Blockchain for Business: the NFTs Marketplaces & the Use Case of Bilinear
They have been variously described as a cultural phenomenon, a speculative bubble, or an economic opportunity, depending on the market trends and the changing perception of the press and public opinion.
In any case, NFTs are playing a pivotal role in revolutionizing the concept of digital ownership, serving as a tool that changes the web economy and drives the transition to Web3 for businesses, small and large companies.
In particular, 2023 marks a growing interest in the potential of NFT marketplaces, which enable safety, transparency, and traceability in the buying, selling, and trading of digital assets.
Let’s explore together their main features and functionalities, as well as the main advantages they can offer to businesses.
Table of contents
1. What is an NFT marketplace?
NFT marketplaces are platforms that allow users to buy, sell, and trade digital assets.
The nature of the goods exchanged, NFTs o Non Fungible Tokens, enables innovative dynamics in buying and selling, which assure a high level of protection of property rights, transaction security and transparency, and user engagement.
As unique and non-reproducible digital assets, NFTs, which are certificates associated with individual items or their tokenized parts – whether it be artworks, collectibles, music, videos, or other digital or digitized content – allow for documenting and recording the originality, provenance, and characteristics of the single asset on the blockchain in an immutable, secure, and always verifiable manner.
All aspects related to their transfer or buying and selling in a marketplace, including details such as usage rights and royalties, are automatically made public and protected because they are registered on the blockchain and governed by smart contracts.
Furthermore, the peer-to-peer relationship between users made possible by the decentralization inherent in the blockchain enables the implementation of highly engaging mechanisms for loyalty and engagement. This includes the release of exclusive collections and benefits, the possibility of direct dialogue and interaction between enthusiasts and creators/artists, and access to new content in preview.
2. How does an NFT marketplace work and what is its purpose?
Tools and functioning
Once registered and associated with their wallet, the users can upload their assets to the marketplace and make them available for purchase. They can also explore existing collections and discover interesting NFTs, which they can buy using cryptocurrencies or fiat currency at a fixed price, through auctions, or by making arbitrary offers.
Once the purchase is completed, the NFT is transferred from the seller’s wallet to the buyer’s wallet through a blockchain transaction. This ensures traceability and verificability of the transfer, with every step in the history of the asset being recorded progressively.
The purchase may involve a transaction fee, which is not fixed but can vary from one marketplace to another. This fee is used to cover the costs associated with managing the transaction.
Key functions
NFT marketplaces, therefore, are virtual venues where users can buy and sell digital assets. They serve as intermediaries in the relationship between buyers and sellers, with the dual purpose of facilitating the showcasing and trading of assets while ensuring transparent transactions through blockchain implementation.
They represent the new frontier in the creation and exchange of digital goods, as they encompass a range of innovative and ever-evolving functionalities, opening up entirely new scenarios in the interactions between businesses, creators, and end-users.
Let’s explore together some of the most important ones.
Creation and Sale of NFTs
NFT marketplaces allow users to create their own digital asset or NFT collection and list them for sale, either at a fixed price or through methods like auctions or arbitrary offers.
Purchase of NFTs
Anyone equipped with a wallet can purchase NFTs and store them in their personal collection, making them visible to other users. This allows individuals to showcase their tastes and interests, fostering dialogue, exchange, and sharing within the NFT community.
Connections
The chance to explore collections on the platform or participate in exclusive events such as auctions creates a dynamic system that leverages curiosity, active engagement, and opportunities for direct connections between users and creators.
3. NFT marketplace: the tangible benefits for businesses
We have mentioned that NFT marketplaces can serve as an excellent entry point to Web3 and, in general, a crucial resource for the digital and technological innovation of businesses.
But what does it actually mean for a company to have its own NFT marketplace?
What are the practical benefits of creating and using it at the corporate level?
Let’s consider it together.
- Economic Opportunities
NFT marketplaces enable companies to monetize their intellectual and creative assets in new and advantageous ways, providing a constant source of revenue over time. For example, through smart contracts, companies can retain royalty rights even on subsequent sales. Additionally, these marketplaces offer companies the opportunity to diversify their product and service offerings, differentiating themselves from competitors, and reaching new audience segments.
- Visibility and Access to a Global Market
As digital showcases on the blockchain, NFT marketplaces provide brands, artists, and creators with the opportunity to promote digital artworks and creative content on a global market. They offer inclusive and cross-sectional visibility to diverse audiences without any geographical boundary.
- Transparency and Protection
The registration of each transaction related to a company’s individual asset on the blockchain ensures transparency and traceability at every step. This safeguards not only intellectual property but also the history of the asset, which is automatically updated, and preserves all rights associated with ownership. Additionally, it helps protect against counterfeiting or tampering, maintaining the integrity of the asset.
- Marketing
NFT marketplaces foster community engagement and interaction, strengthening brand loyalty and a sense of belonging. They offer opportunities such as utility NFTs and the creation of exclusive content, experiences, or early access benefits, enhancing marketing efforts.
4. How to create an NFT marketplace?
Creating an NFT marketplace requires a solid expertise in blockchain technology and specialized technical and strategic skills.
The best step for a company aiming to leverage technological innovation for its growth is to rely on a team of experienced professionals who can guide them through key steps, such as:
- defining the marketplace goals: key functionalities, target audience, market niche, expected outcomes, performance features, and scalability
- choosing the most suitable blockchain platform or platforms for creating and managing NFTs. The most commonly used platforms are Ethereum and Polygon, but there are many others to consider based on scalability features, transaction fees, and development tools that align with the company’s needs
- drafting the smart contract, which manages the logic and key functionalities of the marketplace, implements NFT standards (such as ERC-721 for Ethereum), and regulates the buyer-seller relationship
- developing authentication and security features, including payment and user access management
- creating the user interface, whether it’s a web application, mobile app, or both, to provide an engaging, attractive, and user-friendly UX for transaction execution and wallet management
- ensuring compliance with legal and regulatory requirements
- post-launch maintenance and ongoing support
5. A Practical Example: The Use Case of Bilinear
To understand concretely how an NFT marketplace works, let’s consider the use case of Bilinear.
Developed by the KNOBS team on Linea, the new Layer 2 rollup based on Consensys’ ZKP technology, a global leader in the blockchain space, Bilinear was launched on testnet last May.
During Linea Voyage’s “NFT Week” testing phase, users had the opportunity to experience the dynamics of the NFT world and its communities firsthand, including the tokenization of assets and identities. Functionality such as creating a personal NFT collection, airdropping, and buying/selling content were made available.
Bilinear quickly gained attention from the Consensys community globally, surpassing 10k users within the first 24 hours of its release, with over 444k game tokens minted.
Coinciding with Linea’s launch on the Alpha mainnet, Bilinear was officially presented and released in conjunction with the sixth edition of The Ethereum Community Conference (ETHCC).
Its name refers to a term used in computer vision and computer graphics to indicate image interpolation for accurately estimating pixel values within a grid. In general, it alludes to a working method that achieves an accurate goal by combining two variables.
Promising, isn’t it?
And what about its functionalities?
Bilinear covers typical marketplace features, custom-developed by KNOBS to meet Linea’s needs, such as the creation, buying and selling of NFTs or NFTs collections, with the advantage of an extremely simple, engaging, and intuitive user experience.
Users can create and release single or collection NFTs using a variety of collections available on the homepage. They can connect their wallets, such as Metamask, Rainbow, or Coinbase, or use WalletConnect.
One collection that has gained significant popularity due to its appealing graphics and themes is the one created by the NFT Factory startup, specializing in blockchain gaming. During testing, users could purchase a special Game Pass to experience “Cataclysm: Zero Mission,” a prequel to the upcoming NFT game “Cataclysm.”
The release on the mainnet signifies the progressive enhancement of collections and functionalities, following a roadmap that will be constantly updated and communicated to the community through Discord and Twitter channels.
KNOBS is expert in designing and developing ready-to-use and custom marketplaces for businesses, startups, and PMI. If you need any consulting or support in development, feel free to contact us. We are at your disposal!
