What Not to Do When Building NFT Marketplaces?
If you’ve been in the crypto space before, you probably already know what NFTs are. They have been famous for a long time, but the release of CryptoPunks in 2017 gave them a big boost. Even though NFTs are unstable and the market for them goes up and down a lot, they have become one of the best innovations of our time and can be used in many ways. This instability is interesting because it shows how many people are getting into the NFT world.
Even though NFTs are part of the crypto space. You can’t buy them on centralized crypto platforms like Coinbase or Kraken. They are, however, easy to find in NFT markets that are made just for them. NFT marketplaces are places where NFTs can be issued and sold. They also give artists and makers a place to show off their work and sell it safely.
Since more NFTs are being made every day, there are also more NFT markets. NonFungible.com says that the average sales of NFT are between $10 million and $20 million per week. In the same way, the NFT trading volume rose by 704% between the second and third quarters of 2021. This means that the NFT industry’s quarterly trading volumes went up by eight times.
People are interested in this profitable business, and they have started building NFT marketplaces to make it easier to trade non-fungible tokens. But because the web3 environment is always changing, it is getting harder to figure out how to build an NFT marketplace development in an industry that is always changing. We made this guide on what to do and what not to do when building NFT marketplaces, with a focus on what not to do, to clear up any misunderstanding and give good advice.
How Do Markets for NFTs Work?
Most of what goes on in an NFT marketplace can be broken down into two parts: minting and trade. In minting, you can turn any digital file (like a JPEG, MP3, or MP4) into an NFT, which you can then store safely on the host blockchain of the marketplace. Then, these NFTs can be sold to make money.
The process of making NFTs is simple. First, you need to add a wallet browser extension, like Metamask, that works with the platform you want to use, like OpenSea. Metamask is an Ethereum wallet that lets you sign up for an account on any Ethereum-based website.
After making an account, you have to send or share the file or piece of art to the marketplace so that it can be turned into an NFT. It’s a lot like uploading a picture or video to Instagram: you need to give it a name, give it a description, and set up royalties. Some markets, like OpenSea, let you change your NFTs even more by letting you add them to a collection you already have or give them new stats, properties, or levels. After you do these things, you’re ready to sell it.
When an NFT minting website development is created on a market, anyone with the right amount of cryptocurrencies can buy it. To buy an NFT, you need a cryptocurrency wallet that works with the marketplace. For example, if you want to use Ethereum-based markets, you need a Metamask wallet. The next step is to buy the coins you need and link your wallet to the marketplace.
You can buy an NFT at a set price or through an auction. If you want to buy an NFT through a sale, all you have to do is place a bid and wait for the result. If your bid looks like it will be accepted, the amount will be taken out of your wallet, and your NFT wallet will be rewarded with the NFT you just bought. Buying an NFT through a fixed-price ad is like buying groceries and paying for them with Google Pay. The price for the NFT in question has already been set, and the buyer can pay for it right away.
What Not to Do When Building an NFT marketplace?
Not Following the Right NFT Rules
So far, ERC-721 is the most well-known and widely used NFT standard. So, if you’re making a market, make sure it meets ERC-721 guidelines. OpenSea, for example, is built on Ethereum and uses the Ethereum NFT standard, ERC-721, which is also the most widely used standard to date.
The ERC-721 standard says that the structure of NFT data or metadata should also follow the correct standard and naming practice. This makes sure that NFTs made on your marketplace can be viewed by marketplaces outside of yours. Users can access and sell NFTs between marketplaces that use the same standard as long as they follow the right standards. In the same way, your NFT market should be able to list and sell NFTs that were made on other markets.
It’s important to note that ERC-721 is not the only standard that can be used to make an NFT marketplace. Other blockchain systems, like Solana, also have standards that can be used. Basically, when you build NFT markets, the rules you use depend on what you want. But it’s best to think about what the end users need when making a decision.
Getting Information From the Database
One of the main reasons blockchain was created was to encourage decentralization. So that no central organization could create a monopoly and take control of users’ personal data. So, any information about an NFT, like its name, the name of the collection, the price, etc.. Should be available straight from its host blockchain, not from the database of the marketplace.
The data in a marketplace’s database can be changed. So anyone who works in the core of the system can change the data to their own advantage. The information on a digital record (blockchain), on the other hand, cannot be changed. This means that it can’t be changed or taken away, so it is completely clear. So, no one can change the information about the NFTs on your marketplace or their deals.
In the same way, you should record information on the blockchain, not in a database. Users could get in trouble if they store information anywhere but on the master blockchain of the market. Even though keeping data off-chain saves money, it can be misused and is a security risk. If the system is broken, the data could be lost and people might not be able to get it back.