Do you want to get involved in the NFT marketplace industry or the web 3.0 marketplace? Find out more about these new types of marketplaces and how you can create the next big marketplace for digital art. We've talked about marketplaces a lot on You are launched – everything from Uber to Etsy. However, the next big thing when it comes to startups and marketplaces is NFTs.
Whether you're new to the world of NFTs and web 3.0 marketplaces or plan to create the next big digital art marketplace startup, this guide will explain everything you need to know.
What is the NFT marketplace?
An NFT marketplace is a website or virtual space where people can sell or buy NFTs.
An NFT, or non-fungible token, is a piece of digital content, paid for with cryptocurrencies like Bitcoin or Ethereum. When you buy an NFT, you own the content, just like you would a physical piece of art.
(Bear in mind that the author or artist of the NFT still owns the copyright.)
Most marketplaces work on an auction basis where buyers bid for an NFT, and the highest bid wins. Think of these marketplaces like eBay but for digital art, sounds, videos, and social media messages!
We won’t go into too much detail about what an NFT is or how it works here, but The Verge has a great primer if you want to know more.
Some of the top marketplaces around at the moment include OpenSea, Rarible, Mintable, and Zora. The biggest NFT platform is currently OpenSea, accounting for 97% of the market share.
However, as the number of NFT marketplaces grows over time, the share will become a lot more evenly distributed. As well as a variety of goods you can purchase with NFT.
Possibly, you might face an issue with your audience. For this purpose, we’ve prepared a list of tactics to solve the chicken and egg problem.
What is a web 3.0 marketplace?
Let's start by looking at what web 3.0 is. Web 3.0, or internet 3.0, is the next evolution of the world wide web.
Web 1.0 was the first iteration of the internet, which was all about providing people with content but didn't allow them to share their own. In the mid-2000s, web 2.0 came to dominant. With web 2.0, social media platforms allowed users to create their own content and share it with others.
While web 2.0 gave us the ability to communicate with each other and create user-generated content, it was not without its drawbacks. A small group of companies like Apple, Google, and Amazon started to hold a lot of people's sensitive data, leading to security concerns and privacy issues.
One of the most significant examples was Facebook (now Meta) allowing Cambridge Analytica to harvest personal data belonging to millions of people without their consent. This data was then used by campaigners in advertising for politicians such as Ted Cruz and Donald Trump.
Web 3.0 will give people the ability to continue creating content while having more control over their data. It's all about providing a personalized experience that helps people in their daily lives, but without a loss of privacy or security. Technologies like artificial intelligence (AI), the Internet of Things (IoT), and cloud and edge computing all play a large part in the future of web 3.0
So, what is a web 3.0 marketplace? It's a marketplace startup that uses the principles of web 3.0, ensuring that people can trade data and information fairly and safely.
An NFT marketplace could be seen as an excellent example of web 3.0 in practice.
How do NFT marketplace and web 3.0 marketplace come together?
NFT marketplaces use blockchain, which is a founding principle of web 3.0.
Blockchain technology is a way of recording information that is impossible to change or hack into. This means it is a dependable and reliable way of proving who has purchased a specific NFT.
With digital art, it's easy to download the artwork and claim it as your own. However, blockchain records show which person exchanged cryptocurrency (such as bitcoin) in return for ownership of the NFT.
Blockchain isn't just restricted to NFT marketplaces – it can be used anywhere where the integrity of data is critical. For example, it could be used in logistics and supply chains to ensure businesses know where their items are at any given time.
Find out more about blockchain and how it works.
How to create an NFT or web 3.0 marketplace
Now that you know all about NFTs, web 3.0, and blockchain, you may be wondering how to create the top NFT marketplace of all time.
Here are our tips for creating such a marketplace that everyone (both buyers and sellers) will want to be a part of.
1. Do your research
This is something that we say in pretty much every article we write, but before you start working on your startup idea, do your market research first.
Consider whom you want to target, what type of NFTs you want to sell, and what your ultimate goal is. A proof of concept can help you identify potential risks and see if your NFT marketplace idea is a viable one.
You will also need to decide if you will use an off-the-shelf package to create your marketplace or create one from scratch.
2. Consider your niche
In previous articles, we've talked about the different types of marketplaces you can get. As well as your more generalist horizontal marketplaces like Amazon and Taobao, there are also more specialist vertical marketplaces like Etsy and Paintzen.
The logic of horizontal and vertical marketplaces applies to NFT marketplaces too. Many current NFT marketplaces try to appeal to everyone, so you may find success in focusing on a particular target audience or type of NFT.
For example, you may choose to specialize in sports-based NFTs or NFTs for gamers.
Review the market, look at potential competitors and see where there are any gaps in the industry.
3. Invest in a specialist
NFTs, blockchain, and cryptocurrency can be confusing if you're not sure what you're doing. If you're not an expert, it is worth hiring a specialist who understands the technology and can help ensure your new marketplace idea is a success. This is especially important if you are creating your marketplace from the ground up.
You can either hire a specialist full-time to join your new startup or call on a consultant or freelancer to support you on a pro-rata basis. Look at which option is best for your business needs and budget.
You could even consider offering equity as a way of hiring the best of the best.
Alternatively, if you are looking for funding, do your research and find an angel investor or venture capitalist that specializes in NFTs and blockchain technology. They will be able to use their skills and knowledge to help grow your marketplace venture.
Find out more about finding investors for your NFT marketplace or web 3.0 marketplace.
4. Pick the blockchain you want to use
When you create a marketplace, you will need to decide which blockchain technology you want to use to log transactions. There is a wide range of blockchains available, each with its advantages and disadvantages.
Some of the blockchain platforms you can use include Ethereum, EOS, Ripple, and Hyperledger.
Find out more about which blockchain technology is the right choice for your NFT marketplace.
5. Make your marketplace as user-friendly as possible
The marketplaces can be confusing if you're new to the world of web 3.0 marketplaces. This means it's essential to ensure your marketplace is easy to use.
A slow website that looks ugly and is hard to navigate can not only cost you sales but could have an effect on your search engine visibility too.
Nearly nine out of ten website users say they are less likely to return to a website after a bad experience.
Take the following into consideration when designing and building your NFT marketplace:
Make it as easy and intuitive as possible for sellers to upload their listings;
Consider how your marketplace will look on mobile;
Create filters so sellers can find the NFTs they want faster and more efficiently;
Review which cryptocurrencies customers can use to buy;
Utilize ratings and reviews, so buyers will know which sellers are the best.
6. Learn how to manage your sellers
Your sellers will be the backbone of your marketplace. After all, if there are no NFTs to sell, you won't be able to make a profit!
You will want to encourage the best and most reliable sellers to choose your platform. As well as this you will want to ensure that all the NFTs you sell are genuine.
Here are some of the things you will need to consider:
How regulated will your marketplace be? You may choose to have tight control of who registers and what is uploaded, alternatively you may prefer to take more of a step back;
How will you verify sellers? For example, some marketplaces add the seller's wallet address and social media information to prove they are genuine. Some marketplaces have Twitter-Esque blue ticks in place to confirm users are who they say they are;
What commission will you take? With NFT marketplaces, you will have the option of charging for listings, charging for sales, or a combination of the two. For example, OpenSea doesn't charge for listings but takes a commission of 2.5% from all sales made. Rarible takes a commission of 2.5% from both buyers and sellers.
7. Choose your wallet carefully
In NFT terms, a wallet is a place where users can store not only their cryptocurrency but any NFTs they purchase.
While you can create your own bespoke wallet technology for your marketplace, it's more sensible to integrate one of the existing ones into your platform.
It's important that the wallet you choose to associate with your marketplace is user-friendly, secure, and can be used across multiple devices. It's also a good option to let users integrate their own wallet of choice with your NFT marketplace. This means they don't have to sign up for several different wallets across various marketplaces.
Some of the most popular wallets include Coinbase, Metamask, and Trust Wallet. Do your research and see which one works best for your business requirements.
In summary: Creating the web 3.0 marketplace doesn't have to be a challenge
We hope this article has given you some valuable insight into creating an NFT or web 3.0 marketplace.
Carry out customer and market research before you start;
Decide whether you will operate a horizontal or vertical marketplace;
Consider specialist help;
Determine which blockchain platform you will use to log sales;
Make sure your marketplace is easy to use;
Review how you will verify and manage your sellers;
Pick which wallet (or wallets) you will use in your marketplace.
While the growth of NFT assets has skyrocketed over the last few years, ownership is still low, with only 2% of people have ever bought or sold one.
This makes it an ideal time to think about potential startup ideas and make your mark on the world of internet 3.0.
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