The Non-Fungible Token or NFT hype train is in full swing, with mainstream social media platforms like TikTok integrating Non-Fungible Tokens in their applications, giant apparel firms like Nike acquiring NFT brands, and almost all top celebrities joining the hype train. In the wake of this gold rush, a lot of blockchain firms are launching marketplaces for NFTs.
A marketplace allows digital creators, musicians, and artists to create, auction, trade, as well as collect Non-Fungible Tokens. But it is imperative to note that not all of these marketplaces are created the same. Some platforms leverage networks like Ethereum or Bitcoin to support liquidity mining, while some come with unique techs, like Concordium, to offer lower gas and security fees.
Some also provide customized features for community governance, allowing people to decide on the platform’s strategies and policies amicably. Either way, the right option usually depends on the person’s NFT aesthetic preferences and needs. In this article, we are going to show people what to look for in a Non-Fungible Token marketplace so that they do regret-free and informed decisions. Here are some key factors collectors need to consider.
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Consider token standards used on various platforms
As mentioned above, marketplaces might serve similar functions, but these things aren’t the same. For example, different platforms use different tokens. Every NFT has its advantages and disadvantages, depending on its application. Today, the most common standard used by Ethereum-powered NFT marketplaces include the following:
Ethereum Request for Comment (ERC) – 721
These things are the pioneers of Non-Fungible Tokens. Every unit is rare and unique. These NFTs are go-to options if individuals are into amassing unique and rare collectibles.
Ethereum Request for Comment (ERC) – 998
Besides being a non-fungible token, individuals can also compose 998s into complicated positions and trade them on single ownership transfers. Moreover, 998s can hold uniform units like the 20s. It is recommended to go for these standards if individuals want to hole diverse digital assets or portfolios for long-term gains.
Ethereum Request for Comment (ERC) – 1155
These things allow users to leverage the same smart contract to hold non-fungible and fungible tokens. This standard is best for people who are into NFT collectibles, which can be in the form of fungible tokens or in-game exchangeable assets for transactional currency.
Other standard units that people will likely come across include FA2s. Thanks to the unit’s unified contract interface, it supports transferable, fungible, non-transferable, multi-asset, and non-fungible contracts.
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The verification process of platforms for users
Scammers and hackers are never too late to ride on the hype train to prey on innocent collectors. As platforms continue to rise in popularity and proliferate to the mainstream, so are impersonators, scammers, and hackers targeting naive collectors and buyers. Because of this, individuals would want to make sure that the verification process of the marketplace, they chose is pretty tight to lock out general users and unscrupulous creators.
Remember that creators can tokenize almost anything on blockchain networks, whether GIFs, videos, music, or pictures. Some creators can sell these mintable collections without express permission from the original owners. The hard-earned money, thousands, if not millions, can disappear instantly, even before people know it.
To avoid these things, people need to make sure that the marketplace they pick gives a tight verification process. For example, it should include a two-step authentication process, either with biometrics or codes, to make sure only original creators can access their NFT accounts at a time.
Although a lot of platforms are yet to incorporate price discovery features on their online platforms, it is also important to both sellers and buyers. If people are joining a certain marketplace to sell their mintable art pieces, the price discovery feature will allow them to estimate the right rates that will attract their target buyers.
Similarly, buyers can use this feature to make an informed buying decision before they spend their hard-earned money on worthless collectibles. These assets are already mainstream, and individuals anticipate a wider mass adoption in a couple of years. This popularity will increase the market’s product liquidity, facilitating much better price discovery across different platforms.
NFTs can cost a lot of money, depending on the type of art, collector, or coinciding national or global events. Also, some individuals offer exclusive ownership of their art. It means that it can be the only design in circulation. In cases like this, collectors can price the piece as much as they see fit.
This thing allows people to purchase high-priced NFTs one part at a time instead of purchasing the whole collection. It is highly advantageous to both sellers and buyers. Sellers can cash out their collection in bits and assign the ownership in smart contracts instead of waiting for the highest bidders in open auctions.
Similarly, buyers can own an NFT as part owner without spending a lot of money. Token fractionalization makes assets accessible to almost anyone who can part with the lowest price collector or seller is asking for. It can enhance mass adoption, which is what this industry needs to offer better regulations and policies.
Marketplace ecosystems are not complete without intersections with traditional currencies. Individuals need to load their NFT wallets before buying or minting NFTs. They would want platforms that are compatible with different wallets or the one they prefer the most.
The integrations should be seamless, secure, and easy to enhance an excellent experience and the safety of their money. On top of that, marketplaces should support individuals who prefer connecting using their credit cards instead of online or mobile wallets.
There are other active marketplaces, and more will be launching sooner or later, giving people a lot of options. But just like any other platforms people interact with online, they want the one that offers a lot of value as long as they are using it. Different marketplaces have different incentives. It can be referral bonuses, profit-sharing, or discounts after unlocking a particular user status. Even better, some marketplaces can give lucrative incentives like allowing buyers to set royalty percentages, as well as commission rates.