Everything’s fungible, right? Not quite — and you might be surprised by how much that applies to cryptocurrency.
The popularity of ERC721 non-fungible tokens (NFTs) has grown tremendously over the past year, and new NFT-based marketplaces are beginning to appear all over the crypto world. While the details vary from platform to platform, these types of NFT marketplaces will likely become commonplace in the nearest future, providing decentralized and trustless trading that’s limited only by the imagination of their creators.
So how do NFTs work? What are some examples of this technology being used? And what trends are developers starting to see within the nascent NFT marketplace space? Let’s answer these questions and look at what NFTs are and why you should look at them in more detail.
This article provides an overview of a non-fungible token (NFT) and various NFT marketplace platforms. We’ll describe what the non-fungibility concept means and how it works, show three types of NFT marketplaces, and share the four most promising NFT trends for the nearest future. In the end, we’ll show the ways to start your own NFT-related project and provide recommendations on where you can get essential help.
What Is a Non-Fungible Token (NFT)?
A non-fungible token (NFT) is a type of digital asset that can be owned and controlled independently, meaning that it’s unique in its characteristics. Unlike cryptocurrencies, there can only be one instance of each non-fungible token at any given time. For example, if you have 100 Ethereum tokens, they are all the same, while if you have 100 CryptoKitties, each one will be distinct.
How Does NFT Work?
In short, NFT creators generate ERC-721 tokens on top of the Ethereum blockchain by issuing their custom smart contracts. The latter define how these assets may be traded or sold. The character of each NFT allows every single unit to be distinguished and tracked with certainty as its ownership changes hands — unlike conventional crypto-collectibles like Bitcoin (BTC) or Monero (XMR). Their supply can increase over time due to hard cap limits in place.
Simply put, NFT tokens are unique thanks to a one-of-a-kind identifier, a single wrapping contract, and the ability to buy only one asset as a whole and generate a new one from the interaction of two NFT tokens. That’s the technology behind the non-fungibility of NFT tokens.
Where Can You Trade NFT?
The unique technology behind NFT calls for the appearance of a unique NFT platform where you can trade them. These marketplaces have different appearances and serve different purposes but share the same procedure. As an artist, you generate an NFT token through minting (for this, you should own a wallet for crypto like Metamask only), and as a buyer or a collector, you can view the whole gallery and buy ownership over NFT artworks you’ve chosen.
Types of NFT Marketplaces
Generally, an NFT marketplace is where users can buy and sell unique digital assets. However, since the type of these assets can range from the pieces of digital art to sport- and game-related collectibles (like Pokemon cards), the marketplaces differ too. Here are the main types of NFT platforms these days:
- Universal non-fungible websites
- Niche marketplaces
- Collectibles
Universal Non-Fungible Token Websites
These types of NFT marketplaces are like eBay for NFTs, meaning that you can find any sort of NFT collection there. Generally, these platforms are easy to enter and attract numerous users who can buy your tokens. That’s why it’s a good choice for sellers looking for a quick flip of an NFT investment.
Niche Marketplaces
If a universal NFT website is like eBay, these cryptoart platforms are fashion boutiques. In recent months, niche marketplaces are seeing increased popularity, thanks to their narrow specialization that attracts true cryptoart lovers with particular tastes. For example, the KLKTN platform is dedicated solely to K-Pop, anime, and J-culture, so if you’re a fandom fan, that’s the place you can find dedicated NFT sellers and buyers.
Collectibles
At times, NFTs can represent items for collections, like baseball cards, clothes in games, or even access rights to an event such as a live concert. The non-fungibility here means that each asset is unique – if you own asset A, no one else owns asset A and vice versa. Most popular NFT marketplaces allow selling and buying collectibles in their architecture, so picking the particular platform depends on the type of collection you’re interested in.
NFT Trends
NFTs were first introduced as the CryptoKitties virtual game in 2017, and since then, the interest and popularity of NFT have been only growing. Since NFT exchanges have no restrictions on which assets can be exchanged, this opens up endless possibilities not only in regards to what tokens or assets can be used but also how they will be used within games, collectibles, and beyond. In this section, we’ll describe some of the most promising NFT trends this year.
Turn More Objects into NFTs
Imagination is the only limit in what can become an NFT. Today, many projects are creating non-fungible tokens (NFTs) to tokenize various items such as real estate, fine art, collectibles, antiques, event tickets, etc. The future of digital collectibles will be a space where individuals can freely create new tokens that represent their interests and passions as well as buy and sell other people’s work on secondary markets.
Enter Metaverse
According to Binance Academy, Metaverse is “a concept of an online, 3D, virtual space connecting users in all aspects of their lives… [and] through NFTs, we can create [there] objects that are 100% unique and can never be copied exactly of forged.” In other words, with the development of Metaverse, the role of NFTs will increase simultaneously.
Create Platforms that Combine NFTs with Other Currency Types
The possible shift in NFT marketplaces paves the way to combining non-fungible tokens with standard fungible cryptocurrencies for increased exposure to digital goods. A marketplace could also help owners find players who wish to trade or use their digital assets on certain platforms or vice versa. Ultimately, there’s no reason why these platforms can’t exist side-by-side.
Similarly, blockchain-based collectibles may soon start appearing on mass trading platforms like eBay and Amazon; eBay already offers ways to buy crypto, including NFT drawings, photographs, posters, sculptures, collage art, and paintings. This opens up new markets previously inaccessible by many people around the world.
Build Your Own NFT Website
More companies become interested in crypto, and building an own NFT website sounds like a profitable idea, considering the current hype around these tokens. To create an NFT website, you need to have at least a basic understanding of smart contracts and blockchain. When you start, we recommend choosing a preferred NFT type (crypto-collectibles, digital art, etc.), knowing your target audience's appearance and needs, and picking a design team who can cover this project for you.
How to Enter NFT Marketplace Today?
As you can see, the NFT market is growing, the variety of marketplaces is impressive, and the perspectives of investing in NFTs attract more and more people each year. If you want to participate in an NFT marketplace today, it’s important to have a clear understanding of what non-fungible tokens are and how they work. Then, you can choose the NFT marketplace you like, make sure to have some Ethereum cryptocurrency in your wallet to pay for your purchases on whatever platform you plan on using. Also, remember that most platforms will charge a fee when converting your ETH into an ERC721 token and vice versa.
How Arounda Can Help in Creation of NFT Marketplace?
If you’re interested in getting your own NFT website or need professional guidance in your NFT-related project, you can contact the Arounda team for help. As a design team with experience in NFT, we can assist you in making your sole NFT item or an entire marketplace to sell unique non-fungible products with their own identity, like artwork or gift cards.
If you experience some problems or want to launch an NFT-related project, don’t hesitate to contact us directly! We at Arounda are ready to share our experience on the topic and help complete your project.
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