NFT Art Marketplaces: A Beginners Guide
NFT marketplaces brings back 6.39 million results when searched for on Google. This means that you are not alone in looking for the best NFT marketplaces for 2022.
You continue to come across news of people buying digital cats, apes, in-game designs, and digital art for millions of dollars. It usually surprises you, since art pieces were typically purchased at auctions from well-known galleries across the globe. You may have asked countless times where people keep getting these digital collectibles. Do not worry, Moni Talks has got you covered when it comes to the best NFT marketplaces to buy digital arts that suit your investment preferences.
Since the second half of 2020, non-fungible tokens (NFTs) have sailed on. Many traditional investors, and cryptocurrency holders, are doing everything in their capacity to own and speculate on these blockchain-based assets that are verifiable, indestructible, indivisible, and non-interoperable.
NFTs are digital tokens representing ownership of an asset that is scarce, whether a digital or physical item. Some of these items include real estate, in-game items, collectibles, soundtrack, and artwork.
Unlike cryptocurrencies such as Bitcoin (BTC), ApeCoin (APE), and Ether (ETH), or fiat currencies such as the United States Dollar (USD), Euro, and the Great Britain Pound (GBP), these tokens cannot be exchanged for another.
This is because they come with unique attributes and traits that can be verified but do not have the divisibility of cryptocurrencies or fiat money.
Moreover, unlike digital assets, NFTs cannot be bought on exchanges (centralised and decentralised). Instead, you can find them on specially built online marketplaces.
What are NFT Marketplaces?
NFT Marketplaces are platforms where digital collectibles can be displayed, stored, traded, and minted in some cases. These marketplaces are to NFTs what exchanges are to cryptocurrencies and e-commerce websites such as Amazon and eBay are to goods and services.
To be eligible to partake in the activities of these marketplaces, you need to meet the following requirements.
Firstly, you must have a crypto wallet. There are several crypto wallets out there. You should also note that there are several NFT blockchains in the market, as of May 2022. Therefore, the onus falls on you to find a wallet that can access the blockchain network of the NFTs you wish to purchase.
A great example can be attributed to planning to buy or sell NFTs on the blockchain technology of Ethereum. You'll need a wallet like MetaMask since it facilitates access to the Ethereum Network. In the same way, should you choose to buy or sell NFTs on other blockchains, you need to find wallets that grant access to those networks.
Secondly, you must have a certain amount of coins in the wallet. You cannot buy cryptocurrencies without fiat or other coins as deposits. In line with the same requirements, you need to deposit coins in your wallet before you can buy, sell, or mint a non-fungible token. More importantly, you will have to check the kind of cryptocurrencies supported by your preferred NFT marketplace before settling on a particular platform.
Lastly, you need to create an account. If you want to buy cryptocurrencies, you must create an account on exchanges that support a particular token. Inferring from the same activities you perform in the crypto space, you need to register for an account on the NFT marketplace of your preference.
In the crypto finance space, you can never do away with fees.
The same holds for listing and creating NFTs. You have to pay a blockchain network fee. There is a not a one-size-fits-all approach and, as a result, you should know your fee is dependent on the blockchain you use for your NFTs. Ethereum has the lion's share of NFT dApps, but it has relatively higher fees than other NFT blockchains.
What are some of the NFT Blockchain Options?
Ethereum is the most popular blockchain for decentralized finance (DeFi). Vitalik Buterin’s innovation has the largest blockchain by NFT sales volume. As of May 3, 2022, the total NFT sales volume generated by Ethereum was around $24.99 billion, per data retrieved from CryptoSlam.
This makes Ethereum the most popular chain to buy, sell, and create unique digital collectibles.
Aside from Ethereum, competing NFT blockchains include but are not limited to; Solana, TRON, Polygon, Flow (by Dapper Labs), Polkadot, Algorand, Avalanche, Ronin, BSC, WAX, EOS, Cosmos, Hedera Hashgraph, Cronos, Palm, Arbitrum, Panini, Tezos, Waves, and Fantom.
Interoperability is the hallmark of most of these blockchain systems. For example, you can use ERC20 tokens (Ethereum-based tokens) such as the United States Dollar Tether (USDT), the United States Dollar Coin (USDC), and Binance Coin (BNB), DAI, and others to buy Ethereum-based-non-fungible tokens.
On the other hand, blockchains such as Flow are not interoperable. You can only buy NBA TopShot NFTs with the native asset of the Flow ecosystem, FLOW.
How Do These Marketplaces Work?
Register for an Account
Although there are slight differences when signing up for an account on an NFT marketplace, the main steps are similar.
It involves creating an account and connecting a supported wallet address to your preferred NFT marketplace.
Usually, you can find the "sign up" button at the top right-hand side of the homepage of an NFT marketplace.
Since you know the importance of holding onto your private keys and your passwords, you will be asked to input secret details of your wallet. Once done, your account will be fully set up.
Buying a Non-Fungible Token
There are several ways of buying an NFT. You can buy a digital collectible directly at a fixed price. What's more, you can buy an NFT through an auction. In some instances, owners of an NFT are open to negotiating the price of their digital collectibles.
Selling a Non-Fungible Token
Selling unique collectibles is more complicated than buying them. Selling NFTs is easy if you are reselling previously purchased items. Unfortunately, if you are selling something you have created, you need to go through a lengthy process.
• Firstly, you have to upload an image of the digital art, tweet, or soundtrack onto your preferred NFT marketplace. Then you enter a fixed price for the NFT or entice buyers to battle for the piece through an action. • Secondly, verification of the NFT is done by the platform. If this is approved, the digital collectible will be listed for sale. • Lastly, once a seller accepts a bid for the NFT, the marketplace oversees the completion of the item's transfer from the buyer to the seller.
Minting a Non-Fungible Token
Ethereum is the best place to start if you are considering minting NFTs. You'll need an Ethereum wallet like Coinbase Wallet, TrustWallet, or MetaMask that supports Ethereum's token standard for NFTs.
Minting NFTs come at a cost. Therefore, you should have at least $50 in your wallet to cover Ethereum gas fees. Once you have this, you can access NFT Marketplaces such as Mintable, Rarible, or OpenSea. A "Create Button" is typically found on the top right corner of most platforms.
Once you click on that button, you will be taken to a page where you can begin minting NFTs.
What are some of the best NFT Marketplaces?
There are several types of NFT marketplaces. Art-oriented and universal platforms dominate this market. Others, such as niche NFT marketplaces that list virtual real estate, digital collectible cards, and in-game items, are also preferred by millions of people.
Let us look at five of the most popular NFT marketplaces in addition to other honorable mentions.
• OpenSea: • Launched on December 20, 2017, OpenSea is an online p2p marketplace where NFTs in the form of digital arts, in-game items, and other products can be bought and sold. As one of the most established universal NFT marketplaces, you can find domain names, virtual worlds, sports collectibles, and trading cards. It is the largest NFT marketplace by trading volume. • LooksRare: • Launched in January 2022, LooksRare has given strong competition to OpenSea. When you consider data from Dune Analytics, this NFT marketplace recorded more than $800 million in a single week in April. Having spent four months as a platform for buying and selling NFTs, Otherdeed, Bored Ape Yacht Club, and Mutant Ape Yacht Club are the top collections on Looksrare. • Foundation: • Founded in February 2021, Foundation has become the go-to NFT marketplace for several creators. This is the playground for collectors, curators, and artists to experience the new way of buying, selling, and minting digital collectibles. Some of the top-selling Foundation (FND) NFTs include Carpoolers, At World’s End, Lucid Journey, Faced Fears, and Arrived. • Rarible: • Launched in 2020, Rarible is one of the most patronized NFT marketplaces in the crypto stratosphere today. Data retrieved from Dune Analytics shows that Rarible trails only OpenSea, LooksRare, and Larva Labs in weekly volume. It is an NFT marketplace where millions of people create, sell, and collect digital items. It is one of the few NFT marketplaces controlled by community members through their ownership of RARI tokens. Some of the top collections include but are not limited to CyberBrokers, CloneX, Mutant Ape Yacht Club, Bored Ape Yacht Club, Invisible Friends, Dippies, Azuki, and Dour Darcels. • Nifty Gateway: • Founded in 2018, Nifty Gateway is one of the largest NFT marketplaces. This platform holds the record for the most expensive digital collection ever sold. For $69 million, Beeple sold its collection labeled Everydays: The First 5000 Days. Beeple also sold Crossroad for $6.6 million on this platform. Other best-selling digital collectibles include Tpunks and CryptoPunks.
NFT Marketplaces: Honorable Mentions
Although the NFT marketplaces already mentioned are some of the best platforms to buy digital collectibles, they are not the only ones. Others, such as SuperRare, Larva Labs, GameStop, NFT Launchpad, Crypto.com, DraftKings, and WAX, have great collections.
What are some of the best NFT art collections?
Once you settle on the best NFT marketplace that can oversee your activities, you have to find an NFT collection to invest in. Although there are hundreds of collections in the market today, Moni Talks would like to draw your attention to the top five NFT collectibles by all-time sales volume.
• Axie Infinity: • This NFT marketplace hosts in-game characters from the play-to-earn game called Axie Infinity. On the platform, players earn rewards by breeding, battling, and trading digital pets called Axies. Axie Infinity’s game has become a source of passive income for millions of people. As of May 2022, Axie Infinity has surpassed more than $4 billion in sales volume. • CryptoPunks: • This is a collection of 10,000 unique punks. Each CryptoPunk is different and can be officially owned by a single person. It is one of the highest-selling digital collectibles. Overall, CryptoPunks has surpassed more than $2 billion in sales volume. • Bored Ape Yacht Club: • Mirroring CryptoPunks and other projects that came before it, BAYC comprises 10,000 unique bored apes. They come in the same template but have different accessories. BAYC is the third-highest selling NFT collectible with more than $2 billion in sales. • Mutant Ape Yacht Club: • Mutant Ape Yacht Club (MAYC) is the sister project of BAYC. As of the most patronized digital collectibles, it is the fourth-highest selling NFT with more than $1 billion in sales volume. • Art Blocks: • As a unique platform, this project helps you pick a theme or style you like and make payments. Then, a random generation version of your selected style will be created by an Art Block algorithm which will be forwarded to your Ethereum account. Millions of people have taken advantage of this technology. As of writing, Art Blocks as an NFT collection had more than $1.2 billion in sales.
Others deserving of honorable mentions include NBA Top Shot, Azuki, The Sandbox, Meebits, World of Women, Decentraland, Valuables, and Sorare.
Author: Raphael Darkwah
Raphael Darkwah/ Albert Zuhnden (preferred pen name) is a crypto finance expert who has covered several projects since taking a stake in Bitcoin in 2016. He has covered NFTs, decentralized finance, decentralized cloud storage networks, stablecoins, and several blockchain projects. He believes blockchain technology could revolutionize the world of work and money.