Participating in the online NFT movement is both a way of expressing yourself through digital art and a forward-looking financial tool. NFT artists around the globe make unbelievable amounts of money while buyers get unique items to resell or collect. NFT markets act as intermediaries to allow this.
The hype the industry gets today allows creators to enjoy the freedom to make whatever they want and then sell it. This is a trend we have seen for the last couple of years, with OpenSea being the largest player. In this article, the Grapherex team will explain what an NFT marketplace is and how it works.
What Is an NFT Marketplace and How Does It Work?
NFTs – non-fungible tokens – are unique tokens stored in a blockchain. They represent ownership of a digital or physical asset and cannot be replaced by another similar token. They can take different forms – pictures, documents, GIFs, videos, and audio files.
An NFT marketplace is a platform that sells non-fungible tokens of different owners and creators. It also allows users to store and resell NFTs and create their own collections. NFT marketplaces have search functions, filters, and categories, which makes them easy to use. They also support certain collections, make products trending, and encourage popular artists.
Let’s have a look at what features the marketplace has to offer.
- Creating NFTs. Artists create NFTs to represent their unique items. They mint an NFT by uploading information about this asset and its metadata into the blockchain. This establishes undeniable ownership.
- Listing for sale. The NFT creator places the asset on a trading platform. He or she sets the price, chooses the method of sale (auction or direct sale) and adds extra information about the NFT if required.
- Buy and sell functions. Buyers browse the marketplace to find the NFTs they want to purchase. Then they bid on auctions or buy the NFTs directly. After the sale, ownership of the NFT is transferred to the buyer.
- Royalties. Many platforms allow creators to receive royalties on subsequent sales. When the NFT is resold on the market, the original creator receives a pre-determined percentage of the selling price.
- Crypto and NFT Wallets. NFT markets incorporate digital wallets that store cryptocurrencies and NFTs. This helps to ensure secure transactions and fast ownership transfers.
Additionally, trading platforms encourage the creation of communities and increase engagement. Users have an opportunity to follow their favourite artists, participate in discussions, and share news. If you are new to this sphere, you’ll also find a lot of guides on how to buy NFT assets or sell them.
As a modern Web 3.0 ecosystem, we are planning a great update. You’ll find all the best NFT and Gamedev collections from leading creators and brands on Grapherex NFT soon.
Types of NFT Marketplaces
There are three main classifications of marketplaces – by type of governance, by market coverage, and by niche. Below, we’ll look at the first two. What is more, all marketplaces differ in features and fees, so make sure you read them before using the platform.
Non-Curated NFT Marketplaces
Self-service or non-curated NFT marketplaces are open to anyone who registers to buy or sell tokens. There is no selection process or curation by the marketplace. Many mass marketplaces fall under this definition. They provide an accessible and inclusive environment for creators and buyers.
The key features of non-curated marketplaces include accessibility, lower entry barriers, usually lower fees, and a diverse range of NFTs. However, the drawbacks are increased competition among sellers and a higher number of potentially low-quality assets.
Curated NFT Marketplaces
Curated marketplaces have earned an excellent reputation for their commitment to quality and rigorous process of approving artists before allowing them to sell NFTs on their platforms. These are hubs of exceptional artworks created by famous artists, including NFTs minted by celebrities.
Curated NFT platforms pay a lot of attention to maintaining a high standard of quality. They employ curators with expertise in art and design related to NFT. They often offer exclusive or limited edition NFTs that are not available elsewhere. However, they charge higher prices and fees than other marketplaces, and the exclusivity and subjectivity of curators limit the opportunities for aspiring artists.
Mass NFT Marketplaces
Mass marketplaces for NFTs have familiar interfaces that are similar to well-known platforms like eBay. As a rule, they provide several transaction options – auctions and fixed-price listings. These trading platforms cater to a wide user base. Many of them accept both cryptocurrency and credit card payments.
The advantages include a user-friendly interface, which is just like that of popular e-commerce platforms, and simple website navigation. And as there are more users, they provide more transaction opportunities. Still, the high number of listings means that NFT creators face increased competition, and there’s a lack of specialised focus on specific niches or topics.
Niche NFT Marketplaces
Niche marketplaces focus on a particular sphere or topic – art, sport, games, or real estate. Such trading platforms are more specialised, and there, you may find recommendations and advanced filter algorithms.
Niche platforms are dedicated to specific industries, which is why they attract narrowly focused audiences. They have a stricter curation process, support high community engagement, and offer unique opportunities. However, such platforms have a smaller user base, a narrow range of NFTs, tighter requirements for creators, and potentially lower liquidity.
Where to Buy NFTs: Platforms with Exclusive Items and Collectibles
NFT marketplaces focus on different niches and have different reputations. Before you start buying or selling NFTs, you should conduct thorough research into the platform you intend to use.
Art marketplaces focus exclusively on buying and selling digital artwork. There’s a strong emphasis on art, including illustrations, paintings, NFT avatars, NFT virtual fashion, and animations. They support artists by offering tools like customisable profiles, insights, and analytics.
NFT art platforms raise a sense of community among artists, allow collaboration, and incorporate royalty mechanisms. There you can even find virtual galleries. Some examples are Foundation, SuperRare, Nifty Gateway, and Makersplace.
On the NFT marketplace, you have the opportunity to collect videos as valuable and unique digital assets. This was the reason professional sports-related videos and short clips from platforms like YouTube have become very popular.
While the original video may be freely available online, NFT of a certain clip gives you ownership and rights to resell it. This added value and the opportunity to earn money makes NFT clips a real asset. Platforms such as Theta Drop, Mintable, AirNFTs, and SuperRare offer opportunities to explore and purchase NFT videos.
NFT Gaming Items
Gamers now have the opportunity to buy, sell, and trade in-game items that serve to complement the core gameplay. These collectables can be exchanged with other players, providing extra value and personalisation.
What’s more, gamers often discover unique and rare gaming items or just simply monetise their gaming assets. There are several marketplaces for purchasing NFT game items, including Aetsoft, DMarket, The Sandbox, Enjin, and Binance.
As a crypto-financial startup, at Grapherex, we already offer a lot of interesting features related to crypto – a wallet, a card, a messenger, and an exchange. Our NFT platform is coming soon, so stay tuned!