The NFT industry continues to gain momentum. And if earlier no one thought that memes could be sold, now it is more than crypto art. We are here to discuss NFT marketplaces, explain how to choose one, and give a review for the best of them. Let’s get it started.
What Is NFT?
NFT stands for a non-fungible token, which means non-fungible token. In simple words, a token is an object, non-interchangeable means unique. In essence, NFT is the right to a unique digital object that can be sold like an original Da Vinci painting, and only one person can be the owner of a genuine product – the buyer. The NFT Marketplace is a marketplace for selling digital art and collectibles.
The popularity boom of the NFT industry was born based on popular memes. Now paintings, photographs, music, game items, and equipment act as tokens for sale. Sales are conducted based on an auction.
NFT Token Standards
Just a year ago, most NFTs were built on Ethereum and issued as ERC721 tokens. Ethereum implemented the first ever NFT token standards and pioneered the NFT field. ERC721 is still the most commonly used NFT token standard.
Now the situation is different, as various blockchains support NFT. The creators who originally built NFTs on Ethereum have moved on to other blockchains or created their own, such as the iconic CryptoKitties.
The standards for NFT tokens on different blockchains or even on the same one vary depending on their smart contracts. Some of them have different or wider functionality than others.
Thus, new NFT creators or sellers should remember to check which tokens support standard NFT markets.
What Is Being Sold As an NFT? Examples
GIFs. The most famous NFT sold on the Internet is the Nyan Cat gif, a cat that rushes through space and leaves a trail of rainbows behind it. In February 2021, she turned 10 years old, in honor of this she was sold on the Foundation platform for 590 thousand dollars.
Photo. A photo of Kevin Ebosch titled Forever Rose was sold for $1 million on Valentine’s Day. At the same time, before the NFT craze, the author managed to sell a photo of a potato for 1 million euros.
NFT game. For example, in Axie Infinity, players create and breed digital pets. Each character is an NFT token, which the creator can sell or purchase on a special marketplace. The game is very popular all over the world and some players earn up to $1000 every month.
Audio tracks and albums. American DJ 3LAU sold his music album through NFT tokens. In total, he staked 33 album-linked tokens and earned $11.6 million. Linkin Park founder Mike Shinoda sold an animated music video for $30,000. Animated covers for his album “Happy Endings” brought him $6,600 in the same NFT industry.
Tickets for events. FC Dynamo has released NFT tickets for the 2021 season. AirEuropa has created a series of tickets for a flight from Madrid to Miami on November 29, 2022. S7 also thought about selling tickets for tokens to speed up bookings.
NFT collections. The mascot of the Winter Olympic Games in China has been given a new life in the form of tokens. The collection consists of a panda involved in different sports.
Personal items. Former CIA officer Edward Snowden has sold his portrait, assembled from a judge’s ruling. The work was sold for 5.4 million dollars, and all funds were transferred to the foundation for freedom of speech in the press. The work was called “Stay Free”.
What Is NFT Marketplace?
NFT marketplace is a platform where you can create, store, sell and buy tokens, as well as participate in auctions. NFTs can be digital art, intellectual property, gaming assets, branded collectibles, etc.
Almost every blockchain has its own NFT marketplace running on it. And as the industry rapidly evolves, new types of NFT marketplaces are emerging.
Some of them specialize in certain types of NFTs, such as music or digital art, while others are broader and more general NFT markets. Some NFT marketplaces are open to the public, while others operate as private clubs and require an NFT seller to apply to be listed.
Today, there are several dozens of operating NFT marketplaces in the world. It is difficult to name the exact number of such sites, as new ones appear regularly. Some marketplaces were created for narrowly focused projects, for example, for fans of a certain game, some are experimental, and some are designed for a wide audience. There are also platforms for well-known artists, which are closed to beginners.
How to Choose An NFT Marketplace
Since the range of NFT marketplaces is wide, it can sometimes be difficult to choose where to mint, sell or buy NFTs.
To avoid wrong decisions, every new NFT creator or investor should be aware of certain aspects that need to be considered before choosing a platform. This will not only help you narrow down your search and save time, but it will also allow you to reach a more targeted audience.
While there are various options, three main types of NFT marketplaces currently dominate: open, controlled, and proprietary NFT markets.
Open marketplaces like OpenSea or Rarible allow anyone to mint, buy or sell NFTs. They allow all types of NFTs, from music, art, and virtual world assets, to any other type of fungible token. Some of them support NFTs that have been minted outside of their platforms. However, this is highly platform-dependent.
Controlled marketplaces such as SuperRare, Nifty Gateway, Foundation, or KnownOrigin are more exclusive and decide which NFTs they allow being minted and auctioned. NFT creators must fill out an application to participate on the site.
Proprietary NFT marketplaces are the most restrictive and only allow NFTs minted by the marketplace itself to be displayed. Due to limited supply, these markets typically experience high demand and asset prices. The best examples of proprietary NFT markets are Bored Ape Yacht Club, Top Shot, and Vee Friends.
NFT marketplaces charge a fee as this is their main source of income. Typically, they charge several types of fees, including upfront fees and transaction fees.
The upfront fee refers to a one-time payment that the first user pays to open an account and deposit NFTs. Whether the down payment is fixed or varies depends on the market.
Fixed price commissions. Different marketplaces have their charging policies, but usually, the transaction fee is split between buyers and sellers. Some marketplaces only apply fees to NFT sellers.
The more payment methods for NFTs, the better. Cryptocurrencies are the main payment method in the NFT markets, although some of them accept fiat currencies for purchases.
However, support for cryptocurrency wallets may vary across NFT marketplaces. This may vary depending on which blockchain the marketplace is built on and which token standard it supports.
Best NFT Marketplaces
Now that you know more about marketplaces and their working mechanics, let’s explore some of the top NFT marketplaces known. Of course, as we have already mentioned above there are a lot of marketplaces now, and most of them are doing a great job, but today we are reviewing only 5 of them.
Opensea is the first platform based on Ethereum. Launched in 2017, in five years it has become one of the most popular marketplaces, accounting for almost 90% of NFT trading. Users are attracted by a simple and intuitive interface, as well as the ease of creating, buying, and selling a token.
The original Cryptopunks and LAND x Decentraland can be bought on this platform. It also allows for cross-platform secondary sales.
The OpenSea protocol uses ERC721 and ERC1155 standard NFT collections. You can pay for purchases with any ERC20 tokens.
A feature of OpenSea is a wide range of categories. Popular categories include art, sports, trading cards, and projects from famous artists. Also, on the site, you can buy NFT in the form of audio, a domain name, or a 3D object.
The standard OpenSea commission is 2.5% of the NFT price. The commission is charged to the buyer. The creator of the token pays for transaction gas only at the first placement.
Art, photos, music, games, digital universes, domain names, and even memes are all sold and bought on the Rarible NFT marketplace.
Rarible allows digital artists and creators to issue ERC-721 and ERC-1155 NFTs to represent ownership of digital works of art, bringing Decentralized Autonomous Organization (DAO) features and combining them with NFT capabilities on a single platform. In a fully decentralized autonomous organization, users are responsible for all network management decisions. The team behind it is working to turn Rarible into a true DAO, and this is where its native Rarible coin comes into play.
Rarible has many positive qualities. For example, a seamless interface for creating unique NFTs, a quick and easy process for creating collectibles and artwork, and a simple and interactive UX/UI that allows even non-tech-savvy users and artists to efficiently create and share their work. In addition, the market provides access to a vast customer base with many users around the world. In Rarible, users can run auctions and automate royalty payments using smart contracts, as well as use an offline governance model. Finally, Rarible collectibles are secured on the blockchain, and all users go through a series of background checks to maintain their legitimacy, including verifying and linking Twitter user accounts before listing.
Binance NFT marketplace is a platform for buying and selling non-fungible coins launched on June 24, 2021. The marketplace is a standard trading space for collectibles and art.
The Binance NFT Marketplace uses its own Binance Smart Chain blockchain instead of Ethereum. At the same time, the platform pays great attention to the security and speed of transactions. For example, Binance uses the Trust Wallet crypto wallet, which assigns a separate code to each NFT token.
Also among the advantages of the site is the lower cost of creating tokens and executing transactions. Thanks to the large community, NFT tokens are selling well on Binance. The best collections and authors are placed in the top block of the marketplace.
On the platform, you can not only issue and sell non-fungible tokens but also arrange NFT presentations created by famous personalities. The marketplace also supports the sale of mystery boxes — closed boxes that can contain both very rare tokens and regular NFTs.
The Foundation is primarily a large platform for interaction between digital artists and NFT collectors.
The main difference between the marketplace and other sites is that it does not accept everyone. To get to the Foundation, you need to get an invite from a reputable member of the platform. Not every artist registered in the community can send an invitation. The ability to share invites is available only to high-ranking NFTs whose NFTs sell well on the crypto market.
The platform runs on Ethereum and uses coins of the same name as the main currency. Users can buy and sell tokens, as well as participate in auctions. All important questions about the activities of the platform are taken by the artists themselves by voting.
Magic Eden is an NFT platform built for the Solana network that facilitates buying, selling, and issuing NFTs. NFT transactions are similar to Ethereum except that users will be charged a 0% listing fee and only 2% transaction fees, which lowers barriers to entry for new and experienced NFT buyers and creators. The SOL tokens are a means of paying fees.
The main product of Magic Eden is the secondary market. Projects must first apply to list their NFTs on the Magic Eden Marketplace, but once approved, the NFTs are free to sell, buy, and sell. The marketplace has several unique features and benefits that provide added value to users, such as:
- A popular collections page that shows which designs are popular and allows users to find trending NFTs.
- An attribute filter that allows users to quickly filter NFTs and find specific constructs.
- A detailed statistics page that shows each NFT’s total rate, volume percentage, floor price, and cost allows users to conduct better research and make more informed investments.
Now you know more about top NFT marketplaces and can choose and begin your NFT journey. But note that NFT marketplaces are not the same, choosing the right one is a decision that requires proper research to start selling NFTs or effectively investing.