Bankless: 13 Elements an Ideal Web3 NFT Marketplace Needs to Have
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Bankless: 13 Elements an Ideal Web3 NFT Marketplace Needs to Have
An increasing number of NFT marketplaces are capturing OpenSea's market share. Since the NFT ecosystem is still in its early stages, this wave may have only just begun.
Navigating Web3 tides with focused insights
Author: William M. Peaster
Translation: Alex, TechFlow
NFTX, Universe, Shoyu, Showtime, OpenDAO — and now Looksrare — an increasing number of NFT marketplaces are taking a bite out of OpenSea’s lunch, so to speak, or rather, its market share. Frankly, given that the NFT ecosystem is still in its early stages, this wave may have only just begun.
That said, I suspect many more marketplaces will emerge in the coming years — a prediction that prompted me this week to reflect on what I believe an ideal NFT marketplace should look like.
So in this article, I present 13 “pillars” that, if combined, could form the foundation for the next generation of NFT marketplaces.
1) Foundation = Open-Source Protocol
In the spirit of openness, anyone should be able to use, fork, or build around the marketplace — hence its foundation should be an open-source protocol. Current examples of such protocols include Zora and the Rarible Protocol.
2) Use Open-Source NFT API Indexers
NFT indexers are crucial for providing dynamic access to NFT data. However, private company-run NFT indexers are subject to corporate pitfalls. My ideal marketplace would rely on open-source NFT APIs, such as those currently being developed by Muse DAO and the Rarible Protocol.
3) Creators Own Their "Online Store"
Instead of emphasizing mints on shared contracts, support users deploying their own "online stores" based on smart contracts they fully control. Manifold Studio and Zora’s DIY auction system serve as inspiration here.
4) Support Cross-Platform Royalties
I understand there are certain challenges with enforcing on-chain NFT royalties across every corner and crevice of the crypto economy, at least in the early days. Nevertheless, I’d like to see my hypothetical marketplace focus on maximizing support for on-chain royalties. Services like Manifold’s Royaltyregistry.xyz can be highly helpful in this regard.
5) Support Bulk Buying, Selling, Listing, and Bidding
Early NFT platforms hindered users with their generally “one-at-a-time” marketplace approach. Needless to say, many collectors and NFT traders today want the ability to perform bulk operations, so these features would be excellent. Here, leveraging marketplace aggregators like Genie and Gem, or NFT liquidity protocols like NFTX, could make sense.
6) Flexible NFT Minting
The marketplace should support “lazy minting,” allowing creators to list NFTs for sale without paying gas fees upfront. This opens the door for people to earn cryptocurrency even when starting from nothing. For example, the Rarible Protocol supports lazy minting for both 1/1 ERC-721 and ERC-1155 NFTs.
7) Flexible NFT Data Storage
It would be great if this hypothetical marketplace allowed you to mint NFTs while choosing where their data is stored — for instance, on Arweave, IPFS, Filecoin, or any combination thereof.
8) Support for Multi-Chain + L2s
Give people choices. The easiest way is to support minting and NFT markets on EVM-compatible chains, including alternative Layer 1s, Layer 2s, and sidechains. Browser wallets like MetaMask, combined with bridging protocols like Hop, make moving across these chains seamless. Additionally, having fiat on-ramps to L2s via services like Ramp would be fantastic. The idea is to let users mint and sell their NFTs affordably, wherever and however they prefer.
9) A Trading Zone
Of course, this would exist at the frontend level, but it would be great for this marketplace to feature an NFT trading hub — a barter zone, perhaps even forum-like, where people can propose and facilitate NFT trades. In the backend, tools like the Sudoswap protocol and Sudoswap’s new anti-phishing code system could power these transactions.
10) Thoughtful Decentralization
How best to mitigate greed when decentralizing a project into a “community-owned” state remains an open question. In other words, how do we ensure ordinary users remain meaningful and rewarded stakeholders, rather than merely the earliest whales? Projects that can convincingly answer this will certainly be worth watching.
11) Powerful Analytics Dashboard
Today’s leading NFT marketplaces offer analytics dashboards, but they’re often limited in terms of search capabilities — leaving much to be desired. A major advantage for a marketplace frontend would be offering a dedicated statistics center with extensive search functionality.
12) Optimized Discovery and Management Features
Easier said than done, but having a frontend UI that makes it easy to discover cool new NFTs and projects would be a huge plus. It would also be great to allow users to broadly manage their collections directly within the frontend interface.
13) Bonus: AI + DAO for Anti-Plagiarism
Perhaps a dedicated AI system working alongside a specialized DAO guild could collaborate to tackle the serious issue of art plagiarism on this marketplace’s frontend. I emphasize the frontend because minting on underlying contracts is permissionless, so suppressing theft at the UI layer would be the most practical approach. I personally have many questions about exactly how this would work, but it would be fascinating to see a DAO guild succeed where other NFT platforms have so far struggled!
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