Non-fungible tokens (NFTs) have earned their fame in recent times due to mass adoption by famous individuals and an influx of Web3 enthusiasts who had been thinking of a use case for their crypto holdings. Even though NFTs have been existing for close to a decade (at the time of writing), analysis says that there was not much traction for these digital tokens until very recently. The NFT boom of 2021 was fuelled by NFT digital marketplaces, which became the favorite spots for creators, influencers, celebrities, and even brands. We will see which model works better for an NFT digital marketplace platform business.
NFT marketplace business models are of two types: Vertical and horizontal. Vertical NFT digital marketplaces are platforms where users can trade niche-based NFT assets. Popular vertical NFT marketplaces include Foundation, Nifty Gateway, SuperRare, Decentraland, NBA Top Shot, and Sorare. These platforms cater to a niche-based audience and try to thrive within the space available through raising entry barriers and curating listings in some cases. Horizontal NFT digital marketplaces are platforms where people can trade various generic NFT assets. Famous horizontal NFT marketplaces include OpenSea, Rarible, Solsea, AtomicMarket, NFTrade, and LooksRare.
Both NFT digital marketplace platform business models have their own perks and cons. While vertical marketplaces provide ventures the comfort of working within a particular niche, the fate of the platform depends on how the niche performs which is an uncontrollable factor. In the case of horizontal marketplaces, businesses can benefit from a wider user base and assurance of trades at almost any time, but handling such a platform is generally tedious that gets tougher during peak times. Thus, the vertical model is recommended for small enterprises and the horizontal model is recommended for bigger corporations, and both need a development partner to create a quality NFT digital marketplace platform.
