The term “Web3” has been in use since 2006, although it gained its current popularity only in 2021 when the global sales of non-fungible tokens (NFTs) scaled up to become a billion-dollar market. We all know that NFTs have become the future-shaping blocks as far as online experiences are concerned, and 2021’s NFT surge proved to us just that. NFT marketplaces have become entry points for NFT enthusiasts, just like how crypto exchanges serve the whole Web3 world. This blog focuses on one of the sub-domains of NFT platforms, namely , and how they will benefit the Web3 community.
A Brief Introduction to NFT Marketplace Platforms
An NFT marketplace is a platform where people can trade products backed by non-fungible tokens. They can sell generic or genre-based NFT items that fall under horizontal and vertical trading, respectively. Common genres in which NFT marketplaces operate include art, music, video, game, fantasy sports, photography, and pixelated profile images. While all NFT marketplaces accept crypto payment options, some accept fiat payments to increase their user base.
What is a Decentralized Autonomous Organization (DAO)?
A decentralized autonomous organization (DAO) is a software protocol for crypto business platforms. The protocol has an exhaustive list of rights that makes it possible to empower the end-users. The community is governed by computer programs with pre-set conditions instead of individuals. There are various DAOs actively involved in the current , focusing on different facets such as managing, acquiring talents, media, social connecting, operating investments, and ownership. These DAOs intend to put an end to the conventional organizational hierarchy, which has extended to the crypto world. Hence, any decision is taken by the whole community rather than some individuals, who mostly never understand the community’s needs.
How can Users Gain Benefits from a DAO-enabled NFT Marketplace?
In the case of an NFT marketplace platform, a DAO works as a protocol that makes the shots on every decision.
The below points offer the advantages of a DAO in an NFT marketplace.
- Users can suggest changes in the platform’s policies on listing new types of NFT products, auctions, and more.
- Smart contracts and listed NFTs are owned by the DAO, which ends the conventional autonomy. This eliminates the need for human leadership positions from the platform.
- Users can stake their NFT assets on the platform to earn rewards, as the DAO makes decisions, and staking rewards can be integrated.
- Because of the non-custodial nature of DAO, users can still have control over the NFTs or native tokens they had staked on the NFT marketplace platform.
- Users can also take part in major governance decisions to propose changes on facets such as auctions, listing, user-end modifications, changes in smart contract conditions, etc.
- Other decisions that can be made through a voting consensus include token distribution and destruction mechanisms, NFT marketplace transaction fees, forming security council panels, and changing platform policies.
- NFT marketplace users can be relieved that no centralized authorities or governmental organizations can shut down the platform abruptly. To do so, they would need to win a voting consensus that requires a lot of effort.
How Do a User’s Votes Gain Recognition in Such an NFT Marketplace?
Voting on governance aspects ensures that collective decisions are made in a DAO-enabled NFT marketplace platform. The voting system is very straightforward as it involves only a few steps. Firstly, proposals regarding the change are submitted on the DAO. Then, voting occurs on the platform, where community members can vote after thoroughly reviewing the proposals. Finally, results are announced, and the changes are implemented automatically by the DAO protocol. With DAOs, users can take a role in decision-making in the NFT marketplace platform, ultimately achieving a sense of community involvement.
Earning Model in a DAO-enabled NFT Marketplace
A user can earn voting rights of different tiers depending on the conditions set on the DAO protocol that needs to be achieved. For instance, if a user has more than a specified number of native tokens, they will be assigned a higher voting tier, providing them with a higher number of votes. Additionally, these rights offer more access to the DAO protocol, which can give them chances for increased involvement and suggestions for changes.
In a DAO-enabled NFT marketplace platform, users can earn rewards for staking and supplying NFTs and native tokens to the platform’s liquidity pool. These earning modes will aid users in earning additional income while the NFT products’ ownership remains with themselves. As more platforms come up and more genius thoughts arise, newer kinds of rewarding mechanisms are expected to become common in the future. Yield farming is one such method where users who have both NFT products and native tokens can get rewards by actively using decentralized finance operations (lending, borrowing, flash loaning, mortgaging, etc.) on their belongings. Rewards come in the form of limited-edition NFT products and native tokens, even though eligibility factors are present, it determines whether the user is fit for such high-octane earning mechanisms.
Successful DAO-enabled NFT Marketplaces in the Current Web3 Ecosystem
- Mintable is one of the first DAO-enabled NFT marketplaces, and it provides users with exclusive NFTs that grant voting rights to holders.
- PleasrDAO is an art-based NFT marketplace platform that has governance features. A new entrant to the space, the venture plans to offer fractional ownership-based NFTs alongside decentralized finance operations.
- Maxity is a novel concept based on a charity-based NFT marketplace with governance rights. The platform’s protocol is that 98% of an NFT’s sale cost is donated to the charity of the seller’s choice.
- Flamingo is yet another player in the DAO-enabled NFT marketplace space, which leans toward offering financial usage for NFTs with multiple investment strategies available for NFT holders to use.
Closing Thoughts
Thus, we can say that DAO-enabled NFT marketplaces have a huge role in the future of NFT platform development. These platforms have been the result of a novel thought prevalent since the days of Bitcoin, where validators and miners decided the flow of the crypto coin. You can also have a DAO-enabled NFT marketplace, and what you need to do is very simple. Contact an NFT platform development firm excelling in the process to realize the prospect of empowering the end-user in an NFT marketplace business setup.