NFT
The global NFT market is expected to grow at a compound annual growth rate (CAGR) of 35.0% from USD 3.0 billion in 2022 to USD 13.6 billion by the end of 2027. OpenSea is currently the largest NFT marketplace for different types of tokens. Other well-known NFT art galleries include Nifty Gateway, Solanart, and SuperRare.
As the NFT industry expands and more people want to work in it, the numbers are also increasing. However, developing an NFT marketplace is not a simple process that requires knowledge, experience and a thorough understanding of the niche. This is why many marketplaces have failed lately – they were unwilling to start development.
This guide was created in collaboration with our technical specialists, who described the most common issues companies face when developing an NFT marketplace. This guide will help anyone considering development as you understand the issue with NFTs in 2022 and be prepared to avoid issues for a successful launch.
See our Blockchain and NFT development process
NFT transactions almost always involve high and hidden gas fees. And most newcomers are not aware of it. The majority of current NFTs are built on the Ethereum blockchain, as well as the ERC-20, ERC-721, and ERC-1155 token standards for issuing smart contracts. To be more specific, the Ethereum blockchain uses a proof of work mechanism to determine its value. This results in high gas costs, which is one of the main problems with the development of the NFT marketplace today.
Insufficient user experience
Since the industry is still in its infancy, NFT users often have to search for different crypto platforms and launchpads, and go through lengthy signup and verification processes. To create a user account on some platforms, users must also provide personal information such as their government ID (KYC), phone number, and even address.
That’s fine in terms of data security, but most NFT marketplaces don’t provide tutorials for new users. As a result, users often struggle with account creation, verification, and everything else they have to go through. This results in a poor user experience and forces people to look for better solutions.
Insufficient copyright protection
NFTs are ideal for any artist who wants to create, fully own and profit from digital art. However, the problem stems from the fact that images and other tokens can be easily duplicated and distributed across the internet without the permission of the creators. In addition, there is no legal framework or precedent in the NFT market space to verify or reinforce the true ownership of an NFT art, as well as the following copyright evidence.
Creators suffer from a lack of creativity and expression
NFT marketplaces are designed to allow artists to sell their work and express themselves in the digital space. However, the majority of them implement numerous censorship and moderation features, restricting artists’ creativity and freedom. While this may make sense for some tokens, it can ruin the entire experience for the majority of artists looking to use your NFT marketplace.
No Pay close attention to the user interface and user experience.
The abbreviation for User Interface is UI, and it’s responsible for how users interact with your marketplace. The goal of a high-quality, simple and understandable user interface is to improve and simplify the user experience (UX). This also results in the user putting in the least amount of effort to achieve the desired result.
Since most NFT marketplaces focus on more valuable things (in their opinion) such as verification, rapid development and protection, UX and UI are critical in determining whether your platform will be successful or not. No artist will want to use a boring and outdated interface that doesn’t grab attention and doesn’t make it easier for them to create tokens.
Fortunately, this problem is easily solved by assembling a professional team of designers with relevant experience. They make sure that all elements are simple and understandable so that the user’s goal can be reached quickly.
Bad customer service
As mentioned earlier, the NFT market is still in its infancy and it will take time for people to learn more about its capabilities and applications. However, some business owners fail to see the importance of helping their customers, thinking they are experts in this field. In reality, you never know what bugs or issues your customers might encounter while using your platform, and only you understand how it works.
That is why it is critical to provide 24/7 customer service that is always available and ready to collect all feedback and provide relevant solutions for every customer. Make sure your team won’t respond with simple templates, but will instead provide genuine help to those who need it at any given time.
Payment options are limited
Modern NFT markets lack a variety of payment features. Despite accepting payment through various methods including credit cards, debit cards, online banking and many wallets, they do not allow users to pay in bitcoin. However, as the market changes and people become more and more demanding of these platforms, experts believe that this problem will soon be solved.
Confusion in the industry
Yes, NFT is a trendy term. However, this does not mean that everyone understands what it is and how it generates income. This is because there is so little non-technical information about NFT that it seems extremely confusing to most people. In addition, most exciting marketplaces try to combine everything in one location, which makes it less understandable and poorly organized for newbies. Therefore, it can be difficult for people to move from one category to another, select what they want, generate tokens and manage their payments.
Cyber threats and the risks of online fraud
The massive popularity of NFT has also increased the likelihood of cyber threats for token holders. Many hackers come up with new ways to steal money from user accounts or, in some cases, tokens. Despite the fact that the NFT market is highly protected by new technological innovations and low-quality software solutions, hackers can still access the platform using three or four-step verifications.
This also occurs in large and established markets. There is also a high risk of someone impersonating an NFT maker and selling counterfeit art. This is due to the prevalence of fake NFT drops, airdrops, NFT giveaways, and replication of known NFTs.
Evaluation difficulties
This is yet another NFT marketplace problem that users and developers regularly face. Modern artists struggle to find the right price for their works, as everything depends on a wide variety of factors, such as tools used, creativity, involvement, story surrounding the collection and more.
Because the NFT market is still in its infancy, it is difficult to set a firm price for a specific type of NFT. As a result, users often don’t know how to rate their work or what criteria to use. This is why price fluctuations remain constant, making token evaluation a major challenge.
Legal Disputes
The government has no control over the NFT market. However, countries such as the United Kingdom, Japan and the European Union are developing their own approaches to legally classifying NFTs to establish regulations that may soon be implemented.
This is mainly because the market is growing rapidly and will soon become one of the largest industries in the world. As a result, the establishment of a supervisory body will become an urgent matter. In addition, because NFTs are now used in different ways and areas, the regulatory body will have to adapt to the rules and regulations of an exciting market that is constantly changing.
Smart contract risks and NFT maintenance
Finally, one of the most challenging aspects of creating an NFT marketplace is creating smart contracts and maintaining NFT. This is closely related to the threats we discussed earlier, as hackers regularly attack a Defi (Decentralized Finance) network in hopes of stealing a large number of tokens. This is due to insufficient smart contract protection and a lack of expertise on the part of the developers involved. This problem can be solved by hiring blockchain development experts.
Finally
The NFT market has expanded enormously. As a result, most companies started thinking about the most effective way to enter this space: developing the NFT marketplace. However, not everyone is aware of the problems that can arise when developing this platform. We’ve created this guide to help you understand the problem with NFTs and anticipate the challenges.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We recommend that you do your own research before investing.