Issues with existing marketplaces

1. Limitations of the single order structure

1-1. Inefficiencies in listing

When sellers want to sell multiple NFTs they own, they have to list them individually.

1-2. Relatively high gas fees

  • In a smart contract, the process of signature verification and NFT transfer takes place to complete a single order.

  • Signature verifications for orders in smart contracts require a significant amount of gas, so if a buyer wants to purchase multiple NFTs created by a single order, they will be charged a lot of gas as multiple signature verifications are required. When purchasing NFTs, you will need to pay $3-4 (as of September 2023) per transaction, while purchasing multiple NFTs will consume more gas.

2. Limitations of peer-to-peer transactions

2-1. Charging gas fees when editing and canceling listings

  • Most of the current marketplaces only focus on storing signatures of sellers and efficiently displaying listings to buyers.

  • Since order modification and cancellation information is stored on-chain, you can only modify or cancel orders by paying gas fees.

In the case of 'one large marketplace' in 2022, more than 2 million cancel function calls resulted in: = 4,400ETH+ = 9,000,000$+ in cancellation fees.

To address this issue, other marketplaces are implementing features that allow sellers to specify how long their listings remain active. After a certain period of time, the listing expires automatically but this comes with the inconvenience of having to relist it after the time you set. On the other hand, if you want to cancel in real time, you'll have to pay for the gas.

2-2. Requires integrity verification of listings

  • In most markets, the seller's signature and the buyer's signature are used to execute the transaction in the contract, so it is inconvenient to manually verify additional information besides the signature.

  • If you don't check for things like the examples below, you could lose the transaction but still pay for gas Example 1) If the NFT has already been sold on another marketplace, submitting signature will not result in a successful transaction. Example 2) Transaction fails when NFT is transferred to another wallet by the owner

Last updated