There has been a surge of brands and creators looking to NFTs as a medium for their work. But how many of these same brands are exploring the business opportunities around NFT marketplaces? So much focus falls on individual NFT collections and many miss the critical role marketplaces serve within web3 business models.
Given the nature of the bear market, NFT marketplace traffic has declined. Despite these market conditions, OpenSea generates nearly 50 million visitors per month. Looking to the future, the global NFT market is projected to hit $211.72 billion by 2030. These figures demonstrate the magnitude of this industry and the growing audience pool that innovative projects can tap.
Applications like OpenSea and Rarible garner most of the hype and attention, leaving many projects satisfied when listed there. This might be the simplest solution in the short term, but it’s ultimately a missed opportunity for any project with a long-term vision. NFT marketplaces exist at the heart of this growing industry, serving as hubs for commerce and engagement. As web3 proliferates, marketplaces will continue to develop and transform how brands approach revenue growth, customer acquisition and retention, and community engagement.
Web3 Revenue Models
Businesses in the web3 space have a lot to gain from ownership of their web3 storefront. Without true ownership, lots of power is sacrificed to the hands of third-party platforms. While these sacrifices might not be understood in these early years of NFT adoption, in the long run, they will become abundantly clear.
Ownership of your marketplace equates to more control over your business model. Configure your fees and royalties in a way that benefits your project and opens new revenue streams. Deepen your partnerships by offering token integration as marketplace currency and offer your members more with a fiat payment gateway. All of this functionality is at your fingertips and will unlock new opportunities to increase your bottom line.
Web3 Customer Acquisition & Retention
From the branded user experience to the unique content and assets listed, a custom marketplace can become a key differentiator. The difference is not necessarily the marketplace itself but the creative ways in which you use it to engage and deliver value to users. This perspective turns your marketplace into a multi-faceted marketing tool that can attract users and keep them engaged.
Customized NFT marketplaces allow for functionality to be tailored to your project and your target audience. For example, if you’re providing a space for user-generated content from the community to be minted and traded as NFTs, perhaps they would like a lazy mint feature to avoid costly gas fees. Creative-minded users would be excited about joining and engaging.
Anthony Estebe, Liteflow CEO and Co-founder, recently wrote about how projects can gamify their marketplace platform fees to attract new users. “Instead of applying a blanket fee to buyers and sellers based on the amount of their transaction, it’s possible to tailor these fees to your community and provide a unique web3 experience.”
Examples would be a 15% discount on fees to users who have been active for more than six months or rewarding referrals with 1% off fee for every ten sign-ups. This type of platform flexibility and utility is only made possible with a dedicated NFT marketplace.
Web3 Community Engagement
As projects deliver great experiences and grow, the community around them becomes integral. Continually engaging and keeping community members top of mind is a bit different in Web3, often because of the financial incentives behind participation. As a result, the community that forms around web3 projects tends to have a more active role, or at least expects to have their voices heard as “investors”.
A marketplace helps NFT projects bring their communities into a central location, incentivizing engagement by delivering value in various ways. Whether it’s the ability to mint and sell NFTs or access exclusive content, your project can provide a unique experience.
The value goes well beyond experiences themselves, as platform fees can be shared with members. Passive income for your community is a potent engagement tool made possible using a marketplace community wallet. “A community wallet is a mechanism built into NFT marketplaces to financially reward active members for their participation and engagement. Funds accumulate through platform fees, but instead of rewarding founders, the revenue generated is paid out to community members.” explains Anthony.
NFT marketplaces are a powerful tool for businesses building in web3. From community building and engagement to new revenue channels and marketing, marketplaces are critical to the internet’s next era. As web3 continues to develop and expand in usage among larger audiences, these ecosystems will shape the experiences and culture around NFTs.
At Liteflow, we bring the flexibility of building web3 projects according to your needs while helping you own your revenue model for the internet’s next era. If you’re interested in bringing your ideas to life, reach out to us here.