Developing an NFT aggregator
Merit Circle is soon entering the NFT trading space with the release of the Sphere NFT Marketplace. Aggregators are a new tool for NFT trading. NFT aggregation is currently dominated by Gem, but there is plenty of opportunity for a new aggregator to enter the market. Together with Merit Circle, I want to develop an NFT aggregator that is user-friendly, and cheaper to use than any competitor. Having a well-developed NFT aggregator that natively integrates Sphere drives more volume to the marketplace, thereby generating more fees and revenue for the DAO.
With the soon-to-be released Sphere marketplace, the Merit Circle DAO is entering the NFT trading space. A major new development in NFT trading is NFT aggregation. These are platforms which are used to ‘sweep’ groups of NFTs across multiple marketplaces simultaneously. This is usually done by buying multiple NFTs for the lowest possible price. NFT aggregators are also developed with optimized gas costs and user experience. Taking these things into account, let’s look at what our NFT aggregator would look like.
We will develop an NFT aggregation platform featuring a user-friendly interface and satisfying user experience. The platform will have a simple order flow, in which the user can easily select the desired NFTs from any tradeable collection on multiple marketplaces. A shopping cart will efficiently show the selected NFTs, which the user can then purchase through an easy-to-use checkout area that also transparently shows all the fees. Optionally, users can select the currency they wish to pay with.
The user interface will be interacting with the back layer of our aggregator. Smart contracts will be gas-optimized in every way to ensure the lowest possible gas fees from our side. To facilitate the use of virtually any token for buying NFTs, contracts will interact with protocols such as Uniswap, in a secure and cheap way, without the user having to leave the platform.
The aggregator’s user interface and smart contract structure creates a cheap, and user-friendly, platform to buy NFTs. To further enhance the core functionality of buying NFTs, the platform will be equipped with a rich set of advanced features.
Data & analytics
Sweeping the floor price of NFTs in one transaction, thereby saving on gas fees and headache, is only one aspect of aggregators. Another important aspect is the data available on NFTs, collections, and traders. Although most users will just blindly purchase the cheapest NFTs available in a collection, data is vital to learn which collections are becoming popular, and which NFTs could be lucrative to buy. Our aggregator will equip sweepers with data and analytical tools to discover trends, rare NFTs, and rising or declining collection popularity. Data which can be expected includes but is not limited to: traits, rarity, pricing, and historic data. The aggregator will also be equipped with messaging services to notify users when a certain NFT has become available for purchase. Users will also be able to see collection-wide statistics which demonstrate the distribution of the NFTs, as well as charts to show trends in trading activity and floor prices.
The aggregator will not only be an efficient tool to buy NFTs, but will also house interactive social features. Users will be able to follow each other, talk to each other in a troll box, and view each other’s trading activity and collected NFTs. The user profile pages are composed of aggregated data: pre-filled username and profile picture from marketplaces, statistics from games, and the possibility to set an NFT as a profile picture (or dress up an NFT character and save it as a profile picture). There are several creative ways to gamify the social part of the platform, and we will be experimenting with several features, such as spendable sweeping incentives.
The platform aggregates NFT trades on multiple chains, starting with Ethereum and expanding to Polygon, Avalanche, and other chains with NFT trading activity. Both Gem and Genie are currently only deployed on Ethereum, but will likely expand to more chains, especially considering OpenSea alone is also deployed on Polygon, Solana, and Klaytn. A good technological architecture is needed to make sure data is being collected and made available for the chains that are being integrated, without jeopardizing performance and security of the overall platform.
We will integrate marketplaces on all supported chains, starting with 12 marketplaces on Ethereum, including Sphere, OpenSea, and LooksRare. All NFTs that are for sale on these marketplaces will be purchasable on the aggregator, and will be further detailed with pricing data, rarity ranking, and past activity.
Other than NFT trading, aggregation of other decentralized NFT use-cases will be developed at a later stage. A few use-cases that can be expected are the aggregation of NFT-lending protocols, and breeding and staking of NFTs on various protocols and games.
We will not charge a fee on top of the fees paid for the NFT purchases. Instead, we will focus on acquiring a large user base, which, at a later stage, will be monetizable with fees on premium features, advertisements, and sponsored integrations. Gem and Genie do not charge an extra fee for the trades aggregated on their platform, therefore it would not make any sense for us to do this either. Instead, by having an efficient and easy-to-use NFT aggregation platform with interactive social features, we aim to capture most of the volume traded through aggregators. This will strengthen the position of our aggregator in the NFT space, and increase its potential value.
I have already been researching and developing smart contracts, which currently have cheaper gas fees than Gem. The alpha version of the aggregator can be launched in roughly 3 months. This version will be launched on Ethereum, and have the necessary features for a user-friendly way of sweeping NFTs. Subsequently , the platform will be expanded with the envisioned data, tools, multi-chain architecture, and social features. We will share and maintain a detailed list of proposed, requested, and implemented features on the platform.
Merit Circle and I will actively work together to bring this NFT aggregator to life. In the startup phase, Merit Circle will help with branding, design, and closing a pre-seed equity funding round. I will focus mainly on developing the platform, expanding the team, and making the smart contracts even cheaper than they already are. Furthermore, Merit Circle will be 1 of the signers of the aggregator’s multi-sig wallet, thereby taking an active role in the management of the funds.
Gem has grown from 212.5K visits in January to 3 million visits in April (source: Semrush). These are promising metrics, but if our aggregator intends to outperform these numbers, we will require fast and scalable servers that can deliver content with minimum latency. Therefore, a few things are very important. Firstly, the code must be optimized to collect and provide data efficiently. Secondly, the data that is being stored, must be stored within a good data structure. We will be using a high-performance database engine to complement this.Lastly, the servers must be protected from outside usage and possible attack (DDOS). Our basic architecture scaling will consist of having multiple servers, in multiple regions, to provide our users all over the world with the high performance platform they need.
The two leading NFT aggregators are Gem and Genie, which are respectively doing $200.37M and $32.32M in volume the past month (gem, genie). For reference, OpenSea did $1.34B in volume the past month. Genie is self-funded and being developed by a relatively small, but capable, team. Gem has been recently acquired by OpenSea and is expanding its features, team members, and marketplace integrations. High aggregator volume indicates that these aggregators do play a significant role in the NFT trading space. Thankfully, as NFT aggregation is such a new concept, there is still plenty of opportunity for a new aggregator to enter the space, simply by making a better, cheaper, and more interactive aggregator - such as the one I have described.
It goes without saying that the Merit Circle DAO Core Contributors, and community, are very capable, well-connected, and develop products that set a new precedent in the crypto space, in terms of branding and quality. Being a Meritian myself and having thoroughly discussed the aggregator with Mark, I believe Merit Circle is the best possible partner to develop this with. In return, the platform will be a unique NFT aggregator with the ambition and potential to become an industry leader. Having 50% of the equity in the aggregator allows Merit Circle to have a significant say in the development of the platform, as well as the potential for a large return on investment.
Other than the financial factors, working closely together allows for new technological findings to be shared with each other. This is something that can be especially interesting with the new Sphere marketplace arriving soon. As the development of the aggregator is heavily focused on reducing gas costs, and enhancing user experience, Merit Circle products could benefit from new findings and integrate the code into their codebases. Moreover, having an NFT aggregator that natively integrates Sphere drives more volume to the marketplace, thus generating more fees and revenue for the DAO.
The proposed budget is $50,000, which will be used to finance the startup phase. The Merit Circle DAO will receive 50% of the aggregator’s common shares. The $50,000 will be used for branding, design, and closing a pre-seed equity round to fund the complete development of the aggregator.
This is blockchain, equity doesn’t exist
Using equity instead of a token allows to quickly start on the development and launch of the NFT aggregator. It saves unnecessary stalling and allows us to focus on building.
There is no revenue to be captured with an aggregator.
All existing NFT aggregators do not currently charge any extra fee, and neither will we. We have the potential to acquire the majority of NFT aggregator users. Certain types of monetization can begin once a large user base is captured. Moreover, we could charge fees for certain advanced orders, such as orders that need to swap tokens first.
But who is this guy with this weird name asking for our money and attention?
MC help in equity fundraise
I will need help from Merit Circle to close an equity funding round. This would include help with legals, finances, branding, and planning.
Should the DAO develop a NFT aggregator with Douwe and take a 50% equity stake for a $50,000 budget?
- The acceptance of this proposal grants the Merit Circle DAO 50% ownership in the to-be created equity of the proposed project. The remaining 50% will be owned by Douwe.
- In the event that a token is created, it should give Merit Circle DAO a pro-rata amount of tokens. Proportional to the amount of team tokens the team equity would get in such an event.
- Merit Circle will help with bootstrapping. This includes legals, branding, planning and fundraising. This is what the 50K budget is used for.
- After the bootstrap phase, Merit Circle DAO will remain a founding partner, but the aggregator team will be led by an independent team. The seed raise funds can be used by Douwe to comprise a team.
- Equity for additional valuable team members will be created during the fundraise. The size and allocation will be negotiated with the existing equity holders (MC DAO and Douwe) and investors.
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