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The Cost of Building NFT Marketplace

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How Much Does It Cost to Create an NFT Marketplace?

The Cost of Building NFT Marketplace

November 10, 2022
, by 
Mateusz Raczyński

Minting an NFT is quite straightforward if you just want to turn art or anything into a Non-fungible Token. You can simply go to OpenSea or Magic Eden and mint jpegs as NFTs, so why would anyone build any new NFT marketplace rather than using the existing ones? To offer a better, more consistent and engaging experience for users.

If you’re issuing a new collection or an NFT brand experience, having control over the whole experience is what could make it or break it. This likely leads you to explore ways of launching your own NFT marketplace that would be specific to the project. 

That comes at an additional cost, but what is it exactly? What is needed to set up a marketplace and how long does it take to build it? 

Let’s take a closer look.

What Do You Need to Create an NFT Marketplace?

Each project has its own characteristics, but from the technical perspective, the key requirements are more or less similar–although some extensive customizations might take longer to deliver which always translates to additional costs.

It starts with the idea and design, but that’s the reason why you’re considering building a custom NFT marketplace in the first place. If you need help with shaping it to production-ready stages, feel free to reach out and organize a discovery workshop with our project managers and product designers.

So, what’s next?

Platform features and requirements

We could have another revenue stream if we were paid each time we receive an inquiry about ‘creating a copy of OpenSea’. When building a new NFT marketplace, it is important to think about the required features, technical requirements–if you have them–and to get what you need, you need to be specific.

The problem is that as with any other software development project, having not clearly defined features & requirements is a straight way to misunderstandings. This is why, while getting ready to the development phase, you need to think about the experience you’d like to create and work backwards to what features of the platform are critical. The more detailed you can get, the better, but even a rough features list is something to start with.

Among the most popular NFT marketplace features, there are:

  • primary market (mint & buy)
  • secondary market (buy & sell between users)
  • royalties model
  • platform fees model
  • certain wallet supports (hot, cold, hardware, multisig, custody, etc.)
  • media type
  • minting process (available to admin, all users, some mix)
  • analytics dashboards
  • trade history
  • AML/KYC integrations
  • buying options (tokens, fiat)
  • and many more

Based on the list we have created in this step, we can move to the next step.

Platform type

When building a new product with well-defined core features such as an NFT Marketplace, you have several options to choose from, each comes at a slightly different cost, time-to-launch, and available set of features.

Your options are:

  • Open source code
  • White label NFT marketplace
  • SaaS solution
  • Custom development

Each comes with their own characteristics which we’ll cover in the next section.

The Real Cost of Building an NFT Marketplace

Choosing one of the available development options is what will heavily influence the cost, along with your requirements. For most cases and NFT marketplaces, the cost is directly linked to hourly rates of the development team and licensing. 

The problem with direct comparison of different options lies within the hourly rates for set up. If you are a developer or have development resources in-house, you’d only look for the cost of licensing–although you still have to pay your teams and if they need to research the project longer, the overall cost will increase, too. By this standards, the more DIY the platform, the less expensive it would be to launch it–with the resources. The more custom, lengthy work, the more expensive it can get. 

Hence, for the comparison, let’s assume that you’re setting up the NFT marketplace with the same dedicated team, with a standard, flat hourly fee. Here are the pros and cons of different marketplace solutions and an estimate of how much would they cost to build.

Open-source Code

Since crypto is an open-source community (mostly), you could rightly assume that there are some open source solutions already available. For example, we’ve built OpenNFT on Algorand–you can go to the GitHub and set it up on your own straightaway. There were over 76 forks already.

The case is – code is not enough. You still need to make all the customizations, set up the servers/cloud and other prerequisites, launch it on testnet or mainnet, etc. Not to mention that if the feature you require is not available, you need to add it.

Open-source marketplaces come with some documentation, but that often doesn’t cover all the aspects and there’s no guaranteed support. You can send the creators some questions if you need it, but they’re not offering the code as a service, hence they are not obliged to answer you–that’s only their good will which might be risky if you’re tight on deadlines.

The best idea is to research the solution well before you make the decision and verify the documentation and eventual support. For example, one of the first project-specific NFT marketplaces on Algorand has been created with our open-source OpenNFT. The founders only needed a few short consultations.

Pros:

  • pre-made solution
  • mostly faster time-to-market than custom solutions
  • often well-tested & checked for security
  • free to use and customize

Cons:

  • require additional development resources
  • no support standards
  • could be limited in functionalities

White Label NFT Marketplace

There are several white label NFT Marketplace options available for multiple blockchains–although Ethereum, Polygon, Flow, and Solana are the most popular today.

The idea behind white labelling is to offer a solution that can be easily launched as a branded product. With NFT Marketplaces, that means you could get the basic functionality and interface design out of the box. For the most basic use, you can change colors, logos, and fonts to go along your brand guidelines and you’re ready to go.

There seem to be two approaches to this. Either you can buy a white label solution and customize it on your end or go to a software development company that has its own white label solution but offers it as part of the deal. What you’re getting is a highly customizable marketplace with the development resources to launch it. The benefit is that it can be launched quickly and has the major parts already tested.

Still, extensive customizations will require another round of tests and setting the marketplace on your instance takes almost as much time as setting up the working demo. WIth OpenNFT, everything is working on our live testnet demo, but the mentioned additional work requires about a month of further development – even if you intend to launch it as-is.

When researching white label marketplaces, you should still look at the features and pick the one that’s closest to your requirements, knowing that you can request adding additional functionality.

The hourly rates might differ between companies, but 160 hours for 2-5 people is a reasonable estimate. The brackets are wide as this approach can cost anywhere from $10,000 to $25,000 for the basic marketplace and double or triple with major customization.

Pros:

  • pre-made
  • fast time-to-market
  • endless customization possibilities
  • often comes up with set-up service
  • a large chunk of the work is already done

Cons:

  • Far-reaching customization takes almost the same amount of time as with custom development
  • They often don’t work off-the-shelf
  • The available features have to suit many cases, adding complexity to simple projects and possibly influencing performance–you get more than you could need

SaaS

Some white label marketplaces are sold as SaaS. Although from the features perspective, most are very similar to other marketplaces, the SaaS aspect makes them the most friendly for non-technical users. There are products like NFT Kred that can be launched with a no-code creator–you just upload the logo and can have it running. Also, for a monthly subscription, you get the maintenance covered.

The limitation is in custom features and usage caps that you wouldn’t see with other solutions. The cost is still somewhat similar to other white-label marketplaces–the basic plans cost $10,000 to launch and then a $3,000 monthly fee, but the minimum timeframe is 3 months. That totals at around $19,000 initial cost and then $3,000 per month for as long as you’d like to use the platform. On the other hand, that allows you to test ideas quite quickly and efficiently.

Pros:

  • Pre-made
  • Easy setup
  • Quick and efficient launch

Cons:

  • You pay for as long as you use the marketplace
  • Limited customization
  • Usage caps

Custom Development

Custom development is the bread and butter for companies like ours. With this approach, you can build the platform exactly how you want it and offer truly unique experiences. You have to define all the features and build them from scratch, but as they might cost more development hours, they’ll be built specifically for your project. What you’re paying for is quality and better performance as well as richer experience.

The sky is the limit when it comes to the cost of custom development, but for an NFT Marketplace, you’re probably looking at $50,000+ and 3+ months of development.

Pros:

  • Limitless possibilities
  • The highest quality
  • You don’t pay for features you don’t need
  • The best optimized for performance
  • The most control over the design and experience
  • The best optimized for maintenance costs

Cons:

  • Requires product design & QA, apart from developers
  • The most expensive
  • Requires more blockchain development experience

What Additional Costs Are There?

Building software–and NFT Marketplace is just that–is rarely a one-time operation. Once launched, it has to be maintained, for at least a limited period of time to ensure that everything runs smoothly and scales well. 

The QA process should spot all the bugs and required fixes before going live, but in the real world, some issues might persist, some typos might pass unspotted, and you can simply change your mind about certain aspects of the UI or something else.

This is why having a team booked for a couple of hours per month to handle maintenance is strongly recommended. If the NFT marketplace has been built by an external team and handed over to your internal developers, you’d also need to train them on the used technologies.

Want to Build Your NFT Marketplace?

If you’d like to build your own proprietary NFT Marketplace, feel free to talk with us on your idea. We’ll help you launch it!

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