NFT marketplaces are those platforms where you can buy as well as sell NFTs. These marketplaces are created to host primary sales as well as secondary which are peer to peer sales.
We have created this guide because often users feel confused between different types of marketplaces. Our guide is aimed at helping them get a good buying experience.
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What do I need to Buy and Sell NFTs on a Marketplace?
To engage in buying and selling NFTs (Non-Fungible Tokens) on a marketplace, you’ll need a basic understanding of NFTs, a non-custodial wallet, and some funds. Here’s a quick overview of each requirement:
- Knowledge of NFTs: Understanding what NFTs are, how they work, and their value in the digital and art world is crucial. NFTs represent ownership or proof of authenticity of a unique item or piece of content, stored on a blockchain. Full guide is present on CYAN Articles.
- A Non-Custodial Wallet: This is a digital wallet where you have control over your private keys, unlike custodial wallets managed by third-party services. It’s essential for interacting with blockchain applications and managing your digital assets securely. Some examples are:
- Some Funds or NFTs: You’ll need cryptocurrency, typically Ethereum (ETH) for most NFT marketplaces, to purchase NFTs. Additionally, you’ll need enough to cover transaction fees, also known as gas fees, which can vary based on network congestion. If you are selling NFTs, you need to have them on your wallet before listing one to sell.
Types of NFT Marketplaces
1. Curated NFT Marketplaces
Curated NFT marketplaces are where very specific artists and collections are curated and are available for purchase. As a buyer, you are relatively safe from buying any fakes, spam, or nefarious collections, though, appraisal and value are not guaranteed.
Why should you use a curated NFT marketplace?
As a buyer, the benefit of using a curated NFT marketplace is knowing that a team of professionals have carefully vetted artists and teams who make the collections, to ensure the work meets a certain standard across the board.
Examples of Curated NFT Marketplaces
The most popular marketplaces are Foundation, NiftyGateway, and SuperRare. Cyan is a hybrid as collections are curated based on price stability and longevity, but is not choosy in terms of artwork or artist as the selection process is data-driven.
Well-known curated NFT Artists
Some famous NFT artists include Beelpe, Jack Butcher, Pak, and Tyler Hobbs. Well-known and sought-after collections are Chromie Squiggle by Snowfro, Autoglyphs, Ghxsts, and Fidenzas. Art collections supported on Cyan are also a good guide, which can be found here in the Cyan Art Vault. Before making a purchase, always be sure you are buying authentic pieces by verifying the contract they are living on. Trust, but verify!
2. Non-Curated NFT Marketplaces
Non-curated NFT marketplaces are websites where any type of NFT is available for purchase. Contrary to curated NFT marketplaces, non-curated means the teams are not as choosy in which collections they allow to be sold on their marketplace. This allows for a wider variety of NFT types to be listed by sellers.
Why should I care if a marketplace is non-curated?
While it is not a demerit if a marketplace is non-curated, it is worth knowing that collections on the website may not be properly vetted by a team. Thus, counterfeits, meme collections, and experiments run rampant if not put in check. There are examples of collections where the artwork is simply flipped, such as rrBAYC, and the team behind the collection losing in court to counterfeit claims by the original collection, in this case, Bored Ape Yacht Club (BAYC).
What are some examples of non-curated NFT marketplaces?
The most popular non-curated marketplaces are OpenSea, Blur, LooksRare and Rarible. There are many others as well, including X2Y2 and decentralized versions such as Sudoswap. Outside of Sudoswap, there are no major differences between all of these marketplaces as they fundamentally do the same function of providing a centralized place to buy and sell NFTs.
Some Common and Well-known Non-Curated Collections
The most famous (or infamous!) collection is the Bored Ape Yacht Club, which has managed to penetrate the general public for better or worse. In general, all collections under the Yuga Labs umbrella are popular, which include CryptoPunks, Meebits, and Otherside. Other popular collections are CloneX, DeGods, Pudgy Penguins, and Captainz. All these collections are available on Cyan for Buy Now, Pay Later purchases!
3. Mass NFT Marketplaces
Mass NFT marketplaces can be considered to be the most popular NFT marketplaces preferred by most users.
Benefits of a Mass NFT Marketplace
The largest benefit is the amount of liquidity you can access. Marketplaces survive on volume, as this is a sign both buyers and sellers can freely participate in a healthy market from both sides. As a potential buyer, it is preferred to have lots of different NFTs to purchase from one collection as it offers a diverse selection. As a potential seller of an NFT, having constant interest from buyers means you have a better chance of liquidating faster and at prices close to expectations and fair prices.
Examples of Mass NFT Marketplaces
Blur and OpenSea are currently the go-to mass NFT marketplaces. Blur roughly has 70-75% of the share of volume across all marketplaces, while OpenSea comes in second with 15-20% on any given day. Most casual users visit OpenSea, while higher frequency traders will utilize Blur for its superior execution platform and $BLUR farming rewards.
4. Niche NFT Marketplaces
These marketplaces may not fit a particular mold to the above-described marketplaces. They may cater to a specific collection, be an aggregation service, or perhaps focus on decentralization.
Why do niche NFT marketplaces exist?
There is a myriad of reasons, but one of the biggest ones is collection royalties. Blur is a marketplace that cropped up in late 2022, during a period in which many marketplaces contemplated enforcing collection royalties. Collection royalties are considered important, as it is how a project can collect revenues beyond the initial sale of NFTs. Blur’s marketplace ignored royalties for the most part or reduced them considerably to the point they became negligible. This was seen as beneficial to traders, as there is less friction cost, but for projects building communities, it was a blow to their major source of revenue.
Some collections also have dedicated marketplaces, such as the Pudgy Penguin Marketplace to enforce royalties. It is specifically set up for just assets within the Pudgy Penguin ecosystem, including Lil’ Pudgys and Pudgy Rods.
Other reasons for niche NFT marketplaces lie in the features offered. For example, Sudoswap is a decentralized NFT marketplace. While liquidity is still on the lower end, the benefit is an unstoppable NFT marketplace that is powered by decentralized finance mechanics.
Another example of a niche NFT marketplace is Cyan, which has a strong feature to differentiate itself from others with Buy Now, Pay Later. Users can purchase NFTs without the full amount upfront, which becomes beneficial for NFTs which has utility beyond price appreciation. One can place a downpayment to start playing a game today, and after a few months, pay off the asset that has accrued value through gaming activities. The Cyan Wallet is a unique feature not seen anywhere else, which gives the user full access to the NFT during loan periods.
What are some examples of niche NFT marketplaces?
Sudoswap, Flooring Protocol, Pudgy Penguin Marketplace, Sandbox Marketplace, and Cyan are good examples of niche NFT marketplaces.