Talking about the 12 elements that make up the next-generation NFT market

NFTX, Universe, Shoyu, Showtime, OpenDAO, and now LooksRare.

More and more of the NFT market is coming for OpenSea’s “lunch”, or rather market share. Frankly, as the NFT ecosystem is still very early in development, this wave may only be just beginning.

That said, I’m guessing more markets will emerge in the next few years, and this prediction got me thinking this week about what I personally think an ideal NFT market would look like.

Therefore, in this article, I propose 12 “pillars” that, if put together, can serve as an important foundation for the next generation of NFT markets.

12 Elements of a Terrific Web3 NFT Marketplace

1. Foundation = Open Source Protocol

In the spirit of openness so that anyone can use, fork or build around the market, the foundation should be an open source protocol. Current examples of such protocols include the Zora and Rarible protocols, a structure that could also lead to multiple community frontends.

2. Use an open source NFT API indexer

NFT indexers are essential for providing instant access to NFT data. However, NFT indexers of private companies are subject to the drawbacks of private companies. My ideal market would be to use open source NFT APIs such as the one currently being developed by Muse DAO and Rarible Protocol.

3. Creator-owned storefronts

Instead of emphasizing the creation of shared contracts, users are enabled to deploy their own storefronts, based on smart contracts that they themselves fully control. The DIY auction house system from Manifold Studio and Zora was the inspiration here.

4. Support cross-platform royalties

Supporting on-chain NFT royalties in all corners of the cryptoeconomy will encounter certain difficulties, at least in the early days. However, I would expect to see my hypothetical market supporting on-chain royalties to the greatest extent possible. Services like Manifold’s Royaltyregistry.xyz can be of great help here.

5. Support bulk buying, selling, listing and bidding

Early NFT platforms bound users with a common “one at a time” market style. Suffice it to say that these features will be great now that many collectors and NFT traders want the ability to operate at scale. Here, it might make sense to rely on market aggregators like Genie and Gem or NFT liquidity protocols like NFTX.

6. Flexible NFT Minting

The market should support “inert minting,” which allows creators to sell NFTs without paying transaction fees. This opens the way for people to earn cryptocurrency without having it in the first place. For example, Rarible Protocol supports lazy minting for 1/1 ERC-721 and ERC-1155 NFT versions.

7. Flexible NFT data

It would be great if this hypothetical marketplace would allow you to mint NFTs and choose where to store their data, such as on Arweave, IPFS, Filecoin, or any combination thereof.

8. Support multi-chain + L2

Give people choices. The easiest way is to support minting/NFT markets on EVM compatible chains, such as alt-L1s, L2s, and sidechains. Browser wallets like MetaMask combined with bridging protocols like Hop make it easy to move around these chains. Also, getting fiat into L2 through a service like Ramp would be amazing. The idea is to give users the ability to mint and sell their NFTs how and where they want, in an affordable way.

9. Have a Trading Area

Of course this will happen at the front-end level, but for this market it would be nice to have an NFT trading hub. This will be a barter area, perhaps even similar to a forum, where people can offer and facilitate NFT transactions. In the background, you can use things like the Sudoswap protocol and Sudoswap’s new anti-phishing code system to make transactions.

10. Thoughtful Decentralization

When it comes to devolving projects into a “community-owned” state, how best to mitigate “plutarchy” (plutarchy) remains an open question. In other words, how do we ensure that regular users remain meaningful and reward stakeholders, not just those whales who are the first to act? Projects that can come up with convincing answers here are definitely worth watching.

11. Powerful Analytics Dashboard

Currently, the leading NFT marketplaces offer statistical dashboards, but they are usually few and far between in terms of what you can search for, so they leave a lot to be desired. A huge advantage of the market front end is the availability of a dedicated statistics center with extensive search capabilities.

12. Optimized discovery and management functions

Easier said than done, but having a front-end UI that makes it really simple to find cool new NFTs and items would be a huge plus. Also, it would be great to give users the ability to broadly organize and manage their collections at the front-end level.