NFTs or Non-Fungible Tokens have been in the news for quite some time now. At the time of writing this article, the NFT market cap was around $6,677,232, which is susceptible to change with fluctuations in the market. This extraordinary growth has not only resulted in benefiting the owners and creators of NFTs but also the marketplaces where they are being hosted.
NFT marketplaces like OpenSea, Rarible, and Superfarm have become the epicenter of funding and high revenue – a sign that every business model that NFT is touching is turning into gold. But what makes the NFT marketplace the epicenter is the fact that it hosts multiple NFTs – meaning the source of revenue that it opens is much greater than direct NFT creation and selling.
While the pieces around NFT development and the cost it incurs are weeding across the internet, we will dive a bit deeper. In this article, we will look into the cost of NFT marketplace development and what blockchain enthusiast entrepreneurs need to know when they enter the space and develop the NFT platform.
What is an NFT Marketplace?
The important element of knowing how to create an NFT marketplace is to understand what it is. An NFT marketplace is an online marketplace where creators sell their non-fungible virtual products, and the buyers procure them using cryptocurrencies like Bitcoin or Ether. The marketplace charges a transaction amount every time an NFT is purchased off their platform.
After the NFT is purchased, the buyer gets a token, which is a unique identifier that contains proof of ownership and information about provenance, author, and authenticity.
Now that we have established how expansive the NFT marketplace is becoming and where to buy NFT, there are some things that every custom NFT marketplace development company wants you to know before you get on the track of development.
How much it costs to build an NFT marketplace, the next step is to connect with a blockchain development companies in the US that can help you convert your idea into a highly profitable marketplace with their custom NFT marketplace development specialization.
What to Know Before you Set Off Your Plans to Build an NFT Marketplace?
With so much hype around the NFT, many blockchain enthusiast entrepreneurs are showing interest in building an NFT marketplace to connect buyers and sellers. Below are a few essential things you must know before you step into the world of NFTs.
Non-fungible token standards
Standards are the driving force of an NFT. They guarantee that the asset will act in a specific way and showcase how to interact with the asset’s basic functionalities.
At present, there are two standards that are commonly used for creating an NFT:
ERC721: The standard uses mapping of unique identifiers to the addresses that represent the owner of the identifier. It offers a permissioned way of transferring the assets using the ‘TransferFrom’ method.
ERC1155: Under this standard, the IDs used do not just represent one asset but a class of assets. Compared to the ERC721 standard, this is a lot more efficient. For instance, if you are a game developer and your goal is to sell 100 armor sets, you will need to write 100 smart contracts for ERC721, but for ERC1155 you will need to write one contract and state the quantity.
Non-fungible token metadata
In the NFT space, there is a concept called ownerOf. It offers a way to look up the owner of an NFT. For example, when you search for ownerOf(290491) on ABC NFT’s smart contract, you can see the owner of the token 290491 is XYZ – this information can then be verified on marketplaces like OpenSea.
But how do OpenSea-like platforms understand what item 290491 is and what are its unique attributes? This is where the metadata comes into play. Metadata offers descriptive information for specific token IDs such as pictures, descriptions, or any additional traits.
Besides the nomenclatures, there is one thing that every first-time entrepreneur struggles with – knowing the legal documentations for building the best NFT crypto platform.
Legal documentation for building the best NFT marketplace mainly includes:
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Company formation
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Terms of service
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Community standards
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Privacy policy
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IP consideration details
How Does an NFT Marketplace Work?
NFTs, as you must know from our NFT guide article, run on smart contracts. Every token has a set of unique information recorded in a smart contract and a blockchain to provide security and immutability.
Step 1:
Usually, all the NFT marketplaces work on a common flow. The user signs up on the platform and installs a digital wallet where they store cryptocurrencies and NFTs. They then create their collection by displaying the work and choose choosing the payment token they’d like to accept for their digital item.
Step 2:
The next step is either selecting a bid for the auction or keeping a fixed price. When an item is listed, a transaction is created, which launches a smart contract for the user’s wallet.
Step 3:
Once you approve the platform’s collection moderation request, the NFTs appear on the list of sales where you can then accept bids.
In return for the work that the platform does for transferring funds and NFTs, the marketplace charges some fees on the selling amount.
Now that you have the prerequisite knowledge of the NFT marketplace space and its working, let us answer one of the most asked questions, ‘How much it costs to develop an NFT marketplace?’ The entire cost of it is dependent on the NFT marketplace features set it contains – the information that we will be looking into in the next section.
How Much Does it Cost to Create an NFT Marketplace?
We’ve arrived at an intriguing question that everyone wants to know the solution to: How much does it cost to create an NFT marketplace? Or what is the cost of NFT development?
Well, everything is dependent on the amount of work required. For example, the cost will be reduced if you choose to use a ready-made solution.
Starting an NFT marketplace with a popular clone script will save money and make it more accessible to startups and entrepreneurs. An exact price can’t be told without knowing the requirements and specifications, however, the fundamental elements of the NFT marketplace clone script usually cost around $100K -500K. Again, this is not a fixed amount, but just an estimation.
The NFT cost may increase depending on the customizations you need to meet your business needs. If you want to build your own NFT marketplace from the ground up, then the NFT cost for that will be higher than the ready-made solution.
The platform functionality follows the same pattern. You’ll have to spend more money on marketplace development if your requirements lead to a complicated platform (one with dynamic features that haven’t been done previously). Not only the platform but the tools and technologies used also determine the NFT cost. As it is said, the more the merrier. But everything comes with a price, and the price with extra additions will surely be more.
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