Get Ready for the Future: NFT Marketplace Development Solutions

NFT marketplace development solutions can open the door to a lucrative market. There are just two detractors: expertise and competition. You need the expertise to build a user-centric, secure, and future-ready decentralized platform. And the competition only adds to the complexity.

We say jump on the bandwagon before it gets too fierce. After all, the NFT industry raised $8.32 billion and hit a $5.6 billion monthly trading volume in 2022 (both are all-time highs). And, according to the same report, platforms are actively competing for liquidity. Forecasted to see a growth of 35% by 2026, NFT marketplaces have caught the attention of investors worldwide, sparking unprecedented levels of innovation. This signals an enticing opportunity for entrepreneurs eager to profit from a booming NFT market, which is expected to surge by a staggering $146 billion. There's no better time to tap into this explosive growth and carve out a profitable venture in the ever-evolving NFT space.

In this post, we'll outline the basic NFT marketplace development solutions and the key points of interest to show you how big the possibility is.

Benefits & Features of NFT Marketplace Development Solutions

NFTs, as unique tokens, cannot be swapped for tokens of equal value, preventing their trade on conventional cryptocurrency platforms. In order to effectively accommodate trading, a platform designed exclusively for showcasing, storing, selling, purchasing, and exchanging NFTs is essential — which is the exact purpose served by an NFT marketplace.

Navigating NFT marketplaces is quite straightforward from a buyer's or seller's viewpoint. Users simply require an account along with a connected digital wallet to either put up their NFT for auction or to place a bid. The operations of NFT marketplace platforms are handled by smart contracts that supervise transactions - they only approve fund transfers once all the terms of the trade are satisfied. The catalogs of NFTs available for sale are diligently overseen, with the platform's moderators retaining the authority to eliminate any works not aligning with the platform's content guidelines.

Think of an NFT marketplace as a virtual gallery, where artists showcase their creations for customers to browse and acquire instantly, granting them exclusive ownership rights to one-of-a-kind assets. An NFT marketplace lets creators, collectors, investors, and gamers trade digital art. Yet, most successful blockchain platforms do share some capabilities:

• Asset minting. You can let users create, list, and sell NFTs without leaving your platform.
• Searchability. A robust engine, item categories, and filtering options make it easier for users to discover, trade, and rent digital assets.
• Data security. Transactions are stored on the blockchain — an unalterable, fault-tolerant database, while smart contracts process transactions without external parties to reduce the risk of fraud.
• Content moderation. A healthy trading environment helps users avoid fraudulent or illegally acquired digital assets.
• Reward systems. These incentivize users to hold NFTs within your platform by rewarding creators with tokens, introducing discounts, exclusive governance rights, and the ability to generate passive income by staking and renting assets.
• Transparent transactions. Activities on your NFT marketplace are publicly available. It allows anyone — traders, business stakeholders, and third-party auditors — to verify transactions.

Your platform might require other functionality — that's no problem. If you know what you need, ElifTech has experience in white-label NFT marketplace development, so we can create a pre-built platform for you with numerous customization elements.

The client-side perks for users of an NFT marketplace are evident. Artists and creators acquire a highly secure platform to promote and sell their creations, and the process of selling tangible properties becomes much safer and more transparent.

But what about the investor’s perspective?

The continued popularization of NFTs: Seeing brands launch their own NFT collections is a clear indicator that NFTs have a firm foot in the future. As more recognizable names like McLaren, Nike, and even Gucci dive into the NFT pool, the number of unique brand NFT enthusiasts willing to partake in auctions for exclusive collectibles will inevitably rise. This growth will consequently drive the demand for NFT art marketplace development.

Steadfast resilience of NFT marketplaces: Despite potential economic downturns affecting NFT platforms, they continue to stand their ground with fierce competition, continually pushing the boundaries of innovation and opportunity. By the end of 2022, OpenSea (one of the most prominent NFT marketplaces) achieved a global value of $50.1 billion, rising from $40.9 billion in 2021.

The perfect synergy of remote working and NFT marketplaces: Businesses are continuously adapting to the fast-paced digitization, necessitating a reimagining of their customer management strategies and the development of more human-centric systems. NFTs represent a treasure trove of possibilities in this respect, offering businesses a chance to gamify their operations and appreciate loyal customers and partners with unique, valuable NFTs. Similarly, NFTs can be utilized to augment employee recognition and establish a system of rewards and achievements.

Drawing from these insights, it is evident that the NFT sector has evolved to a point where it's attracting significant players. Such progression serves as an unmistakable signal for investors still contemplating NFT marketplace software development and solutions - delaying might risk getting left behind in the face of rapid competition.

NFT Marketplace Development Process: Step-by-Step Guide

Based on our experience in software development, here are the fundamental stages of the NFT marketplace development.

Research and Discovery

A well-rounded understanding of your target audience, competitors, and the digital asset market as a whole is essential for the platform's success. During this stage, you should consider the following questions:

• Audience. Who will use your platform? Will you focus on NFT investors, digital art collectors, content creators, or gamers? Do you plan to fill a specific niche, like social metaverse users?
• Trends. What types of digital assets are currently trending? Which may gain popularity based on recent research?
• Focus. Do you want to develop an NFT marketplace for other companies, first-party content (NFTs for your products), or both?
• Guidelines. What copyright policies will you implement to prevent unauthorized use and distribution of original works? Will you regulate how outside actors (including NFT holders) use your IP for commercial purposes?
• Validation. What technologies should your marketplace incorporate to verify NFT items/collections?
• Competition. How can you set your marketplace apart from competitors? What functionality do they offer, and which technology stack did they use?

Next, you should identify what types of NFTs your platform should support. This could include art (regular and AI-generated), music, videos, access rights, game assets, or metaverse items (for online virtual worlds). With NFT marketplace development, companies provide unique digital tickets for exclusive events (online and offline).

You can also invest in physically backed tokens and scan-to-own technology that binds real-world items to NFTs. Developing an NFT sports marketplace lets users trade virtual autographs, player cards, and other digital collectibles. Allowing users to trade fractional NFTs (divided assets) will also create trading opportunities in your marketplace.

These basics lay the foundation for the rest of the NFT marketplace development services, including the blockchain network, consensus protocols, and front end.

Read more: ElifTech's Research & Development Services

Decide on a Revenue Model

NFT marketplace development solutions should balance profitability and user value. The main ways you can generate income are fees and advertisements. Niche platforms — like Sandbox virtual worlds — often charge higher fees. At the same time, according to the Block's 2023 Digital Asset Outlook, 2022 saw the emergence of zero-fee platforms like Sudoswap.

Creator royalties provide recurring income for artists on your platform. But this aspect also requires balance — higher royalties increase trading fees, which can deter users from your marketplace. The same report shows how Goblintown outpaces other projects due to low royalty fees.

Front-End and MVP Development

Decide on your marketplace's key features, user interface elements, and functionality. Now, you should translate your concepts into a user-friendly platform. Remember that your design should be responsive and adaptable to different devices and screen sizes.

Read more: Guide to Digital E-Wallet App Development

Blockchain Network Integration

Blockchain provides the underlying infrastructure for secure transactions on your NFT marketplace platform. Integrating with an existing network lets you leverage established validation mechanisms and impacts how many unique digital assets your marketplace can support. Here are the things you should factor in:

• Gas costs — transaction fees that impact the prices of transactions. Ethereum, while being the most widely used network, usually has higher costs due to network congestion and demand. Less popular networks like Polygon and Solana have lower gas costs.
• Transaction throughput — the number of transactions the network can handle per second, which is crucial for efficient processing. Ethereum can handle around 35 transactions per second, whereas less popular Solana has a theoretical peak of around 750,000.
• Interoperability — lets your NFT marketplace work with other networks and tokens. For example, building on Ethereum Virtual Machine networks means you can support ERC-721 and ERC-1155 standards, which are used in most NFTs.

The designers must collaborate with developers when creating mockups for the layout, navigation, and UI elements. Your users might want to filter items based on asset type, author, rating, or cryptocurrency payment options. Ensure it's easy to see information about an NFT's origins and the owner's previous activity.

Using the initial feedback, build a minimum viable product (MVP) — a barebone version of your NFT marketplace with basic features. This will help you cost-effectively validate your product: you'll understand if there's enough demand and whether your revenue model is viable.

• Consensus protocol — allows the network to validate transactions. These protocols have varying degrees of security and energy efficiency. The most popular options are Proof of Work (solving mathematical problems) and Proof of Stake (staking tokens).

The Digital Asset Outlook report shows a shift toward modularity. In a monolithic system, a single protocol handles all core functions: executing, settlement, consensus, and data availability checks. In the modular model, delegating protocols can handle different operations.

Example: Ethereum handles settlement and consensus tasks, while Celestia is responsible for data availability. Such architecture can increase your platform's efficiency and shave off transaction costs.

Contract Layer Development

Smart contracts process transactions on your NFT marketplace without financial intermediaries. It's their job to:

• Automate trading operations (like minting, bidding, buying, and selling)
• Manage creator royalties
• Maintain ownership history for each digital asset
• Grant access to exclusive content
• Hold NFTs and release them after specific conditions are met (escrow)

The contract layer follows a simple “if/when” + “then” formula: if or when some conditions are met, then specific actions should be taken.

This means a lot of work. Developers should consider all potential functionality, set governing rules, and define a dispute resolution framework. It's also critical to select a programming language, development tools, and libraries compatible with your chosen blockchain.

Now that you've grasped the fundamentals, let's prepare you for the challenges.

Overcoming the Challenges of NFT Marketplace Platform Development

Even if you follow our guide closely, you're guaranteed to run into blockchain limitations. Below, we name some of the most prominent challenges and ways you can solve them.

Contract Layer Risks

Smart contracts can introduce vulnerabilities into your NFT marketplace. For example, the incorrect implementation of signatures or asset transfer mechanisms may result in unintended behavior. Hackers can also exploit accepted algorithmic characteristics to change the desired behavior.

Even worse, you can't change the contract layer after deployment. In other words, every potential vulnerability is there to last and, therefore, can lead to data breaches.

You need a systematic development methodology with rigorous testing, debugging, and verification to prevent errors and bugs. It's best to hire an experienced NFT marketplace development company for your project requirements and an in-depth nft smart contract development and audit.

Scalability Problems

Blockchains face the "scalability trilemma,” where they can only accomplish two of the three goals — security, decentralization, or scalability — and sacrifice proficiency with at least one. You can tackle these issues with Layer-1 (blockchain protocols) and Layer-2 (the network operating atop the same blockchain technology) solutions.

For Layer-1 improvements, developers can change the consensus protocol and implement sharding. Sharding breaks transactions into smaller datasets — they are simultaneously processed by the network (in parallel). As for consensus protocol, some other NFT platforms, trading platforms, and marketplaces can depart from Proof of Work to a less resource-intensive Proof of Stake or Proof of Burn mechanism.

Layer-2 solutions include sidechains, nested blockchains, and state channels. Sidechains are independent transactional protocols that use an independent consensus mechanism for large batch transactions. In a nested blockchain, a decentralized secondary chain executes some tasks to reduce the processing burden. Finally, the state channel improves communication between different blockchain networks and off-chain transactional channels.

Throughput and Gas Fees

High transaction fees and low throughput can pose a challenge during NFT development and marketplace development. Platforms built on the Ethereum Virtual Machine may deter some users due to the fees alone.

To overcome this issue, you can go for alternative networks. For example, minting an NFT with Ethereum may cost up to $150 (based on the trading price). However, creating an asset on Solana or Polygon is only a few cents.

Again, Layer-2 solutions can increase the transaction throughput. Particularly, sidechains and state channels can offload operations for the main blockchain, improving processing time and lowering costs.

NFT Storage Limitations

Blockchain is suited to storing large media. A typical NFT contains metadata with a URL that points to the associated media (like a painting, photo, or video) hosted on a conventional web server.

These links are fragile. Should the website or domain become unavailable (due to server outage or data loss), the NFT owner may lose the ability to verify the digital ownership of the digital item.

To address these risks, developers store larger files on decentralized storage networks like Filecoin. It's also possible to use the Interplanetary File System (IPFS) hypermedia protocol to store files using content-addressing. IPFS uses cryptographic hashes based on the content instead of location-based links. Even if the file's location changes, the hash remains immutable, meaning NFT owners retain their assets.

Overcoming most of the challenges of NFT marketplace development requires first-hand experience and technical skills. Fortunately, that's something we're pretty good at.

Work with the Right NFT Marketplace Development Company

A trustworthy partner is critical for the success of NFT marketplace development solutions too. By working with ElifTech, you can take advantage of our expertise and experience to build a secure, scalable, and user-friendly marketplace that can compete with the industry's best.

• Bespoke NFT marketplace development. We cover all stages of the software development life cycle. Our team emphasizes research to determine the optimal stack, architecture choices, and features for your platform.
• Client communications. A dedicated Delivery Manager provides clients with regular updates about the product's status. This promotes transparency and ensures requirements are effectively implemented during development.
• Quality Assurance. Comprehensive planning, testing, and quality control let us remediate performance and security issues early on. This lets us deliver bug-free smart contract algorithms, resource-efficiency protocols, and a user-friendly UI.
• Prototypes and demos. We produce demos, prototypes, and MVPs to validate your NFT marketplace with minimal costs. If needed, we will reiterate and refine the designs until the client is satisfied.
• Security and compliance. Our company employs robust authorization mechanisms, role-based access, and a zero-trust policy. We protect your confidential data and ensure the safety of transactions on your marketplace.

Read more: Why You Need a Technology Delivery Manager

Final Thoughts

NFT marketplace development solutions hold immense potential — if the development team knows what it's doing. Our guide outlines the core steps and considerations, but blockchain-based projects depend on expertise.

Before the development begins, you should understand what the NFT market enthusiasts desire and have grown to expect from their NFT solutions and marketplaces. You must delve into the inner workings of the underlying blockchain infrastructure, consensus mechanisms, and smart contract algorithms. Meanwhile, your team should be able to address the technological limitations. Before proceeding with NFT marketplace app development, you should research the market to create a sustainable and competitive revenue model. Make sure your dedicated development team has the technical expertise and follows the right methodology to ensure cost-efficient NFT marketplace software development.

A reliable partner can fill skill and knowledge gaps. We at ElifTech are well-versed in blockchain-based technologies. We strongly emphasize the discovery stage to ensure the platform meets your requirements and industry standards.

Whether you want to proceed with a one-of-a-kind platform or a customizable whitelabel NFT marketplace development — ElifTech can help. Join us for a conversation on how to build a future-proof product today.