Everything you need to know about the development of the NFT exchange

Non-fungible tokens continue to gain momentum: just 5 years ago, the little-known NFT collection of Crypto Punks launched, but today it is one of the most famous and expensive forms of pixel art, with some costing several million dollars. According to CNET , around 250,000 users trade NFTs on the OpenSea platform, the most popular marketplace for buying and selling non-fungible tokens.

In 2021, users spent nearly $41 billion buying NFTs on DeFi platforms. According to DeFi Llama , over $20 billion worth of NFTs were bought and sold in popular markets alone:

With such high demand, the answer to questions like “should you start your own NFT exchange development?” it’s obvious. In this article, we’ll show you the benefits of developing your own NFT exchange, talk about what it takes to do it, the stages of creation, and the features needed to launch your project.

What role does NFT play in the development of the crypto industry?

NFT is not just another crazy trend in the crypto market, as some users still suspect, but a truly new form of digital art. As with many other innovations in human history, due to its novelty, users tend to underestimate the prospects that this type of digital asset presents. NFT token standards are provided by blockchain technology, which powers networks like Ethereum or BNB Chain. These networks enable the development and issuance of this kind of digital asset.

To learn more about non-fungible tokens, what their characteristics are, and how they differ from fungible tokens, we have published an article titled Non-Fungible Token Development: How To Create Your Own NFT Token?

We won’t go into what an NFT is right now, just briefly describe it.

Non-fungible tokens are a type of digital asset whose main characteristics are indivisibility, unique value, rarity and non-fungibility, which is reflected in the name. These tokens are a digital representation of a virtual or physical asset, and are issued via a smart contract like all others, including fungible tokens on various blockchain networks.

By providing a new kind of virtual digital assets, blockchain technology has transformed digital art. It has changed the way you can acquire, own, and use art that was previously only available to a small group of people. You don’t even have to own your NFTs — you can borrow art to use for your own purposes and even make money from it. However, the development of the NFT exchange is the best option for those who want to become part of a new and little-known industry that is likely to occupy a significant role in the future and play a crucial role in a futuristic civilization.

In fact, why buy expensive art objects that will inevitably become obsolete over time, require high storage and maintenance costs, and can be easily damaged, when you can buy a unique digital token stored forever on the blockchain?

Non-fungible tokens are traded on dedicated platforms called NFT marketplaces. Before we begin to describe the features and development process of our own NFT exchange platform, let us first evaluate what they are.

So what is an NFT exchange platform?

In a nutshell, NFT exchange or NFT marketplace Development is an online sales platform where users post, buy and sell non-fungible tokens or crypto collectibles. Some of the most popular NFT exchanges are OpenSea and Rarible. They sell the most popular crypto collectibles such as Decentraland. Sandbox. Crypto Punks, Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club. Just take a look at how high the trading volume is on these sites.

This is despite the fact that trading activity has decreased significantly due to the crisis that followed the hype around the development of the NFT exchange in the crypto world, which began in mid-2021. Now, the niche of non-fungible tokens it’s still relatively free, and there aren’t many projects that stand out among the many nameless platforms that just copy each other and can’t offer anything new. You can form a team to develop your own unique project or request complex services from an NFT exchange development company like ICODA .

Types of NFT Trading Software

You’ve probably heard of platforms for trading non-fungible crypto assets, such as OpenSea and Binance NFT. Although the principle of operation of these two platforms is very similar, they are very different from each other at the software level.

Centralized NFT exchange platforms

Such platforms are fully managed and controlled by a single company, which is also the custodian responsible for the custody of the assets. Users make a deposit on the NFT exchange platform to gain access to trading assets and submit a request to the company when they want to withdraw funds. The method of holding funds made its way into the crypto market from traditional finance, but it is becoming less important with the rise of DeFi.

Centralized markets are popular because they allow you to save on fees, since all transactions take place on the NFT exchange itself instead of on the blockchain. This solves the problem of high transaction fees that are mainly faced by users of the Ethereum blockchain network.

However, NFT owners and traders must entrust their funds to a platform that can unilaterally “block” access to assets at any time for a variety of reasons.

Decentralized NFT exchange platforms

Most NFT trading platforms are decentralized and powered by smart contracts. The advantage of such platforms is obvious: a decentralized exchange can operate autonomously without the help of humans. All you need to make it work is a team of developers, marketers, moderators, and support specialists, and even then, only if you want to.

Multi-chain connectivity

It is equally important that your NFT exchange supports multiple platforms and interacts with multiple blockchains and smart contracts. The more popular blockchains you connect, the more users you can attract to trade on the market and the higher the trading volume of the platform will be. Furthermore, this will ensure the competitiveness of the NFT exchange platform and set it apart from other markets.

For example, one of the most popular NFT exchanges, OpenSea, still only supports Ethereum and Solana networks. This means that many users who prefer alternative blockchains are lost and it leaves room for young and promising projects.

You can connect any blockchain except Ethereum, including sidechains:

BNB Chain

Solarium

Polygon

Phantom

avalanche

Cardano

Cosmos

near

Optimism (2-layer)

Arbitrum (2-layer)

This is not the complete list, but it is a good start. Of course, it should be noted that this will significantly complicate the development of the NFT exchange, and, accordingly, its cost. So you can start by adding the most popular Ethereum and BNB Chain blockchain networks and then gradually add the rest as the market develops.

Create a futuristic technology for your NFT exchange platform

You can use artificial intelligence technology for NFT exchange development to provide users with an innovative solution to help them exchange rare and unique assets. For example, one of the marketplaces may rate the rarity of each NFT posted on the site. They could even go one step further and create an AI that can identify NFTs based on specific criteria, but this may get very expensive in the future. The more unique and innovative your NFT trading software is, the higher the chances that your platform can rank high on the markets.

How to create the NFT exchange of your dreams: a step-by-step plan

Here we come to one of the most important questions: what needs to be done to develop the NFT exchange platform. You have to go on a long and difficult journey, starting with a stack of technology and ending with a marketing campaign to engage the community. Let’s discuss step by step what actions we need to take to launch our own NFT platform for trading unique assets.

Design your NFT exchange

It all starts with the design. Consider this: what will be the main functions of the NFT exchange and what should be created first? This is especially important if you have a limited budget: if there is not enough money for everything, then most likely you will have to give up some features in order to launch at least the first version of the NFT exchange platform. These are the most important functions that must be present in any system:

Crypto wallet connection through a given network. To begin with, one network is enough: Ethereum. This blockchain has the most users among the other platforms, but if possible connect other networks like BNB Chain, Fantom, Avalanche, and Solana to attract even more users.

Placement and negotiation of NFTs. When you start the platform, users should be able to post their tokens for sale and buy them from other sellers. You also need to make sure that there is instant liquidity.

Fiat support. This item is optional but provides additional startup benefits but increases the cost of developing the NFT exchange. You also have to comply with the anti-money laundering policy rules, but at the same time, you can offer users a white-label NFT exchange.

Security means. At the initial stage, reliable HTTP authentication, a secure crypto-wallet connection, and a smart contract without vulnerabilities (backdoors) are sufficient.

Functionality for NFT drops. Token sales will help attract new users as they allow you to buy tokens at a low price and often make a quick profit right after the event; this will only favor the development of the NFT exchange.

Development of NFT exchange

You can look for a development team on your own, but it is best to entrust this issue to an exchange platform development company with a wide portfolio and success stories like ICODA . A team of experienced developers knows all the necessary steps, algorithms and subtleties to create such platforms, which significantly reduces development time. In addition, you will free yourself from unnecessary tasks and find time for other important things.

make private sales

The concept is straightforward: the project will develop more quickly and easily the more private money you attract to it.The funding will help attract qualified developers to develop the NFT exchange and open new doors to promote the platform. Find experienced advisors or start an ambassador program — this is common practice for projects not just in the blockchain space. The stronger and larger the community is at the beginning, the faster and easier development will be in the future.

Final Stage: Marketing and Promotion

Finally, after the development of the NFT exchange, you will need to carry out a massive marketing campaign to ensure high demand and immediate liquidity. Here’s what you’ll need marketing for:

Attract well-known artists and authors interested in the platform to publish their works.

Find distributors and investors who can show impressive trading volume. This allows you to show that your product is in demand, which additionally helps with promotion.

Attract funding from large investors and companies. New investments expand the scope of the project and the development of the NFT exchange.

ICODA exchange platform development company is dedicated to the professional promotion of NFTs and crypto startups and will help you successfully promote your NFT exchange platform from the very beginning.

Conclusion

Developing an NFT Marketplace is a complex, expensive and multifaceted task that only a strong team with relevant experience can successfully accomplish. To avoid failures and ensure smooth trading, you need to be professional at every stage of developing an NFT exchange: designing a market, launching and providing immediate liquidity, advertising, and initial user interactions.