What is an NFT marketplace?


NFT marketplaces are specialized platforms that facilitate the buying, selling, and creation of Non-Fungible Tokens (NFTs), which are unique digital assets representing ownership of distinct and scarce items, both tangible and intangible.

These marketplaces function similarly to e-commerce platforms like Amazon or eBay, but instead of physical goods, they deal with NFTs. To participate in these marketplaces, you need to have a crypto wallet compatible with the blockchain network that supports the NFTs you are interested in. You also need to pre-fund your wallet with the necessary cryptocurrencies supported by the marketplace. Additionally, you have to set up a user account on the marketplace platform.

Once you have everything set up, you can start buying, selling or minting NFTs. Buying usually involves direct purchases at a fixed price or through an auction. Selling, especially if you are selling something you created, may require a more technical process. You'll need to upload your digital asset on the marketplace and set a fixed price or opt for an auction. The platform will then verify your asset, and once approved, it will be listed for sale. The transfer from buyer to seller is conducted by the marketplace once a bid is accepted.

If you want to mint an NFT, you need to have a wallet that supports the token standard for NFTs, such as ERC-721 for Ethereum-based NFTs. After topping up your wallet with ether to cover transaction fees, you can use platforms like OpenSea or Rarible to start minting your NFTs. Remember, the process and fees may vary depending on the blockchain system you choose.

Types of NFT Marketplaces

There are numerous types of NFT marketplaces, each catering to different kinds of digital assets and user preferences. These platforms can be broadly classified into universal and art-oriented platforms, as well as niche-specific marketplaces.

Universal platforms like OpenSea or Blur offer a wide array of NFTs, including art, sports collectibles, virtual worlds, trading cards and domain names. Art-oriented platforms such as Rarible and SuperRare cater specifically to digital art, often hosting works from renowned artists and creators.

On the other hand, niche-specific marketplaces focus on particular types of NFTs, such as in-game items, digital collectible cards, and virtual real estate. For instance, NBA Top Shot is a marketplace through which users can buy and sell digital collectible cards featuring memorable NBA moments. Axie Infinity hosts digital pets called Axies, while Sorare is a global fantasy football game allowing users to trade virtual player cards. Decentraland has an in-house marketplace for virtual land or in-game items, while Valuables allows users to tokenize and sell tweets as NFTs.

When choosing a marketplace, it's essential to consider the type of NFT you're interested in, the blockchain system it operates on and the user interface and experience offered by the platform. Each marketplace has its unique features and requirements, and understanding these can help you navigate the vibrant and diverse world of NFTs more effectively.


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Tips for finding a NFT marketplace

When embarking on your journey in the NFT market, identifying the right marketplace is crucial.

Firstly, it's essential to understand that NFT marketplaces are not generic crypto exchanges, but specialized platforms where unique digital assets, represented as NFTs, are bought, sold, and minted. Familiarizing yourself with these platforms is the first step.

Remember, each marketplace caters to a specific type of NFT and operates on a particular blockchain system. 

Additionally, consider the user interface and experience offered by the platform. Each marketplace has its unique features and requirements, and understanding these is crucial for effective navigation.

Finally, bear in mind that the cost involved in minting and listing NFTs varies across different blockchain networks. While Ethereum is currently the most prevalent network for NFTs, alternatives like Binance Smart Chain, Flow and Solana are also gaining popularity. Choosing a marketplace should be based on careful consideration of these factors, ensuring a smooth and successful foray into the vibrant and diverse world of NFTs.

Disclaimer: This article was produced with the assistance of OpenAI’s ChatGPT 3.5/4 and reviewed and edited by our editorial team.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Ryan Weeks is deals editor at the The Block, focused on fundraising, M&A and institutional trends in the crypto space, among other things. He is particularly interested in investigative work — so please send tips! Ryan previously worked at Financial News, Dow Jones as a fintech correspondent in London. Prior to that, he wrote for several different publications, including Sifted, AltFi and Wired. Beyond journalism, Ryan is a keen reader and writer. He enjoys all things active, especially running, rugby, climbing and tennis.