NFT (Non-Fungible tokens) have taken the crypto world by storm over the last year, with many celebrities like Justin Bieber, Jimmy Fallon, and significant companies like Coca-Cola, Mcdonald’s, and the NBA. The list goes on. This mass adoption has made NFT’s transition from a niche new trend to a huge investment opportunity.
According to the latest estimate from Nonfungible.com, which monitors the NFT marketplace, the NFT market will grow from $42 million to $338 million in value by the end of 2020.
An NFT marketplace allows users to build an account, upload digital artworks and make sales. Content creators create NFTs by a process called ‘minting.’ They generate a representation of their file on the blockchain network. These distributed networks keep immutable records every time the asset is bought, sold, and owned. Thus, giving the current owner the sole right to change the ownership —security at its best.
Here are a few things you would have to think about before you step into the realm.
The big ‘WHY’?
The answer is – Millennials. Millennials have taken to crypto ever since. The undeniably higher yields than traditional investing options have grasped millennials’ attention. After the pandemic cost many Millennials their jobs and banks provided more loans, investing in cryptocurrency has sharply increased. They are substituting their now low income with potentially high return ways. Simple processing and a decentralized financial landscape have put the NFT marketplace on the top list for investments. With many social influencers sharing their success stories on social media, Millennials feel NFT is the way.
Choose your marketplace
Decide on what you want to monetize. NFTs need not be only art; they could be collectibles, video games, and virtual reality (metaverse). Streamlined and Augmented are two types of NFT marketplace. Streamlined markets support a more comprehensive range of NFTs but are generic and provide limited service options to sellers. They have responsive and intuitive NFT minting platforms. They closely resemble traditional platforms like eBay. The efficient transaction is of primary focus, and the payment gateway accepts Bitcoins and Ethereum. It attracts extensive and varied user bases because of its wide array of NFT sales.
On the other hand, augmented markets support narrow NFT niches like the NBA Top shop. They offer numerous value-add services like marketing, minting, portfolio, and highly rendered games. But these value-adds come with a higher price tag. Augmented markets generally have high upfront setup costs and transaction fees. Streamlined marketplaces typically have lower ongoing costs but require sellers to invest with their resources or hire experts to design, mint, and market their NFTs. So depending on your capital and your target audience, you may choose between the two.
Well, you are getting to the foundation. You need to develop a business model to market your products profitably and sustain them longer. Know your target audience. Understand your customer’s interests, buying capacity, and age group. Set up a roadmap and set achievable goals to help you stay on track.
Many NFT marketplaces offer their SDKs (Software Development Toolkit) where the infrastructure remains the same, and you can customize the design. But it has its shortfalls in terms of flexibility. To obtain a custom-made solution that meets all your requirements, get help from experienced developers. Hire a cohesive team to build a feature-rich and highly functional NFT marketplace.
The budgeting, however, depends on the amount of work required. It could cost $50,000-$100,000 or even more. This is just an estimation.
What does it take
In a market with many competitors, it’s only natural to be concerned about investing. But no single competitor is likely to achieve the dominant position for two reasons. One is due to the open nature of NFT blockchains. No seller can alter and create data moats that lead to monopolies. Second is the demand for multiple coexisting NFT marketplace. Focusing on different domains and offering different experiences help partners coexist in the same industry. Selecting the right niche will get you a chance to dominate the market and earn profitably.
Whether you are a major brand or an independent artist, go ahead and dip in a toe. Partner with the right platform or find your team of experts to secure your place in the digital world. Reach out to our Agiratech strategist to learn more about creating your own NFT marketplace.