What is NFT Marketplace?
Do you keep hearing about people buying digital cats, NBA moments, and virtual artwork of Donald Trump, but not sure where they got those NFTs from? Don’t worry, we’ve got you covered.
Non-fungible tokens (NFTs) have quickly become one of the most explosive crypto trends since the “DeFi summer” of 2020, with a growing number of cryptocurrency holders and traditional investors seeking to own and speculate in these unique Blockchain-based assets.
NFTs are virtual tokens that represent ownership of something that is inherently unique and scarce, whether physical or digital, such as artwork, soundtracks, collectibles, in-game items, or real estate. Unlike regular cryptocurrencies like Bitcoin (BTC, +2.32%) or fiat currencies like the U.S. dollar, these special types of digital assets cannot be exchanged for each other because each token has a specific value based on its unique characteristics and attributes.
NFTs cannot be purchased on controlled or decentralised cryptocurrency exchanges, just like ordinary cryptocurrencies cannot.
Instead, they are listed and traded on an online marketplace purpose-built for NFTs.
What is the NFT marketplace?
NFT marketplace are platforms where NFTs can be stored, displayed, traded, and in some cases minted (created). These marketplaces are to NFTs what Amazon or eBay are to commodities.
In order to access and use these types of marketplaces, you need the following:
Crypto Wallet: You will need to choose a wallet (below) that is compatible with the blockchain network that supports the NFT you wish to purchase.For instance, you will need to utilise a suitable Ethereum wallet, such as MetaMask, if you intend to buy or trade NFTs based on the Ethereum blockchain platform.For NFTs sold on the Solana platform, you will need to use a wallet service such as Sollet.
Amount of coins in wallet: Before buying, listing or minting NFTs, you will need to pre-fund your wallet. Likewise, you need to find out which cryptocurrencies are supported by the market you intend to use.
User Account: You will need to set up an account on the specific marketplace you want to buy NFTs from.
It’s worth noting that listing and creating NFTs on marketplace platforms in most cases incurs blockchain network fees. Fees depend on which blockchain-based system you decide to use. For example, Ethereum has the largest ecosystem of NFT dapps (decentralized applications). But it’s the most expensive.
NFT Blockchain Options
Ethereum is by far the most popular system for buying, selling and creating unique digital items. However, a growing number of competitors have also entered the market, including:
*Binance Smart Chain
*Flow (by Dapper Labs)
*Tron
*EOS (+2.36%)
*Solana
*Polkadot
*Tezos
*Algorand
*Cosmos
*WAX
*Hedera Hashgraph
Some of these blockchain systems are interoperable. For example, you can use Ethereum-based tokens (called ERC-20 tokens, including USDT (-0.05%), USDC (-0.05%), BNB, DAI (-0.03%), etc.). Others, such as Flow, are closed systems. For example, you cannot buy NBA Topshot NFTs (based on Flow) with Ether or BNB.
How do these markets work?
register
Signing up for an NFT marketplace can vary from site to site, but the main steps to follow include creating an account or connecting a supported digital wallet, or both. This button is usually located in the upper right corner of the homepage of the NFT marketplace. When connecting your wallet, you will be asked to enter your wallet password to complete the process.
Buy NFTs
NFTs are often purchased directly at a fixed price or through auctions. In some cases, potential buyers can submit an offer to the property owner and try to negotiate a better price.
Sell NFTs
Selling unique digital assets can be technically more complicated than buying them, especially if users are trying to sell something they’ve created themselves (artwork, soundtrack, tweets, etc.).
You need to upload the selected digital assets to the market and enter a fixed price or choose to sell the NFT through an auction.
Next, the platform will verify the asset. If approved, it will be put up for sale.
The market undergoes a transfer from buyers to sellers when a seller accepts a bid.
Minting NFTs
If you want to create an NFT, you might consider starting with Ethereum as it is the largest system for these types of assets. You need to have an Ethereum wallet that supports ERC-721 (Ethereum’s standard for NFT tokens), such as MetaMask, Trust Wallet, or Coinbase Wallet. Additionally, you have to fund your wallet with about $50-$100 worth of ether (ETH, +3.09%) to cover transaction fees (depending on how congested the network is).
After completing these steps, you will be able to access and use platforms such as OpenSea, Rarible or Mintable. Most platforms have a “Create” button in the upper right corner that will take you to a page where you can start creating your NFT.
Types of NFT marketplaces
While there are many types of marketplaces, general-purpose and art-oriented platforms are the most popular. There are also niche NFT marketplace that list specific types of non-fungible assets, such as in-game items, digital collectible cards, and virtual real estate.
Here are five of the most popular general and digital art-oriented NFT marketplaces currently available:
OpenSea: This is one of the most mature general-purpose NFT marketplaces. You can find non-fungible tokens that represent ownership of all kinds of things, including artwork, sports collectibles, virtual worlds, trading cards, and domain names.
Rarible: This is an NFT marketplace owned by community members holding RARI tokens. It emphasizes art, but you can also find various other NFT items here.
Nifty Gateway — Nifty is one of the largest NFT marketplaces. Here you can buy works by well-known artists including Beeple (which holds the record for most expensive NFT sale at $69 million), Steve Aoki, and deadmau5.
Foundation: Founded in February, Foundation has quickly become one of the most popular NFT marketplaces for creators, with a historical transaction volume approaching $48 million.
For niche digital items like virtual world avatars or digital fantasy football cards, while more and more platforms are popping up in this corner of the market, there are five main platforms that are the primary source of NFT sales:
NBA Top Shot: An NFT marketplace Development built on Flow where people can buy and sell digital collectible cards featuring videos of memorable NBA “moments.”
Axie Infinity: The platform provides cartoon characters for the Axie Infinity game, where players breed, fight and trade digital pets called Axies. Some even make a living playing professionally.
Sorare: Here you can buy virtual cards representing football players and use them in Sorare, a global fantasy football game.
Decentraland: This platform has its own internal marketplace where users can buy and sell virtual land or in-game items like wearables.
Valuables: This is a site where users can tag tweets and sell them as NFTs. Twitter CEO Jack Dorsey himself sold his first tweet for $2.9 million.
