When Malaysian millionaire Sinai Estavi purchased the first tweet of Jack Dorsey in the form of an NFT for $2.9 million, he explained such a weird investment by the inherent scarcity of crypto assets. “One day people will realize the real value of unique digital tokens to pay for them as they pay for Mona Lisa today,” he said.
A huge international army of NFT creators and buyers shares such a vision most probably when judging from the current situation on the booming NFT market. The price for NFTs varies from cents to dozens of millions of dollars: the most expensive tokenized artwork has been sold at Christie's for $69 million.
While creators, investors, and buyers have ambitious far-reaching plans for their NFTs, some pragmatic people prefer making money off NFTs just at any given second. They are the founders of NFT marketplaces who get commissions from each NFT purchase. There is nothing revolutionary new in such a business model: crypto exchanges and conventional trading platforms work similarly. The only new thing there is the very object of trade - non-fungible tokens.
The global NFT market promises to keep growing further due to certain objective reasons. And if so, NFT marketplaces will proliferate. The niche is not empty while still having enough room for new players. Smart entrepreneurs have a lucky opportunity to appear in the right place at the right time. In the present post, we are going to explain how to create an NFT marketplace. But it is worth beginning from some fundamentals on tokenized assets.
What NFTs Are and Why They Stand Out
The first mass hysteria about NFTs happened in December 2017 when the Ethereum blockchain appeared almost frozen with an enormous number of people wishing to purchase CryptoKitties. They are digital collectibles in the form of non-fungible tokens running on the Ethereum blockchain. CryptoKitties as such is a game based on collecting and breeding digital kitties, each of which is an NFT token with unique characteristics. The very NFT technology provides the uniqueness of CryptoKitties.
Basic NFT properties help understand why such assets stand out. The very name of the tokens reveals how they act: “non-fungible” means non-interoperable, unique, unparalleled. In contrast to interchangeable cryptocurrency tokens that are equal in terms of inherent characteristics, each NFT remains only one of its kind. An NFT is not a unit of exchange but is rather a certificate that confirms the right of ownership for whatever. Hence, NFTs represent some property rights wrapped in the blockchain. To put it simply, a non-fungible token is a computer file used in a distributed ledger to specify the owner of a particular digital asset.
Such functionality provides an NFT with a certain value that can be determined by various factors. Creators of NFTs propose the initial “floor price” of their tokens arbitrarily. When tokens appear on the market, the demand for them determines their commercial price in each subsequent deal when buyers pay for tokens. Besides direct sales from owner to owner, NFT auctions are popular among digital asset holders.
Another value-determining factor is the very object wrapped in an NFT. The range of tokenized assets keeps widening. Various digital artworks such as graphics, memes, photos, collages, logos, music tracks, and videos constitute the majority of NFTs today. In-game units such as weapons, game characters, and cheat codes are transformed into NFTs to leave purely gaming environments for a wider market. CryptoKitties, by the way, are the first tokenized game characters that have gained financial popularity as NFTs.
Real estate is another segment where tokenized property certificates have strong prospects. Mintable NFTs marketplace offers real estate and other utilities as NFTs. Tokenized equities and other investment instruments fit the NFT technology well. The so-called fan-tokens minted by celebrities reflect the NFT trend that demonstrates the fastest dynamics nowadays. To summarize, any segment where property rights can be tokenized can appear on the NFT market. The only task is to create NFT marketplace to let tokens circulate between sellers and buyers. But more on that later.
Why the Global NFT Market is Destined to Growth
To realize whether NFT is not a short-term hype that can fade away as rapidly as it has appeared, observing segments that have been already covered with non-fungible tokenization is necessary.
- Digital art and gaming seem to be the first fields where NFTs start unfolding. Gamers, video game creators, artists, museums, and galleries keep adopting NFTs to follow the digital zeitgeist. The director of the State Hermitage Museum (St.Petersburg, Russia) said that “NFTs make luxury art more accessible” when the museum arranged an NFT auction via Binance NFT marketplace in July 2021. Some famous masterpieces of Leonardo, Giorgione, Van Gogh, Kandinsky, and Monet have been wrapped in NFTs to let buyers purchase exclusive digital copies of the artworks. It is worth expecting other world-famous museums and galleries to follow the Hermitage in making NFT copies of art masterpieces for sale.
- Official NFT-based copies of music and movies seem to become a universal weapon against pirated copies that violate property rights. Licensed digital collectibles from cinema studios such as The Godfather and Lost in Space add arguments to such a mission of NFTs. “NFTs provide a great way to bridge the gap between consumers and artists” - Lindsay Lohan said regarding the tokenized revenue model.
- Fan-tokens are gaining momentum worldwide. This is where celebrities can kill two birds with one stone: holding strong fan bases while earning extra royalties from NFT sales. Justin Bieber, Lionel Messi, Snoop Dog, and many other superstars have already released their NFT collections for fans. Football clubs such as Man City, Juventus, Arsenal along with many NBA basketball clubs are selling their fan NFTs for hundreds of millions of dollars according to BBC. The trend is apparent, and the day is not too distant when all famous entities and personalities will release their NFTs as either tokenized fan collections or licensed copies of their intellectual properties.
- Global social networks are still lagging in the race of NFTs. However, some pioneers are available on the way. We have already mentioned the first tokenized tweet by Jack Dorsey. Twitter is crypto-friendly in general. It is worth expecting new NFT initiatives from its founders. Another example of social media in this context is quite a fresh American network Parler that has released an NFT collection devoted to Donald Trump. Facebook Financial (or F2) is planning to add an NFT functionality to its Novi digital wallet while Instagram developers are working on NFT integration to let users make a living from the network. Personal 3D avatars created by AI as well as exclusive AR filters seem to be the best-tokenized features of social media in the NFT paradigm.
- Consumer goods are also covered with NFTs today. The famous brand GAP has released its NFT collection Gap Threads for those who would like to exchange tokens for exclusive series of Gap clothes. Nike is going to use its 3D gaming platform Nikeland to turn products of such trademarks as Nike, Jordan, and Just Do It into NFTs. Nike’s competitor Adidas has already earned about $20 million from the sale of its NFT collection called “Into The Metaverse” while planning the tokens to be exchangeable for physical hoodies and tracksuits in 2022. Both Pepsi Cola and Coca-Cola announced their presence in Metaverse with their NFT collections.
As we see, NFTs can have diverse origins being backed by world-famous superstars and super brands. The universal applicability to almost any segment is inherent in the very NFT technology that provides tokenized ownership. Both the growing public interest and yet uncharted financial capabilities of NFTs encourage technological advancements to appear when more and more distributed ledgers start adopting NFTs. Besides the main NFT carrier, Ethereum with its NFT standards ERC721 and ERC1155, the other leading blockchains such as Binance, Tezos, Cardano, Solana, Polygon, and the like provide the digital space where NFTs can circulate.
The already available NFT marketplaces demonstrate rampant development. The story of OpenSea alone is enough to realize that the “NFT + marketplace” bundle is a reliable receipt for success in these days of digital. At the same time, the segment of NFT marketplaces can be legitimately considered as in the embryonic stage. Both the number of NFT marketplaces and their sales volumes are far from what conventional e-marketplaces demonstrate. But in contrast to any other goods or assets traded on e-marketplaces, the average annual price growth of NFTs reaches an order of magnitude.
Hence, thinking strategically, creating an NFT marketplace seems to be one of the best opportunities to occupy a still poorly explored but extremely promising niche in the contemporary ecommerce business.
What an NFT marketplace Is and How It Works
In contrast to cryptocurrencies like Bitcoin or Ether the operations with which can go through just crypto wallets, NFTs require special trading platforms where sellers and buyers can interact. Users spent $44.2 billion for NFT-related smart contracts ERC721 and ERC1155 while making transactions via NFT marketplaces in 2021. Despite the relative infancy of the NFT segment, leading NFT marketplaces had set the tone in the must-have functionality of any NFT platform.
A typical NFT marketplace is a sort of combination of an online store, an auction, and a blockchain platform capable of minting NFTs. An NFT marketplace should allow users to create, sell, and buy non-fungible tokens right on the platform. Besides, an NFT marketplace should have quite traditional features of online marketing for the engagement and retention of customers. If you are planning to build NFT marketplace make sure its structure consists of the following:
Storefront. This feature provides users with comprehensive data on each traded item: name, price, description, preview, owner, way to buy, rating, etc. To let users ascertain the authenticity of items, there should be info about both the blockchain upon which a token is minted along with the NFT standard applied;
Search. Users should be able to find any item on the platform with ease. Special filters that can simplify navigation through items of the same type should be available. It is worth dividing all listed NFTs into categories such as graphics, music, domains, video, memes, utility, and the like;
Registration/Signup. The feature allows users to create their profiles on the platform. In addition to a typical dataset required from users for registration (name, phone number, email, links to social media, etc), a crypto wallet address should be indicated. Newcomers still having no crypto wallets should be offered links to the most popular crypto payment providers: Coinbase Wallet, MyEtherWallet, MetaMask, and the like. Only the wallets that support NFT protocols are valid;
Ads & uploads. The function helps users create their ads in a simple way similar to what they do on other trading platforms such as eBay, for instance. After uploading an NFT, users should add any accompanying info they want: name, description, price, tags, links, etc;
NFT Wallet. This is an embedded on-platform crypto wallet through which users can sell, buy, and store NFTs. Since NFTs run through smart contracts, only cryptocurrencies are applied to NFT deals. Smart contracts determine relationships between buyers and sellers of digital items in a human-free automated manner relying on the digital assets’ metadata protected by the blockchain technology. The easiest way to implement such a function is to integrate it with leading crypto wallet providers;
History. This is where users can track their activities on the platform. Also, this feature provides users with insights on how popular the marketplace is, which items are in the greatest demand, how prices are fluctuating, and the like;
Ratings. Reviews, comments, likes, and ratings can hint at the behavior to be expected from a certain item on the platform. Besides, such info helps users assess other buyers and sellers. Comments can be accessible as for all registered users as for just those peers between whom a deal has happened;
Customer Support. This is an essential feature for any marketplace to answer FAQs and resolve possible conflicts between users. Various ways to arrange customer support are available: call-centers, emails, messengers, chatbots, on-platform information portals, etc.
Before getting to the creation of your own NFT marketplace it is worth reviewing some industry leaders to grasp their experience and peek at the functionalities they prioritize.
Best NFT Marketplaces
All NFT marketplaces can be conditionally divided into two big categories in terms of the right to mint tokens. The first category includes platforms that allow every user to mint NFTs as well as to set any royalty. While providing wider affordability such marketplaces attract more fraudsters that discourage serious asset holders. NFT marketplaces of the second category assign responsible persons eligible to mint tokens only while deals are charged with higher commissions. Besides, royalty is set by the platform there. Such marketplaces offer high-quality exclusive assets. In addition, NFT marketplaces can be either narrow-specialized when only a certain type of token is offered (in-gaming items, for example) or non-specialized when all token types are available.
This is the largest NFT marketplace leaving all the rest far behind. The success story of this platform is illustrative in the context of what has happened on the NFT market over the last couple of years. OpenSea founders Alex Attalah and David Finzer were very upset in March 2020 when the COVID pandemic was gaining momentum. After 26 months of operation, OpenSea had only $28,000 of monthly revenue with only 40,000 users. But circumstances were changing rapidly. In August 2021 when NFT hype was at its peak, the monthly sales reached $3.4 billion on the platform bringing $85 million of monthly commissions to OpenSea. The expenses of the platform were hardly exceeding $5 million/month at that time. Besides, the company received $100 million of venture investment from Andressen Horowitz in July 2021.
Now, the average monthly sales volume is about $2 billion. The user base of OpenSea is 1.8 million people and it keeps growing. Having 70 employees in its team OpenSea is actively hiring dozens of new specs. Rumors about another round of investment that can reach $10 billion do not seem too exaggerated.
OpenSea combines all essential features of a universal NFT marketplace that offers a diversity of tokens beginning from digital artworks up to domains and utilities. Besides, OpenSea provides several functions for auctions being fully integrated into the crypto infrastructure. In addition, OpenSea acts as an aggregator when listing items from other marketplaces.
The platform supports such blockchains as Ethereum, Polygon, and Klaytn. The acceptable cryptocurrencies for payments are ETH, WETH, USDC, and DAI. OpenSea supports a variety of crypto wallets: MetaMask, Coinbase Wallet, TrustWallet, Portis, Arkane Network, Aethereum, and others.
NFT sellers pay commissions the amount of which fluctuates depending on the time of the day, demand in the network, and other factors. It can even exceed the price of the item in some circumstances. This is because of the amount and price of the so-called “gas” (the special instrumental shares of ETH used by the Ethereum blockchain as measurement units for computation work) spent when a token is minted. The transactional commission is 2.5% while royalty can not be more than 10%.
The second-largest NFT marketplace has roots in Moscow. The platform specializes in digital collectibles mostly. Rarible is going to become a true DAO (decentralized autonomous organization) with its special utility token RARI. The token owners can manage the platform when they vote for upgrades, participate in content curation, and moderate items.
One of the most critical distinguishing features of Rarible is that NFT creators earn royalty each time their tokens are re-sold on the platform.
Registration is free on Rarible while uploading items costs a certain amount of ETH as a platform’s commission. Royalty is unlimited (0 - 100%), however. The supported cryptocurrencies are ETH, DAI, ATRI, and RARI. A bunch of supported crypto wallets is available: MetaMask, Trezor, Ledger, Exodus, etc.
In addition to user-friendly functionality, the platform can boast a spotless reputation. One of the top crypto exchanges Gemini purchased Niftygateway in 2019 when the current NFT boom was barely predictable. Hence, the platform is centralized with a certain ambition to attract famous brands and artists for the creation of unique tokens Nifties accessible through this marketplace exclusively. Various NFT categories are available on the platform. Every three weeks a new collection appears for a certain limited period.
The key feature of this NFT marketplace is an opportunity to pay for tokens in fiat currencies (USD, EUR, JPY, RUB, etc). NFT issuers can use conventional credit and debit cards to withdraw their revenue from the marketplace. The acceptable crypto is ETH.
Items’ listing is free on Niftygateway while the platform commission is 15%. Similar to Rarible, this marketplace allows NFT creators to earn extra from each resale of their items. The platform takes 5% in such a case while creators receive 10%. Royalty varies within 5 - 50%.
This is a decentralized NFT marketplace that allows users to mint their tokens without using “gas”. It means token creators do not have to pay rewards to Ethereum miners. Also, Mintable represents an opportunity to create on-platform e-stores as storefronts of profiles for token holders. The range of NFTs is diverse: digital artworks, collectibles, in-game units, domains, utilities, and even real estate are available on the platform.
The supported cryptocurrency is ETH. Crypto wallets include MetaMask, Trust Wallet, and Rainbow.
There are two types of marketplace commission: 2.5% for those who create NFTs using “gas” and 5% for “gas-free” tokens. Royalty cannot exceed 10%.
This super-stylish NFT art marketplace significantly differs from all the above-mentioned ones. Foundation is an auction rather than a marketplace. The one who proposes the highest price can grab the item. Only exclusive artworks are available. Even though the listing of tokens is free, the only way to appear on the platform is to be invited by someone who is already registered there. Such a system of joining seems to limit the platform’s user base. However, this is explainable since Foundation is oriented towards serious and rich art collectors. They have a closed community on Discord.
The only supported cryptocurrency is ETH while the only acceptable wallet is MetaMask. The platform charges each purchase a 15% commission. Royalty is 10%
There are dozens of other NFT marketplaces on the market today. At the same time, the segment is far from being overheated on the global scale. A certain competition between the existing NFT marketplaces takes place but, as we see in the given examples, exclusive features help the platforms outstand and occupy their niches. Besides, the current number of unique NFT wallets is just about 300,000 according to stats. The total user base of all NFT marketplaces can hardly comprise a dozen million. Needless to say, the true global NFT hype is still ahead, therefore.
Things to Consider When Building an NFT Marketplace
An NFT marketplace is a complex software solution that requires a certain sequence of actions to be deployed. We will consider the stages of a typical SDLC (software development life cycle) to be applied to an NFT marketplace. But before it is worth paying our attention to some specific properties inherent in any NFT platform.
The core technology of NFTs is blockchain. Many people who stand far away from the technology may consider crypto as a way to hide transactions from public observations. Blockchain is allegedly suitable for money laundering. The exact opposite is true: the vast majority of existing blockchains are publicly accessible ledgers where all transactions are recorded with no technical possibility to either change or hide anything. The history of any token is purely transparent by default. Transparency of crypto transactions is provided automatically at the level of code via smart contracts. One of the main functions of smart contracts is to eliminate negative human factors from the NFT market.
Of course, fraudsters and hackers will never disappear completely. They will keep inventing various technical tools and social engineering approaches to make the token economy less transparent. Hence, any owner of an NFT marketplace should follow the native transparency of crypto while building a platform. In other words, both the structure and functionality of an NFT marketplace should facilitate the traceability of tokens rather than complexify a circulation of NFTs. The “History” feature aimed at tracking transactions is worth paying special attention to, therefore.
In our context, security belongs to keeping the strong privacy of users. Their personal data must be securely protected. Since NFTs determine property rights for digital assets, this is about money after all. Money and personal data are the most sensitive things ever. Any respectable NFT marketplace must have a full scope of up-to-date technologies for data protection such as 2F authentication, multi-stage validation, self-custody, and the like.
Integration with leading crypto wallets adds security to NFT marketplaces. AI-based analytic systems are worth implementing to analyze users’ behavior: fraudsters use social engineering tricks mostly. Another important aspect of marketplace security is backup capabilities: if an NFT marketplace cannot set up a profound backup process on its own, collaboration with some specialized backup & recovery providers can help.
Yet another security topic that is particularly critical for any sort of crypto project is blockchain education. The very blockchain technology has specific nuances, ignoring which leads to irreversible loss of crypto funds. This is about self-management of public/private keys of crypto holders, inter alia. An educational portal should be an integral element of any NFT marketplace’s help center: thousands of troubles are fading away when users acquire basic crypto-security principles.
Distributed ledgers (blockchains) set a foundation for any crypto initiative. Decentralization is inherent in the very consensus method with which blockchain nodes validate crypto transactions - mining. The majority of NFTs are minted via Ethereum blockchain that runs under two consensus technologies: proof-of-work (traditional mining) and proof-of-stake (capital-based validation). Thousands of independent nodes across the network provide a guarantee that no single point of failure is available in the blockchain. Such a decentralized quality of distributed ledgers should be repeatedly announced by NFT marketplaces as frequently as possible with any occasion. This is especially important for novice users who are going to invest significant funds into NFTs.
Another big advantage of crypto decentralization is that crypto assets are relatively independent of the global banking system, national monetary policies, and traditional limitations of fiat currencies. Cryptocurrencies belong to communities of holders, not to governments. Anyone can join the communities by just starting to use one or another crypto. The emerging inflation of leading national currencies has no impact on crypto. Hence, NFTs seem to become a safe haven for those investors who are looking for assets capable of holding their funds invulnerable to inflation. Moreover, the current trend of the continuous price growth of NFTs promises to multiply the invested capital as little else does. This is where NFT marketplaces can play the role of aggregators of huge investment flows freely running through borders and constraints.
4. Monetization Model
NFT marketplaces can hardly differ too much in terms of their monetization models. Charging every transaction with a certain commission brings to any NFT marketplace a lion’s share of the revenue. This is the simplest and, probably, the most reliable way to earn money. Non-crypto marketplaces, exchanges of all sorts, auctions, and various trading platforms have been using such a model for decades.
NFT marketplaces should not reinvent the wheel in this regard. The only point of difference is the appetite of marketplace owners. Every particular commission percentage reflects how confident they are in the lifespan of their business: the larger the less.
Some other sources of revenue can be set up by NFT marketplaces, however. Taking a share of NFT creators’ royalty is one of them. This is just another sort of commission that sounds quite ordinary for NFT creators. Besides, some NFT-around services can be offered to users: premium profiles with advanced gallery storefronts, cross-platform NFT listing, SEO & promotion, etc. Either a subscription model or separate tariffs can be applied to the services.
5. Smart Contracts
Smart contracts provide a very specific transactional technology that works nowhere else beyond crypto. They determine relationships between buyers and sellers within a particular crypto deal. The famous programming principle IFTTT (if-this-then-that) allows the creation of automatically executable contracts that require no human interaction. Being applied to cryptocurrencies, smart contracts allow the selling and buying of crypto assets in mass. Besides, smart contracts guarantee the validity of any crypto purchase when buyers receive what they buy while sellers receive money (in crypto). Since every NFT is backed by a smart contract created under corresponding blockchain standards (ERC… if Ethereum, BEP… if Binance’s BSC, etc), both buyers and sellers should rest assured that nothing is wrong can happen with their assets during the deal.
Steps to Building an NFT Marketplace
Everyone who is planning to build an NFT marketplace should realize that such a complex software solution requires a team of professionals having relevant expertise along with a wide hands-on experience. It makes no difference whether the platform is to be created from scratch or a clone of an existing marketplace is to see the light. The following steps demonstrate what both the project owners and software developers have to go through while building an NFT marketplace.
Step 1: Discovery
To assess the project in terms of operability, software developers need the project owners to answer many conceptual and technical questions. The following ones are just a few examples:
Which NFT niche should the marketplace operate in? This is about the platform specialization: either a certain type of NFTs will be focused (as it goes on Foundation) or all possible NFTs will be available (OpenSea);
What is the platform’s target audience?
Which NFT standard/standards should be used?
Which technology stack can be applied?
What will be the monetization model?
What features can set the platform apart from competitors?
Which additional services will be available?
Answers to those questions help determine the most appropriate development approach and create a software design specification. Not every question can be easy to answer. This is when true professionals are to rescue: they can describe the project owner’s ideas with schemes and visuals and prepare technical requirements to begin development.
After both a general concept and an SDS are completed, the developers can plan their workflow and indicate an estimated development period and project budget (more on that later).
Step 2: Designing & Development
When the development specification is finalized, designers together with business analysts start prototyping a user interface of the future NFT marketplace (mockups, layouts, frames, etc) along with a description of user flows and basic functionalities of the platform. Thus, a general architecture of the marketplace appears.
UX/UI The marketplace usability, user experiences, and the first impression of the platform all are determined by the platform’s user interface. The UI design is critical, therefore. Besides, it should be user-friendly to let any visitor who is familiar with eBay or Amazon easily grasp how the marketplace works.
Back-end/Front-end The back end is about the entire server side of the platform. Besides an ordinary business logic and functionality of the platform, interactions with blockchains, smart contracts, and crypto-wallets should be set up. An exemplary crypto core of backend stack for an NFT marketplace can include the following:
- Blockchain: Ethereum, Binance Smart Chain;
- Token standards: ERC 721/1155, BEP 721/1155;
- Smart contracts: Ethereum VM, Binance VM;
- Frameworks: Hardhat, Tuffle, Brownie, OpenZeppelin;
The front end is responsible for interactions with end-users. The client-side stack of an NFT marketplace might include the following:
- Frameworks: React.js, Express.js, Node.js;
- Languages for Web: Angular.js, Backbone;
- Languages for mobile: Kotlin, Swift;
- IDE: Android Studio, Xcode;
- SDK: Android SDK, iOS SDK, OpenSea SDK (if cloning).
Before deployment, a QA team proceeds with all possible tests to make sure no bugs and critical errors remain. A finished NFT marketplace should run through all possible operation scenarios to check the usability, security, and integrability of the system at maximum load.
Step 4: Deployment/Support
After finishing QA tests, an NFT marketplace should be deployed either on on-premise servers or in a cloud. The deployment as such is not the last stage since post-deployment technical support goes next. Subsequent development and system upgrades provide meeting customer expectations and emerging market trends. And again, only professional development vendors have enough technical and labor resources to arrange fully-fledged post-deployment support for an NFT marketplace.
Ready Solutions vs Custom Marketplace Development
Out-of-the-box solutions and custom development are the two approaches to the creation of an NFT platform. Not too many ready-to-use tools are available on the market today. They provide quite a short time-to-market along with a relatively low cost of development. It can be either SaaS (software-as-a-service) or PaaS (platform-as-a-service) solutions with content management systems and APIs. The most popular one is OpenSea SDK.
However, a truly original NFT marketplace that meets customer expectations most comprehensively can appear via custom development only. To facilitate an understanding of why custom development is worth applying to an NFT marketplace the pros and cons of the approach should be considered.
Pros of custom development
Security. Malicious activities and fraudulence are what threaten NFT marketplaces mostly. In contrast to ready-to-use solutions, no limitations in terms of security tools and technologies are inherent in custom development.
Compatibility. Various optimization practices provide custom solutions with any desired degree of compatibility with whichever devices and platforms. Wide integration capabilities allow changing and adding blockchains and crypto wallets at any moment either before or after the NFT marketplace deployment.
Scalability. Neither the number of listings nor the size of the user audience can hamper the workflows of a custom NFT marketplace. Limits to growth are unavailable, therefore.
Functionality. Only the sky's the limit considering new features and functions to be implemented in a custom solution. Moreover, a custom system can be upgraded and modernized at any post-deployment period.
Cons of custom development
Management. A team of managing specs has to be available to operate a custom NFT marketplace properly. The staff provides technical maintenance and customer support. At the same time, such a team exempts the marketplace owners from operation routines to stay focused on business strategies.
Price. Custom solutions are always more expensive than template-based ones. Even though the functionality/cost ratio is usually better than the one ready-to-use tools have, an external investment may be required.
Time. Personalized solutions require relatively long development periods. A custom NFT marketplace deserving to work years and years cannot be created in a matter of weeks as it happens with ready-to-use solutions.
To summarize, the development approach depends on the business outcomes a customer expects from the future NFT marketplace. If the goal implies playing on a par with the industry leaders (that is remaining fairly possible in the current NFT market situation) using the leaders’ approach to development makes sense: all top NFT marketplaces are custom. If the goal is to appear on the market as soon as possible with no regard to how it can end up, out-of-the-box solutions can be used.
How Much Does It Cost to Create an NFT Marketplace?
The amount of work necessary to complete an NFT marketplace determines the cost of development. To figure out the exact amount of necessary work is hardly possible without a thoroughly conducted discovery phase during which an SDS (specification) appears.
Cost/time determining factors may significantly vary from case to case: functionality, architecture, the number of blockchains/wallets, integrations, NFT niche all can impact the final calculation.
Relying on our own experience we can offer the following average scope of work for creating a custom NFT marketplace:
- Back-end development (servers, databases, administration, asset management, payments, etc): 360 hours;
- Front-end development (UI, panels, profiles, categories, notifications, ratings, etc): 420 hours;
- Blockchain integrations (cart, wallets, history, NFT management, etc) 280 hours;
- Total: 1060 hours
Software development vendors from different locations have different hourly rates. Developers from Eastern Europe cost $35/hour on average. Hence, a custom NFT marketplace can cost about $37,000 if being developed in Ukraine, for instance.
Despite a certain hype around NFTs that has been emerging since 2020, the general situation in this specific crypto segment still can be characterized as “infancy”. The global user audience is just starting to adopt digital assets as a worthy investment object. Those dozens of available NFT marketplaces can hardly satisfy the growing mass interest in non-fungible tokens. Hence, new NFT marketplaces will have to appear sooner rather than later.
The current state of affairs on the crypto market represents a couple of strong arguments against procrastination in establishing new NFT marketplaces. On the one hand, the niche of NFT marketplaces is remaining half empty in terms of both the available competitors and prospective user audiences. On the other hand, the success stories of leading NFT platforms such as OpenSea provide living proof of the explicit viability of such a profitable business model as the NFT marketplace. Hence, building a custom NFT marketplace right now means appearing in the right place at the right time in the context of true business luck.
Contact us today not to miss your chance to occupy a lucrative niche of tokenized digital assets with a professionally created custom NFT marketplace. Both an individual approach and special pricing are guaranteed.