The non-fungible token (NFT) market is thriving in 2023. This quarter alone, the global NFT market has seen over $2B in trading volumes and a surge in active users.
Are you looking to buy or sell NFTs but need help figuring out how to start? Our step-by-step guide will help you navigate the process on an NFT marketplace.
What is an Non-Fungible token (NFT)?
Non-fungible tokens (NFTs) are assets that have been tokenized via a blockchain. They are assigned unique identification codes and metadata that distinguish them from other tokens. NFTs can be traded and exchanged for money, cryptocurrencies, or other NFTs—it all depends on the value the market and owners have placed on them.
Cryptocurrencies are tokens as well; however, the key difference is that two cryptocurrencies from the same blockchain are interchangeable—they are fungible. Two NFTs from the same blockchain can look identical, but they are not interchangeable.
What is an NFT Marketplace?
An NFT marketplace is a digital platform where anyone can buy and sell NFTs. NFT marketplaces can be decentralized or centralized.
Decentralized NFT marketplaces are the most common, allowing users to connect with web3 wallets, trade, and disconnect at will. Decentralized marketplaces give users complete control of their accounts and NFTs.
On the other hand, centralized NFT marketplaces hold customers' accounts and typically require them to perform a KYC verification before enabling them to trade.
A Look at a Typical NFT Marketplace
While NFT marketplaces may differ in their user interface and experience, the following features cut across platforms:
1. Explore: the explore page usually forms the homepage or dashboard of any marketplace and features every available NFT. The assets are typically grouped by type– art, gaming, photography, influencer NFTs and can be filtered through metrics such as price, date added, upvotes, etc.
2. Collections: here, you can find art collections and explore several kinds of NFTs a single user provides. For example, the popular Bored Ape Yacht Club collection created by Yuga labs comprises 10,000 unique ape-themed NFTs. Also, the launchpad campaign created on AirNFTs features 9000 unique NFTs with over 4000 owners.
3. Hot Auctions: NFT auctions work similarly to traditional auctions. On the auctions page, sellers list their NFTs for a specific timeframe for buyers to place bids.
4. User Profile or Wallet page: Your profile page displays your NFT, crypto balance, and other details.
What to Look Out For in an NFT Marketplace
There are over a hundred NFT marketplaces across several blockchain networks, and choosing one well-suited to your taste can be challenging. Here are four key things you should look at before making your choice:
- The underlying blockchain: Blockchain networks power NFT marketplaces, and the most popular ones are Ethereum (ETH), Polygon (MATIC), Solana (SOL), Fantom (FTM), and Binance Smart Chain (BSC). While these networks have their share of the NFT market, Ethereum-based networks carry the highest share in the number of active users.
- Service Fees: this is a fixed cost for NFT sales. Service fees are usually a percentage of the NFT price, and they could be as high as 5% on some NFT marketplaces.
- Gas Fee: this is the fee you pay for your transaction. It's typically denominated in the native utility token of the network you're transacting on. For example, to trade on Opensea, the biggest marketplace on Ethereum– you need to pay some ETH to allow your transaction to go through. Ethereum-based networks are known for their high gas fees and occasional network clogging.
- Extra Perks: Some NFT marketplaces reward users for buying and selling NFTs on their platforms. AirNFTs, for example, allow users to earn crypto on any NFT purchase or sale.
Buying and Selling on an NFT Marketplace: The Three C's
Before buying or selling on any marketplace, you need a starter pack–the three C's.
- Choose a marketplace: NFT marketplaces are where it's all happening, but many have varying features, as mentioned earlier. You need to make your choice.
- Create a wallet and add funds: to interact with a decentralized marketplace, you must create a web 3.0 wallet and deposit funds. The funds to deposit in your wallet will depend on the blockchain platform you want to trade on— for example, Ethereum-based networks will require ETH, while Fantom-native platforms will require FTM for transactions. You can deposit funds via credit card or exchange them for USDT on a centralized exchange. Note that for centralized marketplaces like Binance, you need only create your account and verify your identity to start trading on their platform.
- Connect your wallet to the marketplace: the last C is to connect your wallet to your chosen NFT marketplace. For example, to connect your Trust Wallet to a marketplace like AirNFTs, enter the correct URL on your browser, search for the profile or wallet section, and select your wallet.
Now, you're ready to make your first purchase or sale.
Step-by-step Guide on How to Buy and Sell
Now that you have connected your funded wallet to a marketplace, let's go through the NFT buying and selling process using AirNFTs as an example.
1. Go through the Explore page and select your choice of NFT. For a cross-chain NFT marketplace like AirNFTs, you can filter based on the blockchain you want— Ethereum, Polygon, Fantom, and Binance Smart Chain. You can also search for a particular artist name, creator, or collection.
2. Click on the NFT and check its metadata, history, and owner to validate its authenticity.
3. After verifying the asset's authenticity, click on buy and approve the transaction on your wallet.
And that's it! You have just bought your first NFT. You will find your newly purchased NFT sitting comfortably on your profile page.
NOTE: Another way to buy NFTs is by auction. Keep an eye on the auctions page and make bids for items on sale. Sales here usually have a specific time frame, and the NFT on auction goes to the highest bidder at the end of the sale.
You can sell either NFTs you created or bought from another user. Here's how to sell:
1. Go to your profile and select the NFT you want to sell.
2. Choose the type of sale– fixed costs or auctions
3. Input your price and complete the listing.
Congrats! Your NFT is on the market, waiting for a potential buyer to snatch it from you.
Note that there’s a service fee for NFT sales on marketplaces. AirNFTs charges 2.5%.
Trade NFTs and Earn Crypto with AirNFTs
AirNFTs makes buying, selling, and creating NFTs on a marketplace incredibly easy. With transactions costing less than a dollar, you can start making money on primary and secondary sales, while also earning passive income on the side.
Visit our NFT marketplace to start monetizing your digital assets now!