What are NFTs and their Digital Wallets?

Non-fungible Tokens are the digital assets of multiple fields like art, music, collectibles, games, etc. The NFTs cannot be manipulated for their rarity and can represent only one asset at a time. The crypto markets are swelling with their demand, thus appreciating their value phenomenally. 

NFTs are created in blockchain technology and assigned without any go-between’ services. The central element of any marketplace on the blockchain is the crypto wallet. They do both holding the NFTs safe and transactions. Having public access, i.e., open for a larger number of audiences for trade-offs with smart contracts, makes all the difference, usually termed as Public key Infrastructure (PKI). They can locate the assets through the keys available. One can understand that they are fundamental to the crypto economy.

What exactly are these crypto wallets? 

Now NFT is covered, the major component of it is the transaction and storage space for them. These storage spaces are called crypto wallets. They hold all private keys, words, etc., and can be hardware and mobile apps. 

Contrary to the belief, Crypto Wallets that the original iteration of the crypto wallet is that they just hold the keys to access the NFTs on the blockchain, not that they hold the NFTs directly. In short, by losing the keys, you lose all access to your cryptos and the NFTs. This is called custodianship in the NFT marketplace.

There are two types of wallets.

1. Custodial 
2. Non-Custodial 

The owner carries out the first transaction with the cryptocurrency, creating both the public and private keys. These keys are cryptographic codes, a series of alphanumeric values to hold the user’s NFTs and crypto coins safe and secure within the network. 

Custodial and Non-custodial NFT marketplace

As elucidated earlier, custodial has control of the NFTs, and their cryptos lie with the  Custodial wallet service provider. Whereas for Non-Custodial, the absolute power of all the NFTs is bestowed on the creator of those NFTs. Thus enabling them to transact anytime and anywhere.

Custodial NFT marketplace – working mechanism

The custodial NFT marketplace development requires the user to pledge the NFTs on the platform. Careful minting should be done, as a single mistake can misplace the NFTs in an unmatched marketplace. This is also called a centralized marketplace. 

The Trade-offs are done in the marketplace, and once sold, the marketplace shifts to a new owner as coded in the smart contracts. The cryptocurrencies transacted are sent directly to the external wallet or are stored in the platform for withdrawal.

In a Custodial NFT marketplace development, the marketplace has the authority to manage and control the NFTs, thus giving the user a handicap to witness a manipulation of the account anytime. In addition, the marketplace service provider has to offer permission for any transfers, like you are expected to register, give NFT details, etc.

Non-custodial NFT marketplace- working mechanism

The Non-Custodial NFT marketplace development is where the NFTs are uploaded to the marketplace after minting and connecting to a Non-custodial wallet. The Unique assets can be anything like images, audio, etc., and the users have the option to build an individual NFT collection. These are the Decentralized platforms. 

Since the owner of the NFT has absolute ownership at all times, the users can trade digital assets directly from their wallets. The sales proceeds are done by selling NFTs on the platform and are transferred to the buyer from the seller’s non-custodial wallet. The process here is also automated and is secured by smart contracts instead of a centralized service provider.

Examples for the Custodial and Non-Custodial NFT marketplace Development 

Custodial NFT marketplace 

• Nifty Gateway

This is a web 3.0 developed marketplace with a centralized platform, having the marketplace run without the transacting process and it’s gas fees. The Nifty Gateway Omnibus wallet technology delivers the NFT collectors a significantly lower fee and a much easy method to replace their NFTs. The noteworthy feature of them is their increased flexibility and data recovery support.

• Binance NFT Marketplace 

Binance NFT marketplace is, as we know, comprises both the exchange and a centralized platform that provides provision to browse, trade, purchase the virtual arts, etc. The easy-to-comprehend appeal of this marketplace assigns fewer fees during the transaction, thanks to its custodial attribute.

Non-Custodial NFT Marketplace

• OpenSea

As introduced earlier in the concept, OpenSea falls under the decentralized platform making its user the authority for their NFTs and cryptos. The NFTs will not be transacted until the entire trading process is completed. Since OpenSea will not initiate any purchase of the assets, sale, or transfer, the control of the blockchain is also in the hands of the user.

• SuperRare

With SuperRare, the NFTs transactions are done in a peer-to-peer (P2P) direct method. The Marketplace allows no one to access the funds or the NFTs, excluding the user who trades the said NFTs on the SuperRare NFT marketplace. 

• Rarible

The crypto asset (NFTs) is activated and then deducted from what you are owed to the wallet in exchange. Rarible NFT marketplace performs when the NFT sale happens. The smart contract on the platform automatically checks for the prerequisites agreed upon prior to the trade and activates the transaction. 

What are the advantages and disadvantages of custodial and non-custodial NFT marketplace development?

Custodial NFT marketplace (Centralized platform)

• They have third-party ownership of the private keys of the crypto wallet.
• They have access to the registered accounts.
• The transaction fees are considerably higher than others.
• The security in the centralized platform is generally lower.
• They have a high range of support systems.
• The process of KYC is essential in the marketplace.

Non-custodial NFT Marketplace (Decentralized platforms)

• The Wallet holder has the private key to all the NFTs.
• The NFTs are public and are accessible to anyone.
• They have lower transaction fees for the trade-offs.
• The non-custodial NFT marketplace has tighter security than centralized.
•  They typically have lower support.
• There is no need to enroll with the KYC details on the platform.                         

What are the affinities between the two NFT marketplace development?     

Presuming that there is a clear understanding of what NFT is and its working mechanism, it is time to dive into the similarities between the two. The two distinct but similar NFT marketplaces share attributes to run the platform, and they are, 

• NFTs can be stored
• Users have to check the compatibility with the integrated crypto wallet.

The trading concept is the core, and both centralized and decentralized strive to do it the best their way. It is necessary to know that most of the mainstream NFT marketplaces available today are on custodial NFT marketplace development.  Our team at Appdupe assists the users to their best ability and allot the type of crypto wallet and marketplace in alignment with their niche.

Wrapping up 

Selecting a marketplace depends on the type of asset the user desires to mint. We at Appdupe present the user with options for both platforms. It can be both custodial NFT marketplace development or Non-Custodial NFT marketplace development, as it all boils down to the user’s comfort. The user is left to decide on which NFT marketplace to choose. This is to have a transparent relationship between the two for a successful partnership.