Not knowing about NFT might mean you were living your life in the cave and stumbled upon this article. Omnipresent information about NFT is everywhere. In this article, we want to discuss details about the NFT ecosystem: marketplaces, sales, and more from the software provider's perspective. However, despite the amount of information circulating on the web, it’s not always clear how everything is tied together.
How can we avoid explaining NFT one more time? Let’s look from the engineer’s angle of view and re-iterate over for those readers who to fill the gaps.
So NFT is a Non-Fungible Token. It resides in the blockchain and is nothing more than just an agreement between users similar to Ethereum, Bitcoin, or even fiat U.S. Dollar; any token or currency is a sort of agreement in its functional context. In Blockchain, NFT represents the form of data described by a Smart Contract.
Since Ethereum is the most popular blockchain to date to deal with NFTs, we will use it everywhere in our examples. Like many other blockchains, any developer can create a custom Smart Contract in Ethereum, define its rules and behavior. NFT in this picture is just another custom type of contract. The technical standard is called ERC721, and it has other modifications.
What makes it special is its uniqueness hardcoded inside the rules. It’s like being an exclusive owner of Ethereum itself. Vitalik Buterin could have been such an owner. This uniqueness allows an owner to declare ownership with total transparency. This way, NFT became an excellent vehicle for many industries as it helps provide identity to the subject or asset.
All the above won’t make sense if it’s connected to something valuable. In the case of NFT, it can be pretty much anything you can tie up digitally - a digital image of a piece of art, the digitalized document, song, or movie. Thanks to the nature of blockchain - as soon as you declare your ownership rates, it becomes undisputable while you remain the owner.
In reality, it just works as an identity layer. So you can own one of the most expensive BAYC NFT. Still, someone can simply use the underlying NFT asset by copying the image and pasting it anywhere or as his avatar, and there’s no way for the internet to block such illegal usage. And when the proof claim arises from any dispute by the rightful owner - the beautiful veil of anonymity is dissolved.
One last essential component of understanding NFTs is the knowledge about how those associated assets are stored. Since the NFTs themselves are non-fungible, and the nature of blockchain is decentralized, there is a need for a mechanism that would resemble similar qualities with a context of file content. Blockchain isn’t feasible alone for this task due to high gas fees and lack of adequate solution given a born to IPFS or Interplanetary File System. However, it’s not an only efficient way of managing files but also has a bright future due to its decentralized nature.
The need in the marketplace representing the capability of NFTs for being traded is lying on the surface. Today, the pioneer and the largest and the most successful player is OpenSea. The main difference between the NFT marketplace and the regular one lies in the trade execution process and the ownership transfer. Advanced marketplaces, such as OpenSea in our example, also possess some extra tools such as auction sales.
Here are the main components of the NFT marketplace:
However, there are much more functions that breathe life into the ecosystem:
You might wonder - how much time and money would it take to build your marketplace? Well, pretty much like any other marketplace except for the components listed above. Those which touch blockchain nature and specifics of the inventory. More specifically, most entrepreneurs wouldn’t copy and paste OpenSea blindlynSea. At least they would expect such copy-paste to be successful. If we put all uniqueness aside, the bare minimum would run around $90’000 - $120’000 with a reputable agency. Flexible enough to implement any ambitious idea on top, secure and sufficient to compete with big players early on.
Another question is why anyone would build their marketplace if OpenSea already exists. The answer is simple: many other great blockchain networks don’t have their marketplace. Maybe your marketplace idea will fill that gap? We suggest consulting the StartupCraft Blockchain services.
Surprisingly, at StartupCraft, we figured out that the NFT marketplace is cheaper to develop vs. a more conventional one. Furthermore, we calculated that convention marketplace features set usually have more details due to the fiat system, which the average NFT marketplace didn’t adopt yet and which deems somewhat unimportant or redundant thanks to the decentralized nature of the infrastructure. We are about to share a few marketplaces StartupCraft is working on, so this article is supposed to be updated soon.
NFT development ecosystem doesn’t end up with the marketplace alone as to spin up the interest to your collection isn’t enough to just upload the artworks and mint NFTs. The authors have to market their collections somewhere else and raise awareness.
NFT Sale in 2022 is undoubtedly one of the most popular ways to bring attraction to your NFT collection. Either it’s a custom-built handmade set of valuable assets, physical goods brought together under the roof of a specific idea, or generative artwork. The main goal is to warm up the target audience through social media and showcase the product on a separate landing page.
Such a flexible approach allows every creator to define its own rules and present them in their way. NFT Marketplace often becomes a secondary market in this scenario. By creating a private or public sale window, the potential buyers usually deplete the stock to access rare collectibles early on and then gain some profit on the secondary market.
For those who oversee a more functional future of their NFT collection, NFT Sale can offer a transparent and efficient way of crowdfunding. The flexibility of NFT itself can be represented even as an exclusive membership card. And there’s the extra property that we didn’t mention is metadata, which allows any system in which NFT participates to provide more information on the specifics of NFT, such as textual details of the properties. For example, one can ruffle the different rarity level memberships by a completely random approach but having the exact cost of the initial NFT. The rarity can be explained in the metadata or visually (though it’s not that obvious to the underlying business logic of the main application).
The development of the NFT Sale is a very delicate process compared to the marketplace. The main culprit is a balance between flawless code execution and efficient operations. Code has to be perfect as the smart contract is immutable after being landed on the blockchain, and you are dealing with a considerable amount of money (10’000 NFTs might cost around $2’000’000). On the other hand, operations will define how much your buyers have to pay to mint and claim the long-sought NFT. It’s needless to say that if the sale creates congestion within a network such as Ethereum, the gas expenditures may result in a price higher than NFT itself.
At StartupCraft, we have experienced a monstrous demand in building NFT Sale solutions. As a result, on average, an NFT Sale project contains the subsequent deliverables:
Developing the NFT Sale solution equals more diminutive than the time required to finish the artwork creator's assets. Therefore, the sales can be started early on by deferring the revealing of the NFT artwork, giving enough time to deliver high-quality pieces with no haste.
Our customers ask us not to share the NFT sales we’ve been a part of to show the example we had to build our own. Yet the main reason wasn’t about making it for the sake of an example but a more meaningful one. As of the date of writing, the home of StartupCraft engineers became the victim of Russian aggression. And while most of the StartupCraft team is safe and sound, outside of Ukraine - we decided to create a Cossack Club NFT project which would have a meaning to help those who weren’t so lucky with humanitarian and other types of aid through the vast network of decentralized volunteering groups and organizations.
NFT Sale solution can become a gateway to your business idea or a solid booster to the existing product. While the selling of the artworks today became sort of mainstream, it actually can bring enough attention to the blockchain and quicken its adaption.
NFT Development encompasses the blockchain solutions connected to the utility of NFT. It’s not limited to NFT Marketplaces or NFT Sales though these tools became the essential foundation for bringing attention and funds into the ecosystem. One of the most ambitious future ideas is the Metaverse as a new version of the internet. Having NFT, which represents an eternal piece of digital information living on the Blockchain, may unfold an unknown potential or play a crucial role in many businesses. It’s all starts here and now.
Since 2022, StartupCraft dedicated its resources to stay in the blockchain mainstream, and we proudly declare our expertise in working through more than 30 NFT related projects over the past year. While the developer's community is constantly enhancing the environment with new developments such as ERC721a, ERC721Enumerable, ERC1155, and other ERC721 classic NFT, there’s still a lot of room for improvement. So we also contribute with some ambitious ideas and projects we're yet to share in future blog posts.
If you are curious about what else you can do with blockchain, we recommend looking at our Blockchain Services page, which uncovers other ways of utilizing this beautiful technology.
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