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NFT Marketplace Development: From Smart Contracts and Blockchain to UX Design and Legal Compliance

Boopathi Krishnan
NFT Marketplace Development: From Smart Contracts and Blockchain to UX Design and Legal Compliance

According to NonFungible.com , in the first quarter of 2021 the aggregate market capitalization of large NFT projects increased by 2,100% (the market grew by 300% in all of last year). Most NFTs sell instantly, and the most well-known ones have sold for almost $70 million. Additionally, celebrities are supporting the hype around NFT by tokenizing their music, paintings, memes, short videos, logos, computer codes, and the like.

That said, the main beneficiaries of the NFT market have been websites that offer the opportunity to buy and sell NFTs as easily as possible. In this article, we will briefly explain what NFTs are and where they can be used, as well as how to develop your own NFT marketplace and what they cost.

What is NFT?

A non-fungible token, or NFT, is a digital token that acts as an electronic certificate of ownership of physical or virtual assets such as photos, videos, tweets, computer codes, etc. Each NFT is a unique, non-exchangeable and indivisible digital asset. This means that, unlike bitcoin or ether, NFTs are not identical to each other, so they cannot be traded or exchanged in an equivalent manner and cannot be used for payment  transactions.

NFTs can bring in crazy amounts of money. Some NFTs are, of course, more attractive and therefore people are willing to pay considerable sums for them, while other NFTs are sold for pennies. The principle of value creation in this market is simple: the more known (sought after) a lot is, the more expensive it is.

famous NFT :

  • Artist Beeple's digital collage “Every Day: The First 5,000 Days” sold at Christie's auction for an impressive $69 million.
  • The Twitter CEO's first tweet sold for $2.9 million.
  • The animated film Nyan Cat sold for $590,000 .
  • The CryptoKitties kitten sold for $172,000 .

How does the NFT Marketplace work?

Unlike bitcoin or ether, non-fungible tokens cannot be traded directly on conventional cryptocurrency exchanges. To buy and sell NFTs, special trading platforms are needed that allow non-tradable tokens to be issued, stored and traded. Currently, this industry is dominated by the sizable marketplaces OpenSea, Rarible, Superfarm, and Mintable.They create NFTs using specialised smart contracts that specify the fundamental properties of each token (name, immutability, indivisibility, address/number, etc.) and add a set of unique information (metadata) to each of these tokens. On the platform, non-fungible tokens can be purchased and sold at a set price or through auctions.

How do NFT market smart contracts work?

On the client side, NFT marketplaces Development work like normal online stores .The user can then use the listing to purchase NFTs or create their own token. Running an NFT is usually simple and similar to creating an eBay listing . You have to provide a name, a price, give a description and an image, photo, video, gif and the like.

Niches and applications of NFTs

Most NFTs are used to market all types of digital artwork, from digital copies of real paintings to memes. For example, on the OpenSea trading platform, you can buy, sell and transfer images, videos, gifs and music.

But fine arts are not the only area of ​​application of non-tradable tokens.They can also be used to exchange investment proposals (Spencer DINWIDDIE contract), trading cards (NBA Top Shot), game characters (CryptoKitties), real estate (Mintable), virtual worlds (Metaverses), and any other area where tokenization is possible. possession of something. The secret is to develop a market that can support the desired property.

For example, if you want to develop an NFT marketplace for trading artworks, you essentially have to create a normal online store , the server side of which must be able to release, store, sell and exchange NFTs. This is relatively simple. These platforms must be able to work with MLS and state registry databases, identify the user's location, etc.

And so with each sphere. Here are some more examples:

Online learning : These marketplaces must offer a full range of services for online learning : from selling a training course to tracking the buyer's learning progress and communicating with instructors.

Investment projects: These types of NFT markets should function like a stock market for trading securities. That is, they must offer the possibility of issuing legally legal securities with the right to ownership, dividends or participation in profits.

Safety: Non-fungible tokens can function as access keys to content, software, a database, an operating system , or an event. To sell this type of NFT, the marketplace must be as secure and trustworthy as possible and support the most popular security features on the buyer's side (Touch ID, Face ID, Eye ID, etc.).

The video games:  The sale and purchase of NFTs, which represent unique in-game assets or characters, typically take place within the game (in exchange for in-game currency) or at external online locations that ensure the secure exchange of real money for the in-game asset ( like on Steam). This implies a very close integration with the video game.

Main characteristics of the market

For the issuance of non-tradable tokens, the NFT trading platform combines the features of an online store, an auction, and a blockchain platform. Users ought to be able to produce and market their own NFT goods. Additionally, these markets typically include various features to draw in clients, keep them, and enhance their overall experience. The greatest place to start when creating your own nft marketplace with  NFT marketplace development solution  is by putting the following concepts into practice.

Showcase:This feature provides marketplace visitors with all the information they need about the item: title, price, description, preview, owner, purchase method, rating, etc. Some NFT marketplaces also provide information about the blockchain and token protocol so that users can verify the authenticity of the purchased NFT.

Search system :Make sure your users can easily find the item they are interested in. It would be a good idea to divide all assets into several categories, such as art, photography, video, domains, memes, and music, to make it easier for users to navigate the store listing. Filters also make navigation easier, especially if there are many similar articles on the platform.

Registration, login : In order to buy or sell NFTs on the platform, the user must create an account. Typically, the registration process is done through email, phone number, or social media accounts . Additionally, the user is also usually asked to provide their cryptocurrency address. If not available, the option to register is offered with links to cryptocurrency wallets such as Coinbase Wallet , Metamask, MyEtherWallet.

Create an ad: This process should be simple and not take much time. Ideally, it should be the same as on Ebay. To achieve this, you have to think about the optimal user path and implement something like the OpenSea collection manager. It helps you quickly upload an item to the site and specify token properties such as name, price, description, tags, external link, etc.

Wallet for NFTs:  Users need a wallet to send, receive and store tokens and non-exchangeable cryptocurrencies. The easiest way to do this is to provide integration with the most popular cryptocurrency wallets. The main thing is that these wallets support the NFT protocol that you need. Typically, these are wallets like Metamask, MyEtherWallet, Coinbase Wallet, and WalletConnect.

Operation history : Typically, an NFT marketplace should have a section where the user can view their trading history. This way you can see the popularity of the market, what is sold there and at what price. For example, in OpenSea the bid history includes the following data: event, item name, price, buyer, seller, date.

Reviews and ratings :It shows the visitors' liking for the lot or the seller/buyer. This information helps users rate specific counterparties and lots. An article's rating is typically expressed as a numerical score or as "likes." All logged-in users have the ability to write comments, and feedback can also be provided by counterparties on one another after a transaction has been completed.

Notifications : You can implement a push notification system to inform users about new offers in the selected category or from the selected merchant, changes in the status of a selected item, a new message, the sale of your own lot or an update to the platform. NFT trading.

Support : An important element of any market. Users can solve issues and conflicts and get answers to their queries with the assistance of the support service.The help desk can be implemented as a call center, email support, a standalone information portal, or with the help of a help bot.

Rules for non-tradable tokens

To run the blockchain-based NFT, it is necessary to use certain token standards that guarantee that the asset will act in a certain way and demonstrate how to interact with the basic functions of the asset. Currently, the most popular standards for NFT release are:

ERC721 :It is used to uniquely identify something or someone from the Ether. It supports smart contracts and offers a permitted method of transferring assets using the transferFrom method.

ERC1155  :According to the standard, identifiers represent not only a unique asset, but a class of assets. Compared with the ERC721 standard, it is much more efficient. So, if you are a game developer and you want to sell 100 sets of armor, with ERC721 you would have to specify 100 smart pins, while with ERC1155 you would only have to specify one and the number of smart pins.

BEP : The largest cryptocurrency exchange , Binance , launched a new BSC blockchain with smart contact support and compatibility with the Ethereum virtual machine (EVM) at the end of the year. And it has ERC721 and ERC1155 counterparts for NFTs – BEP-721 and BEP-1155 respectively.

Stages of developing your NFT marketplace

An NFT trading platform for buying and selling is complex software whose development is best left to a development company with relevant experience, such as Merehead.Since 2015, we have assisted businesses and individuals with fintech and blockchain projects, ranging from wallets to cryptocurrency exchanges. To do this, our company can help you create a marketplace from scratch or clone an existing platform.

Step 1: Open the project

The first step in creating an NFT marketplace is for you and the development team to examine the details of your project to evaluate its technical feasibility.

 Here you must answer the questions:

  1. What niche will you operate in?
  2. How exactly are you going to market the NFT?
  3. Who is your main target audience?
  4. What token protocol are you going to use?
  5. What technology stack are you going to use?
  6. What monetization model will you use?
  7. What features do you intend to implement?

Step 2: Design and development

When all the technical requirements and development plan have been agreed upon, the development team can get to work. First, you, the business analyst and/or designers design the marketplace user interface (framework, mockups and prototypes) with a description of the user flows and platform functions. An effective architecture for the trading platform is also created.

UX/UI Design  Navigation and the appearance of the user interface are very important when developing an NFT marketplace, as the first impression, usability, and overall user experience depend on it. Therefore, make sure your site design is attractive to your audience and simple enough to be understood by anyone even remotely familiar with Amazon and Ebay.

How Do You Create Your Own NFT Market?

Smart contracts and the back end Your trading platform's whole back end runs at this level. When building it, you must also include blockchain, smart contracts, wallets, and an auction mechanism (most NFTs sell through it), in addition to the standard business logic and marketplace functions. 

NFT marketplace's backend technology stack:

Ethereum blockchain; Binance Smart Chain.

Token standards include BEP-721, BEP-1155, ERC721, and ERC1155.

Ethereum frameworks: Spring, Symfony, and Flask Smart contracts.

Java, PHP, and Python are programming languages.

MySQL, PostgreSQL, MariaDB, MS SQL, and Oracle are all SQL databases.

MongoDB, Cassandra, and DynamoDB are NoSQL databases.

Elasticsearch and Apache Solr are two search engines.

DevOps Cache: Memcached and Redis.

The entrance : This is the entirety of the trading platform's external component, which manages communication with end users. The fundamental goal of front-end development is to guarantee dependability, performance, and ease of management. Here is an illustration of a tech stack for an NFT marketplace's front end:

Web programming languages: Backbone, Ember, Angular.JS, and React.JS.

Step 3: Put your creation to the test

To make sure the platform operates properly, numerous cycles of code testing are run throughout this phase. The QA team runs a number of tests to guarantee that the project code is free of serious flaws and defects. In addition, all conceivable use scenarios of the platform are subjected to content, usability, security, reliability, and performance evaluations.

Deployment and support in Step 4

It's time to install your NFT trading platform on a server (the cloud) when the platform has been tested. Please be aware that organising your support team will come after you complete this stage. The platform's future development must also be planned to reflect consumer preferences and industry developments.

The price

The amount of features and degree of management and navigation complexity determine the cost of building an NFT marketplace. would the user be able to mint their own NFTs or would they have to purchase them all at once? On the board, will it be possible to build your own NFTs, or is it just a market for users? What remedies will be implemented during the development?  The NFT market's entry-level prices typically range from $20,000 to $80,000. The cost could exceed $300,000 if you choose to build a sizable platform that competes with OpenSea.

Boopathi Krishnan
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