Learn about the secondary market for Cardano NFTs and how to follow the best practices
There are several ways that NFTs can be exchanged on Cardano after it has been minted.
- One person can send the NFT to another person's wallet directly
- Use auction, trading, and escrow services on Discord
- Websites for individual NFT projects can offer resale or auctions of their NFTs
- Open marketplaces for selling any NFT minted on Cardano
- Closed marketplaces for selling NFTs for participating projects
Since NFTs are a native asset on Cardano just like ADA, they can be sent to any other wallet directly by sending it to an address.
In this case, there isn't a contractual exchange of ADA or another asset like an NFT. Instead, one party would send an agreed-upon amount for their payment of the NFT. Then the receiver of the payment would send back the NFT.
This has its obvious downsides of the seller being able to not actually send the NFT after they received payment from the buyer.
Having an intermediary between the buyer and seller of an NFT allows for a certain level of trust that both parties will successfully complete the transaction.
- Individuals and services offer the option to act as an arbitrary third party and can be the one between the buyer and seller to make the transaction safer.
- Services and bots allow for various NFT auction functionality on Discord. This can include a combination of allowing potential buyers to place bids on NFTs, automatically select the winning bid/s, receiving the funds, distributing the NFTs, and more.
- There are bots that can be provided an NFT and then distribute it based on a giveaway result.
While having a service in between the buyer and seller introduces a certain level of trust, it isn't foolproof.
There can still be malicious people who can run away with the payment or the NFT without fulfilling the transaction. Unfortunately, bugs also can happen and a bot or service can lose your ADA or NFT. Just be sure to do your research when choosing your solution.
It's possible to build a website to allow holders to resell their NFTs on a specific site.
NMKR Studio doesn't support the resale of NFTs via its API or website but NFTs minted through the platform can be resold anywhere Cardano NFTs are supported, even if you build your own solution.
The benefit of creating your own marketplace to sell your NFTs is that you can introduce any level of customization or specialization that you would want to have.
The downside is that it's recreating a lot of what marketplaces have to offer but with a much smaller reach with a longer time to market.
As NFTs have matured on Cardano, marketplaces that allow anyone to sign up and list their NFTs for sale have been released.
There are still downsides to the existing marketplaces like having fake NFTs listed, sellers not providing the NFT after payment, and intermittent downtime. These are typical growing pains of a rapidly growing community but consider them when listing, buying, and selling your NFTs.
Similar to the open marketplaces that allow anyone to sign up and list their NFTs for sale, closed marketplaces exist.
Their primary difference is that only certain NFTs are allowed to be resold/auctioned on their platform.
The upside to these platforms is that they can give you access to a wide audience of similar projects/customers and limit the amount of fake NFTs listed. The downsides are they can be hard to get into because of their exclusivity and they typically have a smaller reach than open marketplaces.
It's common practice to use the policy ID as a way to uniquely identify which project an NFT is a part of.
As a buyer, this is how you can prevent yourself from buying a fake NFT. By first going to a trusted source like the project's website, Twitter, or Discord, you can obtain the policy ID. Then before you make any purchase, ensure the NFT you're buying has the matching policy ID.
This means as a seller of NFTs you should make sure to make your policy IDs publicly available by including them on your project's website, Twitter, and Discord.
As mentioned throughout our KnowledgeHub, the PolicyID is the unique, immutable identifier for all of the NFT's that are minted for a given project. Potential buyers therefore use the Policy ID to ensure that they are purchasing an authentic NFT. Most of the Secondary Markets know this, so they have built in features that allow their users to search (and hide) based on verified Projects.
The process of verification varies from site-to-site, but essentially involves the creator submitting a request containing:
- Project Name
- Policy ID
- Proof of Authenticity, such as:
- Evidence of the official project twitter tweeting the matching Policy ID
- Evidence of the official project website displaying the matching Policy ID
- Evidence of the official project discord displaying the matching Policy ID
Verifying your project not only helps your community avoid scams, but without it, many potential buyers will likely never even see your NFTs being listed on Secondary Markets. Often the default setting is to only show verified projects to users, so getting verified is very important for any creator.