2021 saw the NFT market explode, with some selling for millions of dollars. According to Pymnts.com, the sales volume of the NFT market hit 2.5 billion dollars in the first six months of 2021, up from 13.7 million dollars in 2020. On comparing both values and the short duration of the growth, this is quite surprising. Moreover, this growth resulted in the diverse development of NFTs, NFT marketplaces, and the immense increase of NFT admirers.
Therefore, due to the diverse NFT marketplaces and platforms, it is crucial to clearly understand where NFTs are sold, the type of marketplaces, and the factors to consider when choosing where to buy NFT tokens.
This article takes a deep dive into the NFT market and reveals some of the best platforms where you can buy NFT Tokens.
What Exactly is an NFT?
Non-fungible tokens, or NFTs, are generally developed using the same programming as cryptocurrencies like bitcoin and Ethereum. However, this is where the similarity ends.
Fiat currency and cryptocurrencies are fungible, meaning they can be traded or exchanged for one another. Additionally, fungible assets are equal in value – a one-dollar bill can be exchanged for another dollar bill as they both hold the same value. This is also true for bitcoin.
Unlike fungible assets, NFTs cannot be traded or swapped for each other. Each NFT has a unique digital signature and properties, which makes it different from other NFTs. For instance, one Lebron James NBA top shot clip is not equal to everyday clips. One NBA top shot clip is not even necessarily similar to another clip, for that matter.
What is an NFT Marketplace?
According to Yahoo Finance, an NFT marketplace is a platform where NFTs are stored, displayed, traded, and in some cases, minted (created). These NFT platforms are to NFTs what Amazon and eBay are to products.
In order to purchase an NFT on a marketplace, you will need to have the following:
- A crypto wallet
- A certain amount of cryptocurrency coins in your wallet
- An account with the NFT marketplace
Moreover, before you make your first NFT purchase, you need to understand the categories of NFT marketplaces and the type of products they offer.
Two Main Categories of NFT Marketplaces
- Self-service Platforms
These are peer-to-peer marketplaces that allow anyone to create NFTs in a variety of formats, such as photos, GIFs, art, domain names, in-game items, and audio files, to mention a few. Self-service platforms also allow users to set whatever properties and royalty fees they wish on their NFTs. OpenSean and Rarible are the best examples of this type of marketplace.
- Curated Platforms
Curated platforms, on the other hand, only allow authorized artists to mint (create) NFT tokens. They are typically invite-only platforms that focus on high-quality products. SuperRare is an excellent example of a curated marketplace.
Factors you should consider when choosing an NFT Marketplace
Most NFT marketplaces offer similar products and features. However, there are few differences from one NFT marketplace to another. Here are some of the factors to consider when choosing the best marketplace to match your needs:
1. Payment Method
Different marketplaces offer different payment options. Some marketplaces like OpenSea allow a wide range of cryptocurrencies (150 token options on OpenSea). In contrast, others like NBA Top Shot only allow a select number of cryptocurrencies (only five available tokens on NBA Top Shot).
Additionally, some marketplaces allow a certain type of crypto wallets like Metamask, Trust Wallet, Rainbor, or Wallet connect. Most platforms accept payments in $ETH. However, platforms that don’t offer different types of crypto wallets, like HEN platform, require a template wallet to exchange Tezos $XTZ.
Consequently, you need to choose an NFT marketplace that will match your preferred payment method and type of wallet.
2. Gas Fees
According to Cyber Scrilla, gas fees are the payments that users make to compensate for the computational energy required to process transactions on a blockchain. In our case, the transfer of NFTs from one digital wallet to another.
Within the NFT market, gas fees are not just for the sellers; buyers also incur them when making a purchase. It is crucial to note that, as a buyer, you have to pay gas fees whenever you order an NFT or cancel the transaction. Moreover, actions such as making an NFT purchase with inadequate gas fees results in the cancellation of the trade and deduction of the gas fees. New buyers are usually unaware of this and end up losing a portion of their coins.
Gas fees vary slightly from marketplace to marketplace, depending on the underlying blockchain of an NFT. While some NFT transactions on blockchain platforms like ethereum are pretty expensive, other platforms like solana have cheaper gas fees.
3. Type of NFT
When choosing a marketplace, you need to take into consideration the type of NFT offered. Different platforms provide various kinds of NFTs, from sports NFTs, collectibles, art, music, photographs, in-game items, and domain names to mention a few. Therefore, it’s crucial to choose a marketplace that matches your interests.
4. Number of Traders and Trading Volume
Generally, a high number of NFT traders and trading volume means that the marketplace is liquid. This means that you can re-sell your NFT in a relatively short period. Additionally, the increased liquidity increases the value of NFTs on a marketplace, making them more profitable.
With this in mind, you might be wondering where people buy NFTS. Here is a run-through of some of the leading NFT marketplaces and what type of NFTs they showcase.
Top 10 NFT Marketplaces and what they sell
OpenSea prides itself as the original and largest peer-to-peer NFT marketplace. At the time of writing, OpenSea has a total trading volume of $7.8 billion, according to DappRadar. OpenSea offers a variety of NFTs to buyers, including domain names, art, in-game items, audio files, GIFs, and images.
The core currencies accepted on OpenSea are ETH/WETH, USDC, and DAI. What’s more, the platform accepts over 150 other payment tokens like $UNI and $WHALE. OpenSea also integrates with a variety of Crypto wallets like Metamask, Coinbase, Trust Wallet, Portis, and Arkane. The most commonly used wallets are Metamask for the browser and Coinbase for mobile. It is crucial to note that OpenSea imposes a 2.5% fee on the sale (or re-sale) of an NFT.
Like most marketplaces, OpenSea does not allow users to make purchases with fiat currencies.
CryptoPunks was one of the earliest NFT marketplaces on the ethereum blockchain. It’s a series of 10,000 randomly generated characters with a pixelated design and unique attributes. While the platform initially offered the characters for free, the only way you can get your hands on one now would be to part ways with a ludicrous amount of cash.
With some like CryptoPunk #3100 being sold for $7.58 million, CryptoPunk has a trading volume of $1.42 billion. Most trades take place on Laveral Lab’s Marketplace, the creator of CryptoPunks, but they are also listed on other marketplaces like OpenSea, Foundation, and many more. As a result, you can purchase a CryptoPunk with any coins accepted by marketplaces that list them.
To get started, create an account with Laveral Lab’s marketplace, connect your Metamask wallet, search through the available Punks and enter your bid.
3. Axie Infinity
Axie Infinity is an NFT powered video game marketplace. It’s the second-largest NFT marketplace with a trading volume of $2.23 billion. It trades exclusively in Axies: Pokémon like digital assets that you can buy and sell on Axie Infinities marketplace.
Unlike NFT art, images, or GIFs, Axies have utility – they can be used in in-game battles against other players and monsters, earning tokens that can be traded or used to breed the Axies.
To new users, Axie Infinity is a complex NFT service, and you might need to go through a couple of hurdles before you’re comfortable with the platform. To experienced players, on the other hand, Axie Infinity is such a lucrative service that some players in the Philippines and Indonesia are making a living from trading Axies.
To get started, you’ll need an ethereum wallet like Metamask and a Ronin wallet. You will also be required to buy a minimum of 3 Axies from the Axie Infinity marketplace, which may set you back several hundreds of dollars. While this may not be ideal for general buyers, it is quite lucrative to the gaming community.
4. NBA Top Shot
If you’re a basketball fan, NBA Top Shot is your ideal marketplace. With a trading volume of over $600 million, it’s the first NFT series to gain traction with the general public by trading a series of digital cards that feature NBA video highlights clips from various games.
When you buy a pack, your clips will be stored in your Dapper wallet, where you can view them or re-sell on the NBA Top Shot marketplace.
To get started, sign up for NBA Top Shot by linking your Google account, verify your details, and then join a drop on a new pack. You can choose to pay with your existing crypto wallet, a Flow wallet, credit card, or Dapper balance.
Among the diverse NFT marketplaces, SuperRare is yet another promising NFT marketplace that offers buyers one-of-a-kind, rare, unique, and limited-edition digital artwork. With a trading volume of over $130 million, SuperRare is regarded as a high-end NFT marketplace.
Unlike most NFT marketplaces, SuperRare is a curated platform that only accepts legitimate artwork. The platform is greatly praised for portraying art, culture, and collectibles in this digital sphere. The platform also works closely with artists requiring work to be approved before being listed.
If you’re interested in high-end digital artwork, then SuperRare is ideal for you. To get started, you need a crypto wallet that supports $ETH like Metamask or Formatic. Next, there are a few steps that involve providing your personal details and creating an account, after which you will connect your wallet, and you can purchase your first NFT.
Rarible is a decentralized platform that offers a wide range of digital art and collectibles. As one of the leading NFT marketplaces on ethereum, Rarible is ranked fifth with a trading volume of $221 million. Like OpenSea, Rarible offers all sorts of media from GIFs, digital artwork, images, photography, games, music, domains, and many more.
On Rarible, you can sign up using a variety of crypto wallets like Metamask, MyEtherWallet, Coinbase, or any mobile wallet using WalletConnect. Once you have signed in, you can fund your wallet and make your first NFT purchase.
Unlike common NFT marketplaces that showcase art and collectibles, Decentraland incentivizes a global network of users to operate a shared virtual world. Decentraland allows you to buy and sell Digital Real Estate while also playing games within the virtual world. It’s currently ranked tenth with a trading volume of $41 million at the time of writing.
Decentraland marketplace allows you to buy LAND – an NFT used to define the ownership of land parcels representing digital real estate. LAND is acquired through the Decentraland marketplace or third-party marketplaces like OpenSea. As a result, various crypto wallets across multiple marketplaces can be used to purchase LAND tokens.
As another leader in NFT art curation, Foundation is ranked eighth with a trading volume of $85 million. It’s a curated platform that showcases a variety of high-end digital artwork and 3D artwork.
To get started, connect your Metamask wallet or any other WalletConntect to the Foundation marketplace. The platform is relatively easy to navigate, but it’s crucial to note that the artwork is sold in timed auctions.
The recent mini-boom of solana has made it a rival NFT platform to ethereum. With collections such as SolPunks, Aurory, and the Degenerate Ape Academy on Solanart trading for hundreds of millions of dollars, the solana blockchain is likely to surpass most NFT marketplaces. This provides an excellent opportunity for early NFT collectors. Unlike OpenSea, Solanart is a curated platform with relatively limited NFTs.
To get started on Solanart, you will need a solana wallet like Phantom or Solflare. Next, load your wallet with solana from an exchange. From here, you can explore Solanart and place your bid when you find an NTF you like.
Mintable is another famous NFT marketplace that allows users to purchase artwork, music, photos, digital collectibles, and in-game assets. Unlike most NFT marketplaces, Mintable is a gasless marketplace. Being an ethereum based platform, you can only purchase NFTs with wallets that support $ETH, such as Metamask.
The recent craze around NFTs has made it a lucrative business. However, getting started might be quite intimidating to beginners. So, what should you do?
As stated above, the first step would be to have a clear goal on the type of NFT you want to purchase and the marketplace that offers the NFT. With this in mind, you can proceed to purchase NFTs that align with your interest or with your business features.
Making your first purchase of an NFT is a step into the NFT space, but understanding different marketplaces is a key factor to a successful and profitable investment.