What is NFT Marketplace? 3 best NFT marketplaces you should know

The NFT layer has been getting more attention recently, along with the rise of many NFT marketplaces. So what is NFT marketplace? How does NFT marketplace work? Let’s find out in this article

Khang Kỳ

Published Apr 15 2022

Updated Aug 29 2024

4 min read

What is NFT marketplace?

NFT marketplace is a platform where users may store, exchange, buy, and sell NFT (Non Fungible Token). Users can mint NFT on some exchanges. Users can bid, ask, or purchase an NFT at the market price on an NFT marketplace. Limit and market orders are the same on crypto exchanges (Binance, Huobi, etc.).

Classifying NFT Marketplace

There are many ways to classify NFT Marketplace:

By function: NFT Marketplace and NFT Aggregator. NFT marketplace allows trading NFT; while NFT aggregator aggregates NFT price from a lot of marketplaces and gives users the best one.
By item: Music Marketplace, Art Marketplace...
By ecosystem: Ethereum, Solana, Terra...

How does the NFT marketplace work?

Most NFT marketplaces do not require users to sign in to an account, which is required on CEXs. People interact with NFT marketplaces via Wallets (Coin98 Wallet, Metamask...).

In terms of payment, regardless of the NFT marketplace, based on the ecosystem, the ecosystem coin is used as payment. To participate in markets on Opensea and Rarible, for example, you must utilize ETH.

Payment is a compound of the funds that buyers have to pay for the artworks and network fees. The fees may be splitted into two parts: network fee, which depends on the congestion of blockchain, and the blockchain native coin’s price; and marketplace fee.

How to create an NFT on NFT marketplace

Some NFT marketplaces allow users to mint NFT, OpenSea is a great example. Since NFT is an artwork (in case of OpenSea), you must have a PNG image if you want to mint NFT.

Then, find where to upload the PNG image on the marketplace, below is an example:

After that, fill all the information required, and choose the chain on which you’d like to mint NFT.

Some notices:

Preparing the correct gas fee coins: ETH is the fee of Ethereum, not Polygon.
The minting process cannot be undone, make sure to choose the correct PNG image with the suitable quality.

3 best NFT marketplaces you should know

Opensea

The most popular NFT marketplace is Opensea, which also has the biggest market share. Users can list, purchase, and sell NFT on Opensea. NFTs based on Ethereum, Polygon, and Solana are now supported by Opensea.

Aside from its role as a marketplace, some projects use Opensea to execute airdrops dependent on user trade volume. Users that traded at least 3 ETH on OpenSea between June 16th, 2021 and December 16th, 2021, for example, are entitled for up to 10,000 LOOKS tokens.

Learn more: How to use Opensea to create, buy & sell NFT

Rarible

Like OpenSea, Rarible is an early NFT marketplace. Rarible accepts two NFT token standards: ERC-1155 and ERC-721.

The difference between OpenSea and Rarible is that Rarible has its token (RARI), which acts as the governance token. There are 25 million tokens in RARI total supply, of which 60% for rewarding users, 10% for airdrop, and the rest are for the team and investors.

Magic Eden

Although born in 2021, Magic Eden quickly became the best NFT marketplace on Solana. With a solid UI, Magic Eden is very easy to use.

Beside buying and selling NFT, Magic Eden also has other features like Launchpad, where NFT projects can raise funds via Public Sale; or Stats, where we can track many statistics of Magic Eden.

NFT Marketplace's development

Previously, only NFT buying and selling was available on Opensea or Rarible. This is the most basic form of any commerce.

Due to numerous changes in the crypto world, fundraising is no longer based on CEXs (IEO) or ICO. Launchpad is a fantastic concept that gives birth to IDO. This is true not only for tokens, but also for NFTs. As a result, certain NFT marketplaces, such as Magic Eden, feature a launchpad for NFT projects to kickstart.

Then, with the launch of GameFi, the NFT marketplace became the only avenue for gamers to trade NFT. As a result, gaming projects started developing built-in NFT marketplaces, which they utilize to exchange for NFTs in their own game, in order to capture additional value.

In terms of items, in addition to arts, NFT marketplaces now support music, allowing customers to listen to a sample.

In general, NFT marketplace development expresses itself by combining many functions into a single UI or by supporting a variety of items.

How to invest in NFT marketplace

Overall, NFT marketplaces have the same ways to invest in like other crypto projects.

Trying the product

In fact, there are many NFT marketplaces that have yet to announce a token or token release plan. As a result, if the marketplace offers an airdrop, you can try to use it to earn some.

So, how can you take advantage of the NFT marketplace?

Just make a list of arts and then go out and buy some. You can list with one wallet and then buy with another. To increase the trading volume, repeat the process.
Another suggestion is to test on Ethereum rather than other chains. Some people are concerned about Ethereum's hefty fees; nevertheless, airdrops for Opensea users have only been for Ethereum users so far.

Investing in the token

We can consider the price to buy and hold or trade if the platform has a token. NFT marketplace tokens such as LOOKS (LooksRare) and RARI (Rarible) can be purchased on several CEXs and DEXs. Coin98 Wallet is a good option for trading and storing your coins.

So, what are the characteristics that we need to pay attention to in order to invest? You can examine the trading volume, platform income, and so on.