Since the beginning of 2021, the market capitalization of NFT has grown from $23 million to $432 million. Interestingly, the scope of NFT Exchange Development isn’t limited to arts anymore. It has extended to music, videos, games, sports, fantasy sports, real estate, domain names, and much more. Needless to say that the demand for NFT token development has also increased. Apart from the already popular Non-Fungible Token Standard ERC721, other standards like ERC115 and ERC998 are also gaining momentum.
Before dwelling on how the NFT development landscape is evolving, let us understand why it is the right time to invest in NFT token or marketplace development.
Look at some basic metrics here that support the 2021 NFT frenzy.
Different types of NFT standards
Just like other token standards, NFT standards define a set of rules that a token must follow to act like an NFT. These standards determine the process of the Non-Fungible Exchange Development and the following characteristics of the NFTs:
–> How is ownership of NFT decided?
–> How are NFTs created?
–> How are NFTs transferred?
–> How are NFTs burned?
It was the first standard introduced for NFTs. Every token that is minted as an ERC-721 token is unique and has a different value from another token minted using the same smart contract. This is because of the rarity of the particular token, its age, or other factors.
Created by Enjin, ERC1155 is commonly known as a Multi Token Standard. It defines the standards for both fungible and non-fungible tokens. Moreover, ERC115 uses less fees than ERC721 tokens because it bundles the transactions.
Just like the ERC721 tokens, ERC998 tokens are also non-fungible in nature. However, there is one distinction between the two, it’s that the ERC-998 tokens are also composable. It allows NFTs to own other NFTs. There’s also a drawback attached to ERC998 tokens that they can become complex hence could get costly.
What are the characteristics of an NFT Marketplace?
Some of the leading NFT Marketplaces are Opensea and Rarible Blind Boxes. Opensea witnessed a 100-fold increase in its sales in the past 3 months of 2021. The characteristics of an NFT marketplace play a very important role in its popularity. Only a seasoned non fungible exchange development services company can help you identify the features required to build the right marketplace. However, here are some of the must-have characteristics:
A Non-fungible token marketplace must be completely decentralized in nature. Without being dependent on a third party for processing the transactions or executing monetization is the right way to offer NFT enthusiasts a democratic environment where their NFTs can generate non-manipulated values.
As explained above, the NFT token standard is not limited to ERC721 only. It has expanded to ERC998 and ERC1155. For the market to grow, interoperable trades between different NFT standards must be considered during non fungible exchange development.
Developers use different smart contracts in a marketplace to mint NFTs of a specific type. The marketplace must allow developers to program a limit on the number of the specific type of NFTs that can be created. This will add to the rarity of an NFT and hence to its value.
Trading an NFT instantly is a creator’s dream. The higher the liquidity of the platform, the greater are the chances of selling an NFT instantly. Thus, a highly liquid marketplace automatically engages more creators and traders.
In some cases, the NFTs might be developed in a way that they expire. To revive the same, the owner is required to pay some fees. This adds to the revenue of the marketplace and also incentivizes the original creators.
With the volume of transactions exploding in the NFT space, it is expected to penetrate more industries and become a widely used financial tool. If you understand the NFT space and realize its real potential, it is better to start early. Join hands with us to help you launch a top-notch NFT marketplace.