The world of Non-Fungible Tokens (NFT) holds a great promise for its users: the ability to sell almost any digital creation in the form of NFT in a peer-to-peer manner. Thus, instead of seeing one’s works collect only likes on different social networks, it is now possible to give them a monetary value. To organize the meeting between supply and demand, many marketplaces have begun to emerge. An overview of the playground.
OpenSea, the new standard
In 2018, many video games have emerged thanks to the ERC-721 standard on Ethereum like Axie Infinity or Gods Unchained. To find all its assets and especially to exchange them in one place, Opensea has quickly become a must in the ecosystem.
However, while Opensea was forging an identity as a very generalist marketplace, other specialized platforms, more specifically designed for artists, appeared such as SuperRare then Known Origin and Makersplace.
It is worth mentioning that during 2019, SpiderDex, another generalist marketplace, appeared. But its functioning and management left something to be desired, so it was not adopted by the users.
Then came 2020 and the places became increasingly scarce on the three historical art marketplaces. This is one of the reasons why Rarible managed to make a place for itself by specializing in the art field and opening its doors to all artists.
“Lazy Minting” and differences in standards
While 2020 was marked by the emergence of NFTs, this year will also go down in history for the dramatic increase in transaction fees on Ethereum, thus promoting the emergence of other blockchains and Polygon-like second-layer solutions.
Opensea was already offering the possibility to create smart contracts and thus, to mine NFTs from their platform. This is for example how the game Crypto Assaut created all the assets of its game.
- Marketplace NFT ERC721: Until now, the standard of use was ERC-721, making each NFT collection unique and associated with its own smart contract. But faced with the explosion of fees, Opensea decided to use a new method to mine on its platform: lazy minting.
- Marketplace NFT ERC1155 : In concrete terms, this method allows the creator of a collection not to pay fees and to leave them to the buyer. This has naturally favored the emergence of a multitude of new collections but has also had perverse effects.
If the two standards are very different, it remains frequent that a certain confusion reigns between the ERC-721 and 1155. The first one corresponds to the standard of the “true” Non-Fungible Tokens, the second one to that of the Semi-Fungible Tokens. The ERC-1155 is regularly compared to movie tickets, which are similar to each other, although they are unique, but mostly consumable.
Think before you buy… and create
Although the lack of fees for creating a collection on Opensea may seem like an advantage at first, collectors see things very differently.
Fortunately, it is possible to import a smart contract from another platform to make sure that the semi-fungibility of a collection is not an exclusion criterion for collectors.
Indeed, the first generation of collectors is very attached to this notion of immutability and will tend to favor assets that are not likely to disappear over time.
As bull runs are generally quite short, so are periods when everything sells out immediately after being put on the market. It is therefore advisable to think before buying an NFT but also before creating them!
As a collector of collectibles, here are several questions to ask yourself, taken from the nonfungible.com best practices guide:
- How rare is each asset?
- Will it have a use?
- How is tokenomics done?
- What can we expect from the evolution of the project?
- Are multiple collections planned?
- How much am I willing to invest?
- How long am I willing to wait for a return on investment?
As an art collector, here are some others:
- What is the artist’s reputation?
- How much am I willing to pay for a piece?
- How do I contact the artist?
- Is it for the collection only or is there another interest?
- Is the artist really who he says he is?
- Does the same work exist elsewhere?
- Is the media decentralized?
These questions are fundamental to any serious buyer in the NFT space. And as a seller, it is natural to have them in mind so that the offer can properly meet a demand.
But then, which platform to choose?
Before going through the differences between the platforms, there is one thing to keep in mind: it is extremely important not to mine the same work several times on different platforms! The rarity of a creation depends on its availability, if a sale does not take on a platform, too bad. The blockchain remembers and in the long run, reputation is worth more than a few cryptos.
As said above, the transaction fees on Ethereum have resulted in the emergence of alternative solutions. It is now possible to mine on Polygon, Tezos, Solana, Immutable X, Flow, the Binance Smart Chain or Wax.
That’s a lot, isn’t it? The choice of the blockchain (and consequently, of the platform) will depend on the nature of the project to be realized. But rather than trying to compare blockchains and enter into a debate that is impossible to really decide, let’s see what the main platforms have to offer:
|SuperRare||Historical leader, brand image||Curation at the entrance, prohibitive prices, mint fees|
|Hic et Nunc||Eco-friendly, specialized in generative and programmable art||Prices too low for artists, very young|
|Atomic Hub||Eco-friendly, presence of big brands||Generalist market place|
|Opensea||Mint easy to use, several sidechains, no cost||Generalist marketplace, centralized mint|
|Immutable X||Fast, free, designed for video games||Still in alpha|
|VIV3||Eco-friendly, first marketplace on||Flow Curation at the entrance|
|Known Origin||Alternative and open culture, payment by credit card||Curation at entry, mint fees|
|Rarible||Open, easy to learn||Suspected wash trading, mint fee|
|Nifty Gateway||Payment by credit card, presence of known artists||Centralization, curation at the entrance|
Each platform has its own identity and for this reason it is important to correctly choose the platform that sticks to its own sensibility.
Another element that can be taken into account is the ability to evaluate one’s work. The average prices of NFTs sold on platforms are quite variable and unless you are already known in the ecosystem, you will have to adapt.
Conclusion: no miracle recipe
With the multiplication of marketplaces on different blockchains, it is now possible to create your first NFTs with a disconcerting simplicity. This gateway to the crypto ecosystem has greatly facilitated the reception of many new users, but we must not forget the reality that can be hidden behind it. Some artists have worked hard to get their work sold while others have a marketing team that covers them in case of a glitch. The same is true for video games or other collectible projects.
There is no magic formula in this sector: to achieve your goals, you need to do a lot of research and make a plan before you start. And above all, always keep in mind that without an invested and authentic community, the risk of failure is much greater.