Challenges Faced when Developing NFT Marketplaces
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The global NFT market size is suggested to grow from USD 3.0 billion in 2022 to USD 13.6 billion by the end of 2027, with a Compound Annual Growth Rate (CAGR) of 35.0% during the forecast period. OpenSea is currently the largest NFT marketplace for different types of tokens. Other famous ones are Nifty Gateway, Solanart, and SuperRare, which specialize in NFT art pieces.
Since the NFT industry is growing every day and more people want to enter this space, the numbers are growing as well. However, NFT marketplace development is not a simple process that requires knowledge, experience, and a deep understanding of the niche. This is why many marketplaces failed recently – they weren’t ready to start the development.
We curated this guide with our tech specialists, who described the most common issues companies face when developing an NFT marketplace. This guide will help anyone considering development, as you will know what is the problem with NFTs in 2022 and be ready to prevent issues for a successful launch.
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Main Problems With NFT Marketplaces
High and Hidden Fees
NFT trades are always associated with high and hidden gas fees. And most beginners don’t know about them. Most of today’s NFTs are based on the Ethereum blockchain as well as ERC-20, ERC-721, and ERC-1155 token standards that are used for issuing smart contracts. To be more specific, the Ethereum blockchain utilizes the proof of work mechanism to identify its value. This results in high gas fees, and this is one of the biggest issues with NFT marketplace development today.
Poor User Experience
Since the industry is relatively new, NFT users often need to search for various crypto platforms and launchpads as well as go through lengthy sign-ups and verification processes. Some platforms also ask users to provide their personal details such as their government IDs (KYC), telephone number, and even address to create a user account.
And that will be okay in terms of data protection, but most NFT marketplaces do not provide tutorials for new users. As a result, users often struggle with creating an account, verification, or everything else they have to go through. This creates a poor user experience and forces people to look for better solutions for them.
Defective Copyright Protection
NFTs are great for any artist who wants to create digital art, fully own it and earn from this work. However, the issue is related to the fact that images and other tokens can be easily duplicated and spread throughout the internet without the creators’ consent. In addition, the NFT marketplace space lacks the legal framework and precedence to verify or reinforce the real ownership of an NFT art as well as the following copyright evidence.
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Lack of Creativity and Expression for Creators
NFT marketplaces are developed to allow artists to sell their works online and express themselves in the digital space. However, most of them create many censorship and moderation features that limit artists’ creativity and freedom. While this may make sense for some tokens, it may ruin the whole experience for most artists that want to use your NFT marketplace.
No Attention to UI and UX
UI is the abbreviation for User Interface, which is responsible for how users interact with your marketplace. High-quality, simple and understandable UI follows the goal of making User Experience (UX) better and more intuitive. This also leads to minimum effort from the user to achieve the desired result.
Since most NFT marketplaces are focused on more valuable things (according to their opinion) like verification, quick development, and protection, UX and UI play an essential role in whether your platform will be successful or not. No artist will want to use a boring and outdated interface that doesn’t attract attention and make it easier for him to create tokens.
Luckily, this issue can be easily solved by hiring a professional team of designers with relevant experience. They will make sure all elements are simple and understandable so that the user’s goal can be quickly achieved.
Poor Customer Support
As we mentioned earlier, the NFT market is still in its development stage and requires time for people to learn more about its opportunities and uses. However, some business owners do not understand the importance of helping their users as they think they are professionals in this field. In reality, you never know what bugs or issues customers may face when using your platform, and you are the only one who knows how it works.
This is why it is essential to provide 24/7 customer support that will always be online and ready to collect all feedback and provide relevant solutions for each client. Make sure that your team won’t answer with simple templates and provide real help for those who need it at each given time.
Limited Payment Methods
Modern-day NFT marketplaces are far from numerous payment functions. Even though they are able to accept payments through a wide range of options, like credit cards, debit cards, online banking, and many wallets, they still do not allow users to pay in bitcoin. However, since the market is moving and people have become more demanding about these platforms, experts suggest that this issue may be soon resolved.
Yes, NFT is a buzzword. However, it doesn’t mean that all people know what it is exactly and how it works to bring revenue. This is because there is little non-technical information about NFT, so it seems to be really confusing for most people. In addition, most of the exciting marketplaces try to combine everything in one place, which makes it less understandable for newbies and poorly organized. This is why it could be hard for people to also navigate from one category to another, choose what they want, create tokens, and manage their payments.
Cyber Threats and Online Fraud Risks
The immense popularity of NFT has also significantly increased the chances of cyber threats to token holders. Many hackers develop new ways to steal money from users’ accounts or even steal tokens in some cases. Even though the NFT marketplace is highly protected using three or four steps verifications, hackers can still get something from the platform due to new tech innovations and poor-quality software solutions.
This also happens with large and well-established marketplaces. There is also a great risk of someone impersonating a particular NFT creator and selling fake art. This is because there are many fake NFT drops, airdrops, NFT giveaways, as well as replication of famous NFTs.
This is another NFT marketplace problem that users and developers face regularly. Modern creators can’t find the right price for their arts as everything depends on a vast range of factors, like tools used, creativity, engagement, story around the collection, and more.
Since the NFT marker is in its development stage, it is challenging to set the fixed price for a particular type of NFT. Therefore, users usually don’t know how to estimate their works and which criteria to follow. This is why the fluctuations in prices stay constant, where the evaluation of tokens becomes a significant challenge.
The NFT market is not controlled by the government. However, countries like the UK, Japan, and the EU are moving with their own approaches regarding this industry for legally classifying NFTs for setting regulations that may appear soon.
This Is mainly because the market is growing at an immense speed and will soon become one of the biggest industries worldwide. So the creation of a regulatory body will soon become an urgent question. In addition, NFTs are now used in various ways and spheres, so the regulatory body will have to adapt to the rules and regulations of an exciting market and its constant changes.
Smart Contract Risks and Maintenance of NFTs
Finally, one of the biggest issues when developing an NFT marketplace is related to smart contract creation and NFT maintenance. This is closely linked to threats we described earlier as hackers often attack a Defi (Decentralized Finance) network trying to steal a large number of tokens. This is because of poor, smart contract protection and lack of expertise of developers working in it. This issue can be resolved by choosing experts in blockchain development services.
How Can Interexy Help?
Interexy is on the list of Top Dubai Blockchain Development companies with headquarters in Miami. Being one of the most trusted dev teams, we have worked with various projects, including the $11M NFT launch – Lil Durk NFT Drop with Gary Vee Involved – American rapper with the best album award 2022. During this project, we also partnered with Sandbox and now work with them for all our NFT launches.
Since successful projects require outstanding specialists, our team is made up of high-skilled engineers who have in-depth experience in NFT marketplace development. We also provide various services related to consulting and auditing NFT smart contracts to verify safety and make sure no issues will appear.
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NFT space has experienced immense growth. This is why most companies started to consider the most effective option for entering this space – NFt marketplace development. However, not everyone knows the issues that they may face when crafting this platform. We curated this guide to help you learn what is the problem with NFTs and know the challenges in advance. Book a free call and let us know about your idea!
What are the problems with NFT marketplaces?
There are many issues you may face during the NFT marketplace development, like high and hidden fees, legal issues, lack of creativity for creators, poor customer support, and more.
What is an NFT Marketplace?
NFT marketplace is a platform allowing content creators to craft NFTs and sell them within the platform.
How to overcome issues with NFTs?
The best and the simplest way to overcome these issues is to hire an experienced team with relevant background.