Cost of NFT marketplace development explained

The virtual goods market is worth an estimated $30 billion today, growing with the social gaming trend. Non-fungible tokens, or NFTs, are digital assets that are unique and non-divisible. They are also known as tokenized assets because they have properties of a game token.‍ Non-fungible tokens can be used to represent unique digital objects such as in-game items or physical real-world objects like artwork or collectibles. Because of these characteristics, NFTs are the ideal way to represent virtual goods in any application. For example, NFTs could be used for a video game (virtual items), eCommerce (digital artwork), IoT (physical devices) and much more. This article discusses the cost of NFT marketplace development in detail.

Understanding the Basics of Non-Fungible Tokens

As elucidated in the introductory section, NFTs are digital assets that are unique, non-divisible, and primarily employed for representing virtual goods or tangible objects. These non-fungible tokens have been rapidly gaining momentum in the crypto asset market over the past year, owing to their distinctive properties. The utilization of NFTs has a wide spectrum of use cases, ranging from gaming and virtual items to artwork and stocks, among others.

One of the key advantages of using NFTs for representing virtual goods is the process of tokenization. This process involves creating digital tokens by leveraging cryptography and representing an asset, be it virtual or real-world, as a digital token on a blockchain. The token, in turn, functions as a representation of the underlying asset, thus ensuring its authenticity and ownership.

Overall, NFTs have emerged as a revolutionary concept in the digital space, providing a secure and transparent method of trading unique virtual goods while also enabling creators to monetize their digital content.

Developing a NFT Marketplace: Where and How to Begin?

When contemplating the development of a marketplace for NFTs, the first critical step is to determine the relevant use case for NFTs. Subsequently, one must evaluate whether a marketplace would be the optimal solution to cater to the identified use case. For instance, if the objective is to establish an ecosystem for gamers, NFTs can be leveraged to represent in-game items, points, and rewards. Similarly, if the goal is to tokenize real-world artwork and facilitate trade, NFTs can represent each artwork and be traded on a marketplace.

Identifying the use case for NFTs is crucial because it lays the foundation for building a relevant and sustainable marketplace. Additionally, it allows for tailoring the marketplace’s features and functionalities to the specific needs of the target audience. Once the use case is established, other key factors to consider in developing a marketplace for NFTs include security, usability, scalability, and interoperability with other platforms.

Estimate for Developing an NFT Marketplace: Tasks and Timings

To use NFTs effectively, understanding the intricate processes involved in building a digital marketplace for these assets is crucial. Developing an NFT platform involves designing system architecture, refining application development, rigorous platform testing, and creating effective marketing strategies. Each of these tasks has financial implications and requires careful execution to create a robust, secure, and efficacious non-fungible token exchange platform.

• Architecture Design – Architecture design is the first step in developing a marketplace for NFTs. The design should address the data model and the functionality of the marketplace. It is important to understand the functionality of the marketplace, identify any bottlenecks and make sure everything can scale as the business grows.
• Product Design – Once the architectural and data models are built, you can start designing the product. At this stage, you can focus on the user experience of the application by designing the user interfaces and flows.
• Development – Once the product design is finalized, you can start developing the application. Depending on the application, development can take anywhere between 6 weeks to 6 months.
• Testing – A significant portion of the development cost of the marketplace is spent on testing. This is because the application must be robust and secure. The testing process includes functional testing, security testing, regression testing, and many others.
• Marketing – Marketing is an important part of the development cost of a marketplace. You must have a marketing strategy to promote the marketplace as well as the NFTs.

What is included in the development cost of a marketplace?

In addition to the expenses associated with architectural and product design, there exist several ancillary undertakings that impact the development cost of a marketplace. These undertakings include, but are not limited to, hosting, domain registration, security measures, and various administrative responsibilities. Let us now undertake an exhaustive examination of each of these tasks.

• Hosting – Hosting is the storage of data that is served to users visiting your application. For example, when you visit a website, the data is stored on a server. The data is then retrieved from the server and displayed to you when you access the website. Hosting can be done on a cloud server or on a virtual private server (VPS). On a cloud server, you rent the resources as per your need and pay as you go. On a VPS, you rent a physical server and have root access. This is more cost-effective than cloud hosting, but you need to maintain the server.
• Domain Name – A domain name is the name of your application. For example, the domain name for Facebook is Facebook.com. Domain names are important because they are the primary identifier of an application or website.
• Security – Security can be achieved by a secure code, secure data storage, and secure communication channels. The application must be robust and secure against cyberattacks.
• General Admin Tasks – The general admin tasks include managing product/service offerings, managing teams, managing the project, and managing finances.

Conclusion

This article discusses the cost of developing a marketplace for NFTs in detail. Architecture design, product design, and development of the application are the major tasks involved in developing an NFT marketplace. The development cost of a marketplace includes hosting, domain name, security, general admin tasks, and marketing.