea is the leading marketplace for NFTs currently, as it supports more than 150 types of payment tokens.
In an open market anyone can create an account and start listing their items at whatever price they desire.
This creates a kind of “supply and demand” pricing model. Further, in open markets buyers won’t have to worry about the NFT compatibility with a particular blockchain when buying or selling digital assets.
3. Define your style
Once you determine the backend specifics of your blockchain tech and market type, it’s time to get to the frontend of things. This will include the UI/UX design of your marketplace.
What kind of experience do you want users to encounter? What will be the look and feel of your marketplace’s homepage? How will you feature your NFTs?
Whatever you decide, just ensure that the design is both user-friendly and accessible.
4. Decide on a Commission Fee
With your marketplace looking how you want it to and running as it should, it will be time to decide: “What will I charge?”
Think about the monetization model you are going to implement and how you’ll collect your fees. Stay competitive and be careful not to overcharge, it’s easy for users to find other providers–so you’ll want to offer value along with quality NFTs and trustworthy security.
As a first-time marketplace in a competitive space you’ll want to put an emphasis on connecting with your buyers and building a community.
Once your artwork and marketplace are ready for users, consider granting new customers access rights to an exclusive club to help further incentivize repeat purchases.
You can also utilize traditional social channels or consider joining a platform like Discord, a messaging software similar to Slack, where gamers and crypto enthusiasts connect.
Should You DIY Your Own NFT Marketplace?
And now that we’ve made it through the basic steps, it may be more obvious how to create an NFT marketplace is no simple task.
It’ll take more effort than setting up an Etsy shop or a Shopify account–but it also can be all the more worthwhile.
That being said, if you are new to the game, it may be wise to start out by partnering with an existing marketplace to get a feel for what works and what doesn’t–not to mention save on some costs while you learn and further define your unique offerings.