The global non-fungible tokens sales volume reached $18.5 billion in 2021. These recent findings by Forkast show that the NFT market is thriving more than ever before.
This screaming popularity of non-fungible tokens encouraged many household names such as McDonald’s, Gucci, and Coca-Cola to produce their NFT items. Thus, the latter had released a Coca-Cola NFT loot box to celebrate International Friendship Day. The multi-sensory NFT four-piece collection was auctioned on the biggest NFT marketplace, OpenSea, and sold for a winning bid of almost $575,883.
The growing interest people show in NFT trade makes entrepreneurs wonder how to create an NFT marketplace and make it a profitable business. Having a well-thought-out plan increases your chances of success.
To make things easier for you, we created a step-by-step guide on NFT marketplace development. Follow the steps below, and you will find out how to conquer this profitable market.
- Step 1. Define your audience and niche
- Step 2. Take precautions against common threats
- Step 3. Consider the UX/UI design of your future NFT marketplace
- Step 4. Define the required functionality
- Step 5. Choose the NFT marketplace development approach
- Step 6. Find a development team to build your NFT marketplace app
- Step 7. Release an MVP first
- Step 8. Launch a fully-featured NFT marketplace website
State of the NFT market
To answer the question of how to develop an NFT marketplace that will thrive, you need to understand clearly what the NFT marketplace is, how it works, and how it makes money.
Definition of an NFT marketplace
The information below will help you scrutinize this subject area from different angles: definition, typical workflow, and business model. Armed with these valuable insights, you will be able to determine how to create an NFT marketplace that will stand out from the competitors.
In the simplest terms, an NFT marketplace can be seen as an e-commerce platform where users can buy and sell digital assets such as digital art, collectibles, gaming items, audio records, etc. These assets are linked to blockchain technology, namely Ethereum, and are called non-fungible tokens.
Each NFT is unique, meaning we cannot exchange it for the same digital asset simply because there is none. For that very reason, they are referred to as non-fungible tokens.
How do NFT marketplaces work?
Let’s take a look at the NFT marketplace workflow for sellers.
To start selling on an NFT platform, users need to register an account and set up and connect a crypto wallet. There are three most popular types, namely hosted wallets, non-custodial wallets, and hardware wallets. The choice depends on what users are going to do with their crypto and the kind of security net they require.
The next step is to create an NFT and specify all parameters. After that, digital items can be listed for sale. Here, sellers should wait for some time until the moderation is complete.
As soon as an NFT is approved, buyers place their bids when the auction takes place. When the auction is over, the NFT marketplace app transfers cryptocurrency and digital assets.
Schematically, the non-fungible marketplace platform’s workflow looks the following way:
Here, we should mention the specific transaction protocol used on NFT marketplaces, which is responsible for connecting two sides of the platform and contains identifying details related to an NFT. The protocol, which makes the NFT trading process simple and user-friendly, is called a smart contract.
How do NFT marketplaces make money? Let’s take a look at the most popular monetization strategies adopted by the most popular NFT marketplaces.
- Listing fees – the NFT platform charges sellers for posting (listing) their digital items.
- Transactions processing charges – the marketplace takes a certain percentage from each transaction on their platform. For example, OpenSea charges a service fee of 2.5% for each sale.
- Initial setup fees – the NFT marketplace charges content creators to list their first non-fungible token.
- Bidding charges – buyers pay a particular fee for bidding successfully for a digital asset they want to acquire.
- Affiliate programs – some NFT trading platforms may introduce specific affiliate programs for their partners.
Exciting statistics about the NFT market listed below explain why entering this lucrative domain seems like such a good idea.
- NFT sales reached $4.48 billion in January 2022.
- Non-fungible token trading volume increased by 704% between Q2 and Q3 of 2021.
- The number of unique sellers has grown from 27,963 in January 2021 to 759,145 in January 2022. At the same time, the number of unique buyers has increased from 29,581 in January 2021 to 910,611 in January 2022.
- The number of crypto wallets trading in non-fungible tokens has risen dramatically as well, from 545,000 in 2020 to 28.6 million in 2021.
- The most precious NFT item was sold for $91.8 billion.
- The first tweet by Jack Dorsey, Twitter founder, was sold as an NFT for $2.9 million.
The latest NFT marketplace trends
Now let’s check the latest trends that will boost your NFT marketplace business.
- The rise of celebrity NFT marketplaces. The growing popularity of non-fungible tokens has encouraged many famous people to launch their NFT trading platforms. This way, stars attempt to get closer to their fans. Apart from unique, expensive digital assets, celebrities can offer online or in-person meetings, exclusive sessions, and other utilities.
- Multi-chain NFT platforms. As you may guess from its name, NFT items can be created with the help of different blockchain technologies. Such marketplaces appeared as a result of the adoption of environment-friendly, cheaper, and faster networks by members of the crypto community. Though their development requires a considerable investment of resources, time, and money, cross-chain capabilities can give NFTs more exposure.
- Online ticket NFT marketplace website. Nowadays, we can witness the rise of NFT marketplace apps offering tickets to live events such as concerts and games. These platforms are designed to reduce the number of fraud cases common to the traditional ticketing system, where customers risk buying a fake ticket instead of a real one.
Biggest industry players
If you wonder how to create an NFT marketplace that will thrive, you need to know your competitors, their strengths and weaknesses, and the functionality they offer.
Below you can see the list of the biggest and the most prominent NFT trading platforms:
- Nifty gateway
How to create an NFT marketplace
Now when you know what an NFT marketplace is and how it works, we can proceed to the main stages of NFT marketplace development. Armed with this guide, you will be able to answer the question of how to create an NFT marketplace website and succeed.
Step 1. Choose your niche
The first step to launching a thriving custom NFT marketplace business is to choose the right niche. By narrowing your focus, you will be able to provide users with extra value.
Another benefit of the niche approach is a more personalized user experience to allow users to find the digital assets they are interested in much faster.
Let’s take a closer look at the most popular NFT marketplace niches:
NFT for art
This niche has the greatest potential since art, in the broadest meaning of this term, is the main digital asset in the NFT world. Today, buyers can purchase any digital artwork for a reasonable price. At the same time, these non-fungible tokens are the simplest way for creators to gain profit. However, if you consider launching an NFT art marketplace app, be ready to face fierce competition.
NFT trading platforms for music
This niche is similar to the previous one since we still are talking about art. Here, artists can sell their tracks to any buyer who may like them. This way, NFT marketplaces make musicians more independent from labels. Also, fans of a famous rock band get the chance to purchase one of their demos to be closer to their idols.
NFT marketplaces for games
Speaking about video games, users can buy a great variety of items–character avatars, weapons, clothes, to name a few. You may launch a platform that offers gaming items for a certain game or universe. Alternatively, you go even further and create your own game like CryptoKitties or battle or Guardians.
Below you can see characters from the video game CryptoKitties as NFTs.
NFT marketplaces for sport
Recent research by Deloitte predicts that NFTs for sports will generate over $2 billion in 2022. Sales of players’ cards or video clips showcasing the significant sporting moments will generate the most revenue. However, it is worth noting that the true value of a digital asset of such type will be defined by the prominence of the athlete and the importance of the event.
NFT marketplace for characters
Finally, you can consider developing an NFT marketplace that sells online characters. A good example of such a platform is CryptoPacks, which offers over 100,000 unique avatars. So you may follow their lead and create your NFT community. Your task here is to limit the number of possible characters and provide each of them with a distinctive look. This way, you will be able to attract more users to your platform.
Step 2. Protect your future NFT marketplace app against common threats
There is hype around non-fungible tokens encouraging fraudsters and hackers to invent more and more sophisticated ways to steal NFT items and money.
To answer the question of how to create an NFT marketplace that will be carefully protected against scammers, we will discuss the common security threats peculiar to the NFT domain and the proven ways to prevent them.
- Smart contracts vulnerabilities – if you leave them unattended, hackers can take advantage of these vulnerabilities, and the reputation of your NFT marketplace app will be harmed.
- Marketplace security risks – users should set a strong password, use two-factor authentication, and avoid clicking on questionable links to prevent them.
- Cybersecurity issues – hackers may try to access the personal information of users by sending them malicious NFTs and emails.
- Authentication process – the fact that NFTs can be sold anonymously and the lack of regulations to govern the NFT trade make them perfect for hiding money that has been earned illegally.
The following effective measures will help you prevent these issues:
- Perform the audit of smart contracts. Here you need to use the services of a smart contract audit company that will analyze the code, design, and architecture of smart contracts and will identify flaws, if any.
- Take the decentralization principle strictly. The NFT market should not access the private keys, and the decentralization principles must not be violated. Apart from that, smart contracts that hold non-fungible tokens must be accessed via a multi-signature.
- Inform users about the key security measures. Remind users about two-factor authentication and strong password and ask them not to keep the secret recovery phase on their devices or share it with anybody.
Step 3. Consider the design of your future platform
Since non-fungible tokens are a relatively new concept, NFT marketplace development and design may be challenging tasks.
Check the UX/UI tips below and you will be able to launch a visually appealing and user-friendly NFT marketplace app.
Focus on your niche
To start with, the design of your custom NFT marketplace should fit a niche you have chosen. When you optimize the layout of your non-fungible tokens website and its content to address the unique needs of your specific target audience, you will be able to drive more traffic to your platform and increase your customer base.
From one look at the interface of Sorare, it is clear what the platform is about. This Global Fantasy Football NFT platform allows fans to buy, sell, and trade digital players’ cards.
Consider using parallax animation
Parallax animation is a scrolling technique where illustrations or other pieces of the content move across the background as users scroll through a website.
The growing popularity of this trend can be explained by the fact that they help navigate users in a visually appealing way.
Use the dark theme
Today many websites use the dark mode. NFT marketplace apps are not the exception. Actually, there are several reasons why you should use this latest UX/UI design trend when developing an NFT marketplace.
First, a dark theme focuses users’ attention on the digital assets your platform offers rather than on the abundance of colors.
Second, it is more comfortable and does not cause eyestrain.
Finally, dark mode gives your custom NFT marketplace a futuristic look, which suits this new domain perfectly.
Myth Market, which is a series of NFT trending platforms, knows how to use the dark mode the right way:
Opt for a simple interface
Last but not least, make your NFT marketplace interface simple to the max. Your platform will have lots of content to attract users. Therefore, your task is to build a clear website structure and straightforward navigation to focus on content and not overload users with extra details.
Step 4. Choose the required functionality
Unique features are what distinguish your non-fungible token marketplace website from similar platforms. For this reason, you should carefully consider the functionality you want to implement when developing an NFT marketplace.
Below you can see the list of features you should build to start:
- Homepage. It deserves your primary attention since the homepage is the first page of your NFT trading platform your users see. Hence, your task is to give visitors a clear understanding of what digital assets can be found there and how they can be purchased.
- Registration. Allow users to register their personal accounts to store and manage digital assets.
- Visually appealing storefront. The crucial information specified there includes bids, value, owners, pricing history, preview, etc.
- Search bar. This feature allows users to find a desired digital asset in no time by entering a specific keyword.
- Filters. They serve the same purpose as a search bar, namely, to help users find a required non-fungible token fast. When you divide all NFTs on your platform into certain categories, you make the searching process much easier.
- Creating listings. Enable users to build and send collectibles. Make sure this process is fast and hassle-free. For this purpose, create a page where users can submit a file with certain NFT data such as title, description, and tags.
- Listing status. Since each non-fungible token on your platform should pass the verification process, you need to add functionality that allows for checking the current NFT status.
- Bidding option. Allow users to both purchase NFT items and bid on them. Remember that flexible pricing may attract more users to your platform. Here, you should enable them to check the expiration date for the auction and monitor the current state of their bid so they can decide whether to purchase an NFT item or to place a new bid.
- Wallets. They serve as a secure place to get and store their digital assets. To avoid security issues, you need to offer users “native” or connected wallets rather than make them sign up with other online wallets.
- Ratings. Allow users to rate sellers and leave feedback. This way, it will become easier for newbies to find the most credible and reliable sellers.
Step 5. Choose the development approach
Now we are getting to the burning issue that has concerned you all this time–how to create an NFT marketplace. Let’s discuss the available options.
White label non-fungible token marketplace development
This approach implies buying a ready-made software solution from a vendor. You can further rebrand it to your liking.
The key benefits of off-the-shelf solutions are cost-effectiveness and effort-saving. By choosing this approach, you can launch your NFT trading platform in no time. However, be aware that these solutions lack features you may need. Besides, you cannot get enough control over the quality of this product.
Custom software development
It is the best approach if you want to create a unique NFT marketplace app. Sure, it can be more costly and challenging compared to ready-made solutions, but in the long run, it is worth the cost.
You will get a specific product with unique architecture and functionality built based on your market analysis and your particular business requirements.
A great benefit of bespoke software is its security, which is the top priority for the NFT domain. Specialists from custom web development companies are equipped with different security tools that will protect your platform from malicious activities and fraudulence.
Step 6. Hire an experienced NFT development team
If you consider building a non-fungible token marketplace from scratch, your task is to find an experienced NFT development team to take on your project. Their extensive domain knowledge will help you figure out how to create an NFT marketplace the right way.
Besides, such companies provide full-cycle development services, meaning they will help you conduct market research, identify the core requirements for your NFT project, and monitor your platform after its successful launch.
Technical skills required for NFT marketplace development
For starters, software developers should have a good grasp of Cadence, which is a high-level language used for smart contract development. Basically, they should be able to write three main programs such as contracts, transactions, and scripts.
Apart from that, specialists from a software development company you partner with should have experience working with Solana. The high speed of this blockchain technology makes it a solid competitor to Ethereum and Cardano.
Solana has its own minting program called Candy Machine, which enables the NFT development team to concentrate on the artwork instead of creating new smart contracts. The term “minting” implies publishing a unique ERC-721 non-fungible token on the blockchain.
It is worth noting that the usage of Solana requires a good knowledge of C, C++, and Rust.
The full list of technologies required for NFT marketplace development looks the following way:
The tech stack used for NFT marketplace development
|Binance Smart Chain||An ecosystem designed especially for NFT and DeFi apps. Compatible with Ethereum Virtual Machine.|
|Flow||An ecosystem developed especially for NFT games and collectibles after the launch of CryptoKitties|
|EOS||A dGoods standard, especially for NFTs. Enables using one smart contract for NFTs and fungible tokens.|
|Tron||A TRC-21 standard developed for non-fungible Tokens. It is aimed at entertainment and social media apps.|
|Solana||The system is known for its increased transaction speed and low transaction fees|
|Cosmos||An ecosystem that enables users to exchange digital assets across various blockchains|
|WAX||A carbon-neutral blockchain that provides vIRL NFT standard that works well for V-commerce and makes game integration possible.|
|Polkadot||A decentralized platform that allows users to perform transactions between different blockchains without any third parties.|
|Cardano||The first public blockchain platform, which was built based on peer-reviewed research.|
Step 7. Build an MVP first
To reduce the possibility of the product’s failure, we recommend creating an MVP first. It is a software product with minimum functionality to explain to users what your NFT marketplace app is about. This approach is a great way to validate your business idea without too much investment.
A minimum viable product should have only primary features to keep your users focused on your main offerings. You will always be able to add new features to satisfy the evergoing demands of your target audience.
Step 8. Launch a full-fledged NFT marketplace
As soon as you ensure there is market demand for your NFT trading platform, you can gradually add new features. To define the success of your product launch and features that should be implemented during the next iteration, you need to use the engagement metrics from pioneer users.
When it comes to further releases, it would be a great idea to combine different promotional strategies to highlight the launch of a new product version. Thus, you will be able to gain new audiences faster.
Also, it is important to release regular updates of your NFT trending platform. This way, you make your NFT marketplace app more competitive.
How much does it cost to create an NFT marketplace?
The cost of an NFT marketplace is defined by your particular business requirements and the functionality you want to implement. How many features do you want to add? Are you planning to build a complex interface and navigation?
Apart from that, the usage of the most reliable, secure, fast, and thus, trending blockchain networks such as Ethereum, Avalanche, or Solana will increase the cost of an NFT marketplace solution.
Based on our experience, we can say for sure that the NFT marketplace development cost starts at $50,000-60,000 for an MVP project. The ceiling value is limited only by your imagination and the number of resources you are ready to spend.
As you can see, the NFT hype is not over. On the contrary, with each passing day, this lucrative domain attracts more and more entrepreneurs wondering how to create an NFT marketplace to enter this game.
If you want to follow their lead and launch a profitable NFT marketplace business, Syndicode is ready to help. We will explore your subject idea thoroughly and build a unique digital solution. Feel free to contact us, and we will gladly assist you further.
Frequently asked questions about NFT marketplace development
Speaking about the technology stack commonly used for NFT marketplace development, we should mention React.js and Vue.js as key technologies for building client-side and Python, Kotlin, Swift, and Node.js as the main server-side programming languages. MongoDB, MySQL, and PostgreSQL are the most common database management systems, and Amazon Web Services is the most popular solution for cloud hosting. Regarding blockchain technologies, a popular choice is Solana, a public blockchain platform. It uses such programming languages as C, C++, and Rust.
There is no unified answer to this question since each NFT project is unique. Here we refer to a number of features that should be implemented and the overall complexity of each particular function. The more sophisticated functionality you want to offer users, the more time the software development team will need to build them. Besides, if you want to launch an MVP version with very basic features, it will take less time compared to the release of a full-fledged NFT marketplace solution. If you want some specific timelines, a minimum viable product of an NFT marketplace app will take from six to nine months. If you want to make an NFT website with diverse functionality, it may take from nine to twelve months to build.
First, Syndicode has vast experience in building custom marketplace solutions. We have delivered a great number of product and service marketplaces for different industries, so we know what functionality should be built and what technology stack should be used.
The first killer feature we should mention is the variety of payment gateways. Allow users to use the payment option they prefer, be it a credit or debit card, net banking, or wire transfer. Also, allow users to purchase NFT items with Tether they buy on crypto exchange and transfer to their crypto wallets. This way, you ensure the credibility of your NFT marketplace platform. Also, it would be a good idea to create a page or section with trending collections where the average price for a non-fungible token, the name of its seller, trading volume, and total supply are specified. The thing is that some digital assets get high selling prices when they are highlighted the right way in the specific section. Finally, we should mention that live auctions allow selling the most popular non-fungible tokens to prospective buyers.