NFT Secondary Market: a guide to limitless possibilities with NFTs
Right now, the NFT market is booming. The music industry, Events, and Entertainment are some industries in which NFTs are catching on. Many NFTs have come along with many different Utilities. NFT Tickets, NFT Music, and NFT experiences, to name a few.
As NFTs become increasingly mainstream and spendable in many different sectors, important questions arise. Where to buy and sell these NFTs? How to trust a marketplace instead of another? Which market should you choose—the primary one or the secondary one?
In this article, we will explain the differences between primary and secondary markets, the advantages of an NFT Secondary Market, and discover the limitless possibilities of this technology. Keep reading!
Secondary Market vs. Primary Market: what are the differences?
The ecosystem in which a rights holder, such as a promoter, event producer, sports team, or other organization that puts on a live event, sells tickets to customers has traditionally been referred to as the "primary market." Typically, this ecosystem includes its ticketing partner(s) and the official ticketer of the event venue.
The primary market ticket seller or event producer sets the price for the tickets that are offered for purchase. The rights holder or the location where the event is held may specify a small number of shops where primary tickets may be purchased. Primary tickets are always accepted at the door and are backed by the venue and the rights holder's complete trust and guarantee.
A common definition of the "secondary market" is the ecosystem where ticket holders, and typically experienced resellers (ticket brokers and scalpers), have resold tickets at a higher price to make money.
Prices for tickets on the secondary market are set or influenced by outside parties who have acquired numerous tickets on the primary market. Due to the vendors' access to numerous sites, identical tickets frequently appear in multiple locations. Due to a lack of regulation and profit potential, there is more room for fraudulent behavior, consumer abuse, and exorbitant costs.
So how can someone trust the secondary market?
The answer is NFTs.
NFTs are not only reshaping the whole events industry but also solving old problems related to marketplace and secondary market sales. How?
NFT Primary Market & NFT Secondary Market: how they differ from traditional marketplaces
Before we get into NFT primary and secondary markets and how they interact with the active trending community, it is crucial first to define what an NFT is.
What is an NFT?
An NFT is a digital asset that symbolizes a person's ownership of a certain object. It is "non-fungible," as the name implies, which means it is unique. A smart contract that codifies the agreement between the buyer and seller and keeps it on blockchain ledgers supports this ownership. As a result, the typical cryptocurrency investor can profit from their NFT investments.
NFTs can also represent digital assets in addition to physical and tangible objects. They also come with additional perks and utilities that bring real-life benefits to their owners. We suggest you read NFT Utilities, along with NFT Tickets, NFT Memberships, and NFT Digital Twins, to learn more about them.
Furthermore – and this is where NFT Secondary Market and the traditional one take two different roads-being NFTs, or non-fungible tokens, constructed on top of blockchains, they can encode the terms and conditions of the sale using smart contracts. Artists and organizers can control the prices in the primary and secondary markets and how tickets are marketed, all while keeping tabs on sales.
NFTs effectively provide artists the authority to drive out scalpers while ensuring a controlled marketplace. In this healthy space, tickets and anything event-related can be resold fairly.
Now that we’ve laid the groundwork let’s go back to business. What are NFT primary and secondary markets? What are the differences?
Let’s start by saying that the concept of the NFT primary and secondary markets doesn’t differ much from traditional markets.
The market where NFTs are bought directly from the creator by a collector or investor after the creator posts their NFT for sale can be referred to as the primary market for NFTs. Every other day, new NFT collections are published, giving collectors a chance to purchase an NFT for the first time. The action in question is called "minting."
On the other hand, when investors or purchasers buy from a secondary entity rather than the distributing body in the primary market, it is known as NFT secondary market. This includes any transaction carried out in the NFT space following the "minting phase," in which the crypto artist decides the price of a work. Consider it the conventional stock exchange's digital equivalent.
In a nutshell, the primary market is where a creator lists their NFT for sale, whereas the secondary market is where a collector, who has bought an NFT, can resell or relist their NFTs.
Why is NFT Secondary Market important?
You could ask yourself, "Why can't users exchange NFTs directly among themselves and eliminate the middleman?" However, there is currently no method to sell NFTs without a marketplace, unlike tangible products that may be sold at yard sales or through internet hubs.
This isn't always a negative thing. Here are several methods marketplaces utilize to enhance user experiences.
Supports Digital Artists
In contrast to traditional art, a small royalty is given to the original author each time a crypto asset is traded on a secondary market. This makes the process more advantageous to artists because it means collectors can't become wealthy from other people's work without sharing some riches with the person who created it. So, if there's a creator you'd like to support, think about getting their NFTs.
Community-Driven Trading
Blockchain technology was developed to build more open, democratic environments where anybody can participate and have an impact on how things are done. Secondary markets demonstrate that.
By purchasing and exchanging goods at rates, they deem to be "worth it," people place value on things, setting the standard for all other users. As a result, local communities set prices rather than a centralized organization.
What kind of NFT Markets exists?
NFTs have a huge variety of secondary markets. Others have an extensive feature set to improve the user experience, while some are simple without all the frills.
1. Streamlined Marketplaces
As the term implies, “ streamlined “ markets offer a basic trading experience. Users can then engage in competitive bidding matches a la an auction house or make an outright purchase. These platforms frequently include a built-in payment channel that may also support transactions using fiat currency.
2. Augmented Marketplace
In contrast to simplified marketplaces, enhanced platforms offer a wealth of additional options for specialized projects. This could entail anything from hosting an NFT gaming project on their servers to marketing initiatives.
On augmented markets, you can find NFTs and blockchain-based projects that are more advanced.
3. Closed Marketplace
A closed marketplace does exactly what it says on the tin: it only offers particular NFT types or serves specific customers. Users on these sites are typically scarce because they have a higher entry hurdle.
NFT Secondary Market: Conclusion
In conclusion, the NFT secondary market has become a vibrant and dynamic space for collectors, investors, and artists alike. With the rise of digital art and the increasing popularity of blockchain technology, NFTs have provided a new way to monetize and appreciate digital art. The secondary market has allowed for the trading of NFTs, creating a new form of investment and a source of revenue for creators. While there are still questions about the sustainability of the market and the long-term value of NFTs, it is clear that they have made a significant impact on the art world and the way we think about ownership and value in the digital age. As the market continues to evolve and mature, it will be interesting to see how NFTs continue to shape the future of art and commerce.
