What makes a good NFT Marketplace? However, with so many good NFT marketplaces popping up every day, it’s difficult to tell a good marketplace apart from a regular one. A couple of traits make NFT marketplaces stand out from the crowd. Let’s take a look at what makes a good NFT marketplace:
What is an NFT marketplace? Imagine an Amazon, where instead of various products, instead you can purchase NFTs. That’s how an NFT marketplace works: you browse through available NFTs, NFT collections, and NFT creators to buy whichever you want. NFT marketplaces also allow NFT creators to sell their own NFTs or for NFT traders to resell NFTs obtained through other means or by purchasing them from another seller. As per the HBR analysis, NFT marketplaces gravitate toward a winner-takes-all dynamics, which seems to be the case for many noteworthy NFT projects. Once an individual platform achieves mainstream popularity, it’s hard to knock it down unless other marketplaces start innovating. We analyze the different types of NFT marketplaces and how they have innovated below.
What is an NFT? An NFT is a non-fungible token. NFTs have significantly picked up in popularity due to their invisibility and resale profits. People also appreciate the artistic quality of NFTs and enjoy the value or utilities they provide them, usually manifested as perks out of the NFT itself or within a virtual reality like the Metaverse.
Types of NFT marketplaces The popularity of NFTs has opened the door to many good NFT marketplaces pandering to different audiences of NFT enthusiasts. There’s an NFT marketplace or two for any NFT trader in the present day. Harvard Business Review classified NFT marketplaces on a spectrum that goes from streamlined to augmented. Depending on their functionality, NFT marketplaces could also be considered custodial or non-custodial.
Streamlined marketplaces support generic services and cater to a general NFT audience. These are convenient for beginners, as anyone without deep knowledge of NFTs can quickly create an account on one of these and start buying NFTs or selling NFTs. Some of the most famous streamlined marketplaces are Rarible and OpenSea. These marketplaces are known as “general” marketplaces, as they offer NFTs from all types of projects without explicitly focusing on a niche. Augmented platforms have the advantage of differentiation among NFT marketplaces. Some of them might specialize in functionality rather than niche NFTs, such as offering an improved minting service compared to streamlined marketplaces. There’s a recurring number of traits that make some NFT marketplaces more popular than others. These are: multichain compatibility, credit/debit card optimization, lazy minting, and social interactions.
Multichain compatibility The need for a multichain NFT marketplace is proportional to the number of crypto investors willing to invest in NFTs. A multichain NFT marketplace bypasses the interoperability of NFTs, developing a platform where NFT marketplaces can be established on different blockchains. OpenSea is one of the few NFT marketplaces that boasts multichain compatibility with Solana, Ethereum, and Polygon.
Credit & debit card optimization Most NFT marketplaces require you to have a crypto wallet for purchasing NFTs and crypto tokens. While creating a crypto wallet for Ethereum using Metamask is relatively easy, not everyone is comfortable purchasing crypto to buy NFTs. People want to start purchasing NFTs in the most straightforward way they are familiar with: credit cards. However, not all good NFT marketplaces support credit cards. MoonPay employs an on-ramp and off-ramp service. On-ramp is the exchange of fiat currency for digital assets, while off-ramp is the exchange of digital assets for fiat currency. MoonPay’s popularity has been heavily linked with the popularity of the Bored Ape Yacht Club collection. The preference of fiat currency over crypto for buying NFTs is primarily due to the volatility of crypto assets’ value. After the May 2022 crypto crash, customer sentiment on the worth of most crypto assets lowered, leading to more NFT buyers preferring fiat purchases rather than crypto purchases.
Lazy minting Lazy minting refers to the minting of an NFT without paying for gas. Gas fees can be a detractor to many NFT enthusiasts who want to create. It refers to an NFT being available off-chain and only getting minted once a sale occurs. This allows the seller to not pay for the gas fees upfront and instead deduct them from the final sale price. NFT marketplaces that allow for lazy minting tend to be more popular than those that don’t.
Social interactions Social interactions immerse the NFT trader into the NFT community, allowing them a two-way channel for interaction with their favorite NFT creators. Coinbase NFT is an example of an NFT market that appeals to social interactions more than sales. That’s because Coinbase NFT allows you to comment other people’s NFT collections, drop likes similar to social media, and follow your favorite content creators all in one place. This saves people the time to keep track of all NFT projects they enjoy and keeps everything in Coinbase NFT’s interface.
Which is the best NFT marketplace? Depending on your goals as an NFT trader, some NFT marketplaces might be a better choice than others. Some might offer a more premium service while charging higher service fees. Others might sell NFTs exclusively in your niche of choice. Here are some of the most famous NFT marketplaces in the digital world:
OpenSea OpenSea is widely considered the best NFT marketplace for beginner NFT traders, and the biggest NFT marketplace of all. It has compatibility with Ethereum and Solana, covers all types of NFTs, and accepts a staggering 150 cryptocurrencies using MoonPay. OpenSea could be considered a streamlined NFT marketplace.
SuperRare SuperRare markets itself as an “Instagram meets Christie’s” type of marketplace, where it onboards a small number of select artists from the profiles submitted through the form on their website. Due to its exclusive, invitation-only nature, SuperRare could be classified as an augmented NFT marketplace.
Rarible Rarible is a marketplace that allows for the sale of NFTs submitted for approval on their website. It works similarly to OpenSea, allowing creators to set the price tag on their NFTs and their desired royalty percentage for secondary sales. They use their crypto, RARI, for sales. Rarible could be considered a streamlined NFT marketplace.
Mintable Mintable is an Ethereum-based marketplace that supports a wide variety of digital files, including JPEGs, PNGs, MP4s, and even PDFs, being one of the few NFT marketplaces that allow the minting of book NFTs. The platform offers low creator fees and features educational resources for traders who want to learn more about how NFTs work. Mintable could be considered a streamlined NFT marketplace.
Binance NFT Binance NFT is an NFT marketplace developed by crypto exchange giant, Binance. It’s a beginner-friendly marketplace with low minting fees, security features thanks to its integration with the Binance ecosystem, and low marketplace fees. On the other hand, minting permissions are more strict on Binance NFT than other NFT marketplaces. Binance NFT could be considered a streamlined NFT marketplace.
Final words on how to spot a good NFT marketplace It’s no wonder that so many different companies are looking to get in on the NFT marketplace action. But with so many options, it can be hard to know which one is right for you. Check out our other guides on What are NFTs.
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