NFT Marketplace Development: 6 Key Steps

NFT Marketplace Development: 6 Key Steps

NFT
Reading time:
25 min
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1500
Published:
06.06.2024

Building an NFT (non-fungible tokens) marketplace presents a great opportunity for entrepreneurs in the realm of digital collectibles and blockchain. NFT marketplaces serve as instrumental catalysts in driving the mass adoption of Web3 and facilitate a significant part of on-chain transactions.

An NFT marketplace is a hub where users can purchase, sell, and trade non-fungible tokens. Offering complete transparency and openness, these platforms record all transactions on the blockchain, effectively deterring fraudulent activities. There are a lot of advantages to developing an NFT marketplace, including enhanced control and customization, elevated user experience, fortified security measures, diversified revenue streams, and future-proofing capabilities.

In this guide, we will consider every stage of NFT marketplace platform development from inception to completion. These stages include market research, blockchain launching, smart-contracts creation, and others.

Mastering the art of NFT marketplace creation holds great potential for individuals keen 

NFT marketplace: definition and examples

Before we answer the question “How to create an NFT marketplace?”, it's vital to consider the definition of such a marketplace. 

Essentially, an NFT marketplace serves as a virtual hub for trading and acquiring non-fungible tokens. These tokens are digital assets that represent the proof of authenticity or ownership of digital content or unique items using blockchain technology (art, music, videos, collectibles). Additionally, creators have the opportunity to mint and showcase their NFTs within this digital space. 

Based on insights from Technavio's research, the market is forecasted to witness a substantial increase of USD 147.24 billion between 2021 and 2026. Given this projection, establishing an NFT marketplace emerges as a highly promising venture for entrepreneurial pursuits.

There exists a variety of NFT marketplaces, each with its own set of regulations, fees, and payment methods. Here are a few noteworthy examples:

  • OpenSea: Widely regarded as one of the premier NFT platforms globally, OpenSea boasts an extensive array of digital artworks spanning music, imagery, sports collectibles, and more. It supports over 150 different digital currencies.
  • Nifty Gateway: Renowned for its association with high-profile sales such as Beeple's CROSSROAD and Pak's The Merge, Nifty Gateway has risen to prominence in the NFT landscape. Its success may serve as inspiration for those considering launching their own NFT platform.
  • Rarible: Similar to OpenSea, Rarible is celebrated for its diverse range of artworks and collections available for purchase. Notably, Rarible is community-owned and firmly committed to decentralization principles.
  • SuperRare: Recognized for its emphasis on artistry, SuperRare offers a platform reminiscent of an art gallery, providing a curated selection of artworks for enthusiasts and collectors alike.
  • AtomicHub: One of the top NFT marketplaces specializing in digital art. Trading occurs using the native Wax coin or token, allowing registered users to engage in transactions as low as 25 cents. Establishing an NFT collection on this platform is remarkably straightforward.

Pros of developing an NFT marketplace

NFTs are rapidly gaining popularity, with their robust security, transparency, authentication models, and seamless processing serving as key drivers behind this surge. Moreover, an increasing number of individuals seek to invest in a democratized economy with fewer hurdles and constraints than traditional investment systems. This leads to the NFT marketplaces dominating the charts.

Beyond the aforementioned advantages, let's delve into additional benefits of NFT marketplace platform development:

Versatility

Many NFT marketplaces, such as Rarible, empower creators and artists to showcase their creations online, attracting a diverse array of buyers. Investors can peruse, purchase, resell, and utilize these items for various purposes, ranging from creative projects to personal collections. 

The versatility of NFT marketplaces lies in their ability to tokenize virtually anything, including rare posters, video clips, tweets, memes, code, puzzles, recordings, and autographs. This broad spectrum appeals not only to collectors and art enthusiasts but also to professionals in fields such as decor, design, landscaping, and aesthetics.

Diverse development use cases

For forward-thinking individuals interested in futuristic development, NFT marketplaces serve as an ideal starting point. These platforms intersect various industries, including finance, fintech, cryptocurrency, digital tokens, crypto wallets, and more, fostering innovation and offering endless business opportunities.

Liquidity mining

Liquidity mining entails rewarding users with crypto tokens, such as RARI tokens on platforms like Rarible, for their active participation in NFT marketplaces. These tokens can be utilized for accessing rare items, voting, participating in auctions, submitting new ideas, or trading on cryptocurrency exchanges for profit. This enhances user engagement and incentivizes involvement.

Hybrid blockchain implementation

Leveraging hybrid blockchains and multiple blockchain networks within NFT marketplaces enables the integration of many features and functionalities that cater to a broad range of business use cases. This approach fosters innovation and experimentation within the blockchain segment.

Enhanced transparency, reduced complexity

Unlike conventional marketplaces burdened with complex transaction management systems and regulatory compliance, NFT marketplaces offer heightened transparency and simplicity. Built on blockchain technology, these marketplaces ensure secure, transparent transactions without the complexities associated with traditional online platforms.

Early market entry opportunities

While saturation may eventually occur in the NFT marketplace and blockchain-based businesses, there exists a window of opportunity for experimentation and testing of various business approaches. Early entrants stand to benefit from establishing themselves in the industry, attracting customer audiences with less competition, refining their blockchain utilization, and capitalizing on the evolving landscape.

Simplified development and deployment

Given the nascent stage of NFT marketplace app development, particularly in customizable solutions like White Label NFT marketplace development, creating and deploying these platforms is relatively straightforward. Launching a unique, easily manageable, and transparent marketplace becomes achievable with the right expertise in NFT development and blockchain consulting.

The process of work of NFT marketplaces

If you are looking for the answer to the question on how to create NfT marketplace, it is vital to understand the full development process. Below, we will consider the mechanics behind this process:

Token generation

  • User registration: Users initiate their journey by registering an account on the marketplace.
  • Digital wallet: This wallet is compatible with different currencies and is an essential component of NFT storage.
  • Minting: Through a process termed "minting," users transform digital files into NFTs

Buying and selling

  • Listing: Minted NFTs are showcased for potential buyers.
  • Browsing and searching: Buyers navigate through listings either manually or via search functionalities.
  • Acquisition: Upon selection, NFTs are purchased and transferred to the purchaser's digital wallet.

Trading and auctions

  • Trade proposals: Users can engage in NFT trading, often facilitated by bidding mechanisms.
  • Auctioning: Alternatively, NFTs can be auctioned off to the highest bidder.

Transaction validation

  • Smart contracts: Transactions are securely executed through smart contracts.
  • Blockchain ledger: Each transaction is recorded permanently and securely on the blockchain.

Fees and charges

  • Transaction costs: Both transacting parties may require fees comprising those mandated by the marketplace and the blockchain.

Community and social enhancements

Integrating these elements can significantly bolster community engagement and interaction surrounding the digital assets within your marketplace:

  • Discussion forums and chat rooms: Platforms for discourse and community bonding.
  • Social media integration: Users can amplify marketplace reach by sharing listings or acquisitions.
  • User feedback and ratings: Trust-building tools aiding buyers in their decision-making process.
  • Leaderboards and gamification: Injecting a competitive element to enhance user engagement.
  • Live events and educational webinars: Offering supplementary value and knowledge, fostering community expansion.

Now, let’s consider the main features that should be in your NFT marketplace solution.

NFT marketplace key features

Similar to any online marketplace, NFT marketplaces must prioritize seamless and hassle-free customer services to enhance revenue and popularity. It's vital to focus on user experience for both sellers and buyers, ensuring a wide range of services. Add comprehensive service portfolios, diverse functionalities, and an intuitively designed marketplace to maximize reach. Here are some key considerations in this regard:

  • Storefront: An exceptional storefront with captivating product displays not only attracts buyers but also entices sellers to choose your marketplace. Opt for a clean, sophisticated, and organized, user-friendly layout that needs minimal effort to navigate. Incorporate quick links and dedicated sections for sales and auctions to streamline the user experience.
  • Search function: Implement smart and advanced search functionality with auto-suggestions for products and categories to expedite the search process for customers. Introduce category suggestions to enhance search precision and broaden search results, making the marketplace more engaging and user-friendly.
  • Filters: Incorporate filters to refine search results and simplify customers' browsing experience. Extensive filtering criteria enable users to quickly find desired items, enhancing the marketplace's overall usability. Comprehensive filter options personalize the shopping experience for different customers without complicating the process.
  • Listing: Simplify and optimize the product listing process with intuitive navigation elements to ensure an impeccable user interface. Provide guides, informative content, and concise instructions to enhance user experience and attract more people.
  • Buying and auctions: Offer both fixed-price selling and auction functionalities to cater to a wider audience and engage sellers and buyers in rare collectibles and limited edition niches. While fixed-price selling is straightforward, auction features require precise development efforts to facilitate fair and unbiased transactions.
  • Wallets: Accept popular crypto wallets to accommodate a diverse range of users, considering associated processing fees and regulatory requirements. Ensure compliance with regulations and certifications for utilizing certain crypto wallets.
  • Ratings: Implement rating, review, and feedback systems to establish seller credibility and assist buyers in making informed purchase decisions. Monitor seller activity and product quality through ratings and reviews to combat fraudulent activities effectively.
  • Bidding options: Enhance auction engagement by offering multiple bidding options such as sealed bids, online bids, and auction bids, providing users with a comprehensive bidding experience.

Factors to consider before starting NFT marketplace creation

Before starting the development process of an NFT marketplace, it's imperative to consider a few key factors to create a project that will be successful. Below, we've outlined these crucial points:

Define your marketplace's features

To tailor your NFT marketplace to the needs of your target audience and set it apart in the market, it's essential to determine the core functionalities and features. These may include asset listings, user registration systems, bidding mechanisms, payment gateways, and dispute resolution systems. 

Enabling users to create their own NFT collections, akin to the functionality offered by platforms like OpenSea, can be particularly enticing. This involves using specialized smart contracts to append metadata to each new asset, encompassing vital parameters such as name, uniqueness, and blockchain address, thereby empowering users to list their tokens for auction or set prices for trading.

Choose between custom and ready-made solutions

When deciding between options to build NFT marketplace from scratch or use templated solutions, it's crucial to weigh the strategic implications. Opting for a custom development approach affords greater flexibility and control over the project's features and NFT marketplace architecture diagram. But this approach requires more time, resources, and expertise. Conversely, ready-made solutions offer expedited deployment and cost savings but may impose limitations on customization possibilities.

Select an appropriate revenue model

Balancing profitability with user satisfaction is paramount in devising the revenue model for your NFT marketplace. Revenue generation typically revolves around advertisements, fees, and royalties for creators of non-fungible tokens. Offering royalties provides creators with a recurring income stream, but striking the right balance is essential to avoid deterring users with inflated trading fees.

Hire a reliable NFT marketplace development team

Collaborating with an experienced and reputable development firm specializing in blockchain technology is essential to realizing your vision for the NFT marketplace. Before selecting a service provider, thoroughly examine their portfolio and seek feedback from previous clients to ensure their competence and reliability.

At Peiko, we boast a track record of successfully completing blockchain projects. Check out our comprehensive portfolio, which showcases our expertise in complex architecture and robust Web3 tech stacks.

6 main steps to create an efficient NFT marketplace solution

The development of the NFT marketplace presents an opportunity for both startups and established enterprises to generate profit in the dynamic NFT market.

At Peiko, our approach to the NFT marketplace development process comprises several key steps aimed at ensuring a tailored and robust platform:

Step 1: Conduct in-depth study

Begin by determining your target audience and understanding their expectations from a marketplace solution. Key considerations for this step include:

  • What kind of items or non-fungible tokens do you intend to trade and feature on your marketplace?
  • Are you targeting an international audience or a local area?
  • Which wallets, features, and types of NFT trading do you plan to offer?
  • If your focus is on artists and creators, what specific services, features, and information flow should be incorporated into your marketplace?

In general, a clear understanding of your business model, target group, and service offerings will help you optimize development and enable personalized services for your end users.

At Peiko, we conduct thorough market analysis to identify the target group and potential niches within the NFT market, such as artworks, sports memorabilia, gaming assets, music, or real estate. This helps us tailor the solution to meet the specific demands of your target audience and identify competitive advantages.

Step 2: Launching the blockchain network

Tailoring our approach to your unique requirements, we strategically select the most suitable blockchain network to serve as the foundation for your NFT marketplace. Should you desire a closed ecosystem for NFT distribution and trading among a select group of individuals, we possess the expertise to build a bespoke private blockchain from scratch. Our experts will ensure its seamless integration with your platform.

Step 3: Creating smart contracts

Next, our team works on the design and coding of smart contracts, the backbone of NFT creation and transaction execution. Through rigorous testing protocols, we validate the integrity of the smart contract code, mitigating any potential vulnerabilities that could compromise the security of your marketplace and providing users with peace of mind in their interactions.

Step 4: Implementing the NFT marketplace

Applying our technical prowess, we implement your vision in reality by crafting a sophisticated web-based marketplace boasting an intuitive and aesthetically pleasing user interface (UI). 

Here are the integral steps we undertake during the design phase:

  • Crafting a wireframe: This delineates the visual elements of your platform or application.
  • Selecting style guides: They aid in envisioning the appearance of UI elements in your NFT platform.
  • Creating mock-ups: These encompass both visual and structural features.
  • Building a prototype: Prototypes serve to elucidate the functionality of your platform to users, akin to demo versions.

Apart from the front end and the visual part of the project, we also work on the back end of the solution. Sellers are empowered to seamlessly upload their digital assets while buyers navigate effortlessly through the platform to acquire the associated tokens, fostering a seamless exchange of value.

Step 5: Setting up crypto payment gateways

Facilitating frictionless transactions lies at the core of our ethos. We integrate market-leading cryptocurrency payment gateways such as CoinGate, BitPay, and Coinbase Commerce. This empowers marketplace users to buy, sell, and transfer NFTs seamlessly, in addition to facilitating payments for ancillary services offered within the platform.

Step 6: Establishing security

Recognizing the paramount importance of safeguarding your marketplace against different cyber threats, we deploy a robust suite of cybersecurity measures. From implementing cutting-edge asymmetric data encryption to fortifying API authorization controls and even leveraging AI-powered fraud detection algorithms, we leave no stone unturned in fortifying the security posture of your platform. 

Furthermore, we design and implement comprehensive data backup protocols, accompanied by user-centric cybersecurity guides, to empower users to navigate the platform securely.

We also thoroughly test the solution before launching it. Our team can help you with further support for your marketplace.

Top NFT marketplace development tools

The creation of an NFT marketplace involves leveraging different services and tools tailored for specific purposes. Below, we will consider some commonly used NFT marketplace development tools:

Smart contract development tools

Smart contracts serve as the foundation of any NFT marketplace, facilitating the creation, transfer, and management of diverse digital assets. Solidity is a renowned tool for crafting smart contracts across various Blockchain platforms like Binance Smart Chain or Ethereum.

The Truffle Suite stands out as one of the top frameworks streamlining the development process. This tool helps to enhance the testing and deployment of smart contracts and bolsters efficiency and reliability.

Blockchain platforms

Selecting the appropriate blockchain platform is crucial for establishing an NFT marketplace.

  • Binance Smart Chain: Offers scalability and cost-effectiveness, presenting an appealing alternative for developers seeking Ethereum-compatible solutions.
  • Ethereum: This blockchain platform is widely favored for its support of ERC-721 and ERC-1155 standards.
  • Cardano: This blockchain can boast its focus on scalability, sustainability, and interoperability. 
  • Solana: It is recognized for its high-performance blockchain network, which can process thousands of transactions per second with low fees. 
  • Polygon: Formerly known as Matic Network, Polygon is a layer 2 scaling solution for Ethereum that enhances its scalability and reduces transaction costs.

Wallet SDKs

Integration of a wallet is essential for seamless user interaction with NFTs. MetaMask facilitates asset management and dApp interaction on Ethereum-based platforms. For example, WalletConnect facilitates secure communication between mobile wallet applications and dApps, enhancing accessibility across various platforms.

Databases

Databases can differ in terms of data structure and decentralization:

  • IPFS: InterPlanetary File System is a decentralized storage solution for NFT metadata, ensuring accessibility and immutability without reliance on centralized servers. IPFS enables the distribution of files across a network of nodes. This enhances data integrity, and minimizes censorship risks.
  • MongoDB: This tool provides flexibility in schema design, making it suitable for NFT marketplaces dealing with diverse metadata structures and asset types. With MongoDB, NFT platforms can efficiently manage large volumes of unstructured data associated with digital assets,
  • PostgreSQL: Its extensibility and SQL compliance make it a versatile choice for NFT marketplace development, accommodating complex data models and query requirements. With PostgreSQL, NFT platforms can leverage advanced features such as full-text search and JSONB data type. This enhances searchability and flexibility in managing metadata associated with digital assets.
  • MySQL: This database solution offers strong ACID compliance, ensuring data consistency and reliability critical for NFT marketplace transactions and user interactions. NFT marketplaces leveraging MySQL benefit from its robust transaction support, facilitating secure buying, selling, and trading of digital assets.

Frontend frameworks

Developers employ frontend frameworks like React and Angular to design intuitive user interfaces for non-fungible token applications. These frameworks offer scalability, robustness, and a vast ecosystem of tools and libraries, facilitating seamless integration of features such as bidding, asset browsing, and collection management.

Security auditing services

Comprehensive security audits are vital for finding and mitigating potential vulnerabilities in smart contracts. Services like OpenZeppelin and CertiK specialize in smart contract auditing, utilizing code analysis and testing to address security flaws effectively.

Payment gateways and integration APIs

These tools are vital for facilitating smooth transactions within non-fungible token marketplaces. Platforms like Stripe and Coinbase Commerce offer robust payment processing solutions, supporting fiat-to-cryptocurrency conversion and ensuring a seamless user experience.

NFT standards and their implementation in NFT marketplace development

When it comes to building and operating a successful NFT marketplace, it is vital to adhere to established standards is crucial for ensuring interoperability, security, and ease of use. Here are some of the prominent NFT standards:

  • ERC-721: This is the most widely adopted standard for non-fungible token development on the Ethereum blockchain. ERC-721 allows for the creation and management of unique, indivisible tokens, making it ideal for representing digital assets like artwork, collectibles, and in-game items.
  • ERC-1155: It is Ethereum's universal token standard that enables the management of both non-fungible and fungible tokens within a single smart contract. ERC-1155 offers greater flexibility compared to ERC-721, allowing developers to create tokenized assets with varying degrees of uniqueness and scarcity.
  • ERC-998: This standard enables the creation of composite NFTs composed of both non-fungible and fungible tokens. ERC-998 tokens can be traded as a single non-fungible asset, making them suitable for representing complex digital assets or collections.
  • ERC-4610: A liquidity protocol that facilitates non-custodial lending of NFTs, such as tokenized unique in-game assets. This standard introduces innovative solutions for unlocking liquidity from illiquid NFT assets, enhancing the utility of NFTs within decentralized finance ecosystems.
  • ERC-6551: This standard enables the creation of unique NFT-bound accounts (digital wallets). So, managing all NFT-associated assets and transactions in one place is possible. It simplifies the user experience by offering a unified interface for interacting with NFTs across different applications and platforms.
  • BRC-721E: A novel standard that allows traders to convert Ethereum-based NFTs into Bitcoin NFTs. This standard facilitates cross-chain interoperability, enabling users to transfer and trade NFTs across different blockchain networks seamlessly.
  • BEP-721, BEP-1155: Binance Smart Chain (BSC) NFT development standards, analogous to Ethereum's ERC-721 and ERC-1155. These standards enable developers to create and manage NFTs on the Binance Smart Chain ecosystem, offering functionalities and benefits similar to those of their Ethereum counterparts.
  • BEP-129: Binance Smart Chain's NFT standard is created for GameFi applications. This standard introduces features tailored to the needs of gaming projects, such as in-game asset representation, interoperability, and fractional ownership.
  • TZIP-12: Also known as FA2, it is a non-fungible token development standard used on the Tezos blockchain. The standard provides a framework for creating and managing NFTs on Tezos, ensuring compatibility and consistency across different Tezos-based applications and platforms.

By applying these NFT standards in marketplace development, developers can enhance the functionality, usability, and interoperability of their platforms. In the next section of our NFT marketplace development tutorial, we will consider the main issues you may face when building such a solution

Challenges in NFT marketplace software development

Building NFT marketplace poses various challenges. Here are several common hurdles, along with strategies to address them:

  • Evolving regulations: The field of NFTs is relatively nascent, leading to ambiguity in regulatory frameworks. Staying abreast of legal developments and collaborating with legal professionals versed in the Web3 industry is imperative. This ensures compliance with regulations and mitigates legal risks.
  • Copyright concerns: Selling NFTs involves trading digital art, music, and other creative assets, raising potential copyright issues. To preempt this, clear policies and guidelines for users must be established, and their rights to trade their NFTs must be verified.
  • Ensuring user safety: Security is paramount in the Web3 realm, and users must feel secure within your marketplace. Prioritize safeguarding users' information and digital assets to foster trust and encourage marketplace utilization.
  • Distinguishing your platform: With the rising popularity of NFT marketplaces, distinguishing your platform becomes increasingly challenging. To carve out a unique identity, emphasize valuable features, prioritize user-centricity, and deliver a seamless experience tailored to your target demographic.

The Peiko team is your trusted blockchain development partner

At Peiko, we excel in software and blockchain development services and have extensive expertise, proven by many client reviews on well-known platforms such as Clutch. Our portfolio includes various projects, such as crypto wallets, crypto exchanges, ecommerce NFT platform development projects, and more. 

Take, for instance, Quan2um, a cutting-edge cryptocurrency exchange that facilitates the seamless purchasing and selling of Bitcoin Additional, Bitcoin, and various altcoins. Renowned for its top-tier security adhering to European standards, Quan2um has a bonus system for new users and a multi-level commission structure. 

In our NFT exchange platform development process, we tackled implementing a versatile resource management system. This system needed to offer flexible settings, enable seamless role management, and straightforwardly handle coins and trading pairs.

Central to our project was the integration of a robust matching system for user bidding. This system was designed to accommodate various order types, facilitating both buying and selling transactions.

To incentivize user growth, we introduced a dynamic referral program. Existing users were rewarded with bonuses for inviting friends to register and fostering community expansion. We also ensured our platform's visibility by indexing it with search engines, culminating our efforts with comprehensive accessibility and reach.

Turn to us if you need a reliable NFT marketplace or any other blockchain project. With Peiko, your blockchain endeavors are in capable hands.

The expense of creating an NFT marketplace

The cost varies depending on project specifics, including desired functionalities, chosen technology stack, and features. Factors such as integrations, blockchain platforms, and API integrations significantly influence development costs. Additionally, project complexity and the NFT platform development duration also impact overall expenses.
Outlined below is a tabulated overview of development costs to provide a general understanding:

FeatureCost range
Admin panel$3000 – $10,000
Author panel$5000 – $14,000
Authorization and security$3000 – $8000
Buyer panel$3000 – $7000
Ethereum incorporation$4000 – $11,500
Home page$3500 – $5,000
Inventory management$2000 – $5000
NFT management$4000 – $11,500
Notifications$1000 – $2000
Payments$2000 – $5000
Reviews & ratings$1000 – $2000
Product page$2000 – $5000
Search and filters$4000 – $11,500
Shopping cart$2500 – $5500
UX/UI development$2200 – $5000

So, the total NFT marketplace software development cost is estimated between $45,000 – $125,500. For precise price, turn directly to your Web3 development services provider.

Final thoughts

Now that you've got the answer to the question on how to create NFT marketplace. If you're not well-versed in the tech aspects, turning to an experienced blockchain development firm becomes essential. The reliable development service provider will craft an NFT marketplace according to the specific requirements of your user base.

At Peiko, we are always glad to help. Turn to our company, which specializes in software and blockchain creation. We will build a dependable, secure, and intuitive NFT marketplace related to your needs.

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