What is NFT Marketplaces?

NFTs have worn the world’s attention, taking netizens and tech fanatics to a new level. The industry has boomed enough to grow to a multi-billion dollar industry, generating millions of dollars in revenue for retail and institutional investors as well as NFT collections, artists, and Marketplaces.

What is An NFT?

To have an in-depth understanding of marketplaces, one must first understand the fundamentals of a Non-Fungible Token. A Non-Fungible Token, in simple terms, is a virtual-based token that is distributed and stored in the blockchain network. It includes digital items such as images and video files.

NFTs represent ownership of something rare, unique, and scarce whose information is stored on the blockchain network. NFTs are different from cryptocurrencies like Ethereum or Solana. Unlike crypto or fiat, NFTs can’t be used as a medium of exchange because each NFT is unique and possesses different traits and attributes.

What is an NFT Marketplace?

An NFT marketplace is a digital platform where buying and selling of Non –Fungible tokens take place. The platform allows NFT creators to sell their Non-Fungible Tokens to interested buyers. On the other hand, buyers use these platforms to procure minted NFTs using digital assets like Bitcoin and Ethereum. NFT marketplaces allow NFT fans to buy, sell, display and store NFTs. 

While most NFT marketplaces are built on the Ethereum and Solana Blockchain ecosystems, some are built on more miniature blockchain ecosystems like Tezos.

How Do NFT Marketplaces work?

NFT marketplaces resemble auction houses in terms of trading and network operations. The digital market allows buyers to bid for NFTs, just like people bid for authentic artwork during auctions. The highest bidder takes the art home. The more bidding, the higher the price will increase to a point where the interested party paying the highest price takes the ‘cake’ home.

NFT collections take advantage of these features by creating scarce NFTs as part of their collections, therefore increasing their value. Subsequently, the price of the NFT also increases.

The Minting Process

NFTs must be minted to be available for buying, selling, and displaying on marketplaces. This process involves the conversion of digital media into blockchain-based collections. The process fully integrates digital media into the blockchain network such that creators can track ownership of the minted art from one vendor to another.

Examples of NFT Marketplaces

NFTs exist in abundance, and many of them focus on specific niches. The following are the top NFT marketplaces currently making headlines in crypto news;

OpenSea is the largest NFT marketplace in the world, with a total valuation of more than 1.3 billion dollars. The marketplace is free to sign up for and has a very simple user interface. The platform support numerous networks allowing users from different blockchains to interact and trade.

Another enormous marketplace, like OpenSea, is Rarible. It supports all types of art, NFT videos, and other collectibles. However, unlike OpenSea, which accommodates 50 different payment tokens, Rarible only accepts buying and selling through its native token, RARIBLE.

Axie Marketplace is the marketplace for the famous play-to-earn game called Axie Infinity. Axie Infinity gamers can buy and sell in-game collectibles and NFTs through the marketplace. Players can also buy and sell Axies, the mythical creatures used as characters in the game, inside the marketplace. The platform also allows players to buy Axie land. Users can only transact in the marketplace using the ecosystem’s native tokens, Axie shards built on the Ethereum Blockchain.

Another central marketplace is known as NBA Top Shot Marketplace. This marketplace opens up basketball foray into the NFT world. The marketplace hosts NBA moments in the form of video clips and plays highlights that consumers can purchase from the world’s premier basketball leagues.

How Can You Buy an NFT From a Marketplace like OpenSea?

The first step of owning an Ethereum is possessing a cryptocurrency. The most preferred is Ethereum, especially when buying from OpenSea. One can purchase Ethereum from any exchange, such as Binance and Coinbase.

The next step is to have a wallet where you will store the newly acquired digital assets after purchase. For OpenSea, the most preferred NFT wallet is MetaMask. It is also the most used wallet on OpenSea. You should also make sure to secure your recovery phrases for security purposes.

Now that you have a wallet, it’s time to connect the wallet to OpenSea. Make sure you transfer your initially purchased Ethereum from the exchange to your MetaMask wallet.

Open your browser and launch OpenSea. Browse until you find an NFT that interests you and falls in your price range. Tap on the NFT you want to buy. Tap the ‘buy now button to buy at the seller’s broadcast price. Alternatively, you can make an offer to the seller in the form of a bid. To do this, use the ‘make offer’ button.

Agree to OpenSea terms and conditions, tap the ‘confirm checkout’ button, confirm the NFT purchase and finally tap the ‘Pay’ button.

NFT Marketplace Sales

The worldwide market sales worth of NFT art and virtual collectibles experienced a massive rise in 2021 compared to the previous year’s value registering a high of $11.16 billion. Unfortunately, the market came tumbling down at the beginning of 2022, with the bearish sentiment of digital assets at that time to blame. Overall, NFT sales made a record high in 2021, with over 2.57 billion dollars, increasing from the previous high of only 20 million dollars. 

With the rise of digital art and many projects in 2022, the crypto and NFT markets should see a potential rise towards the end of the year.