NFTs have become quite popular recently, with their market cap surging to $2.5 billion in the first half of 2021 alone. As a result, there has been an increase in NFT marketplaces offering a platform for buying and selling NFTs. The marketplaces provide an excellent means of generating revenue with unmatched potential for Return on Investment.
Like other blockchain technologies, Non-fungible tokens (NFTs) are a massive evolution in the crypto space and an invention of financial and other industries. NFTs, the asset represented physically or digitally, is unique. No investment exists to replace it, whether it’s a song, piece of art, or collectibles. Each NFT is recorded on the blockchain and contains a unique identifier, making it impossible to exchange or the same as another.
Things such as money are considered fungible because there is no visible distinction between a dollar and another. Similarly, commodities of the same quality or stocks of the same company can be interchanged —see more on fungible vs non fungible tokens. But what does the NFT marketplace development process look like? What are the features a blockchain platform should have? This blog shares five qualities to look out for.
Cost of Transaction and Token Development
If you are to get value and a good return on investment, NFT transactions need to be reasonably cost-effective as they don’t always involve buying and selling NFTs at high prices. Instead, they are for regular micro-transactions involving digital collectibles, in-game digital assets, card games, and such. Naturally, people will shy away from paying exorbitant fees for such items.
Keeping the cost at a minimum is crucial for the adoption and usability of the marketplace. This is what makes the blockchain’s fee structure an issue worth your consideration. An ideal platform would not charge fees.
Robust Smart Contracts
Smart contracts make blockchain transactions easy and trustless. However, their robustness is the critical feature in contributing to the overall security that a blockchain provides. For that purpose, the platform needs to write clean, secure, and bug-free code. NFT marketplace smart contracts must be subjected to comprehensive and rigorous testing.
This is the only way both developers and users of an NFT marketplace can be sure of minimal risks of downtime, breaches, and hacks. The most prominent blockchain platforms known for building robust smart contracts are Algorand, Ethereum, and Flow blockchain.
Possibility of Forking
The value of an NFT is chained to its uniqueness and rarity. One thing that can pose a threat to these elements is the duplication of an NFT that can water down its sanctity. The explanation is simple. When block validators fail to agree or reach a consensus on proposals made by Group 1, or Group 2 stays on course, the network is divided into two. This creates two blockchains that begin as one then go separately, creating a hard fork.
That means that as the chains continue to spit, duplicate versions of the NFT emerge. Then, that asset ownership will be at stake, resulting in the original NFT losing its value entirely. That’s the reason you should consider buildings and NFT marketplaces on a forkless blockchain.
Speed is another crucial determinant of the success of a digital system and especially in NFT development. This is mainly for domains that involve the transfer and storage of value. However, speed shouldn’t come at the expense of security or in return for high costs. This happens on some blockchain platforms. When a system is quick, it creates a smaller window for attackers to access data.
Because of blockchains’ immutability, this can prove to be an enhancement to security features. A platform that can offer you this while remaining affordable and secure is an excellent choice for an NFT marketplace development.
This goes without saying. Security is a must-have feature when choosing a platform to build an NFT marketplace. Notably, blockchains are also vulnerable to attack, including man-in-the-middle attacks where transactions are interrupted during processing. Some consensus mechanisms such as Proof of Work (PoW) are particularly susceptible to these attacks.
When this happens, you lose access, data, and money. The result is often severely damaging to the marketplace. For better security, opt for blockchains with alternative mechanisms such as Proof of State (PoS), as they are mining free consensus, therefore more secure.
These are the crucial features to look out for in a blockchain platform when creating an NFT marketplace. Hopefully, this article offers you value and helps to point you in the right direction.