November 9, 2022 | Updated on March 5, 2023
NFT artworks initially sell or release on their own site (primary market) where customers can purchase and mint them for the first time. Over time, these NFTs may find their way to NFT marketplaces like OpenSea if those same customers sell their NFTs to new customers.
Why aren’t all NFTs minted and sold on the same site? What’s the difference?
This article explains what secondary markets are in Web3 and the features that make them so popular.
What is a secondary market?
Unlike the primary market, the secondary market is a platform to buy and sell NFTs that have been minted and pre-owned. TRLab.com, Yourdaytimefireworks.trlab.com, and Calderquestion.trlab.com, are examples of primary markets where collectors can mint and purchase NFTs for the first time. Once NFTs are available on the secondary market, they can be bought and resold by the owner directly.
With TRLab NFTs, our respective collections each will receive a dedicated page on the secondary market, OpenSea. Once live on Opensea, our primary market collectors can then access their TRLab NFT on their profile page or within the metadata of that collection’s unique URL. We do this to support a seamless experience for our collectors. For example:
- Exploding the Self collection: https://opensea.io/collection/trlab
- AI 2041 collection: https://opensea.io/collection/trlab-x-ai2041
- Your Daytime Fireworks collection: https://opensea.io/collection/trlab-your-daytime-fireworks
It’s often asked whether creators can sell their NFTs for the first time directly on secondary marketplaces like OpenSea. The answer is yes, but there are a few reasons why most creators choose not to, such as relinquishing control over branding, limitations in customizability, and platform fees. Plus, secondary marketplaces house hundreds of millions of NFTs, making it challenging for artists to stand out and for first-time buyers to tell the difference between a real and a fake
Why does the secondary market matter?
The secondary market offers a few key benefits:
1. Easy access
Depending on the artist and the art experience, collectors may go through multiple phases before they can mint NFT artworks on a primary market website. Sometimes, wallet addresses may have to be pre-approved to be given access to mint the NFTs.
The secondary market, however, offers a way for one buyer to purchase an NFT from a seller without ever having to mint. This can be a straightforward way to dip your toe into collecting NFTs and learning more about the broader ecosystem.
2. More choice
In the primary market, you're usually limited to the NFTs that are available on that particular platform. On the secondary market, you have a wider selection of NFTs to choose from.
This is because a secondary marketplace is an aggregator of NFT offerings on a blockchain. Some marketplaces, like OpenSea, aggregate NFTs from multiple blockchains like Ethereum, Solana, and Polygon.
3. Royalties for creators
One of the key innovations of NFTs is that the creator may earn a royalty on the artwork each time it is resold. Most NFTs have the royalty details written into their smart contracts, a contract coded into the blockchain tied to each individual NFT.
After an NFT is first minted, payment is captured from the buyer and includes the creator’s fee, gas fees, and oftentimes platform fees. Then, each time the NFT is sold on the secondary market, the creator receives a percentage of the sale.
This innovation is especially important for artists because it has not been available in the traditional art world. For example, when a painting makes a headline and sells at auction for X dollars, the artist or creator does not earn any royalty.
What are some popular secondary NFT marketplaces?
OpenSea supports NFTs from a wide range of blockchains, such as Ethereum, Solana, Polygon, and Klaytn. It also has an extensive selection of NFTs, approximately 45 million items, ranging from digital art to in-game items.
One of the key reasons for OpenSea's success, apart from its first-mover advantage, is its easy-to-use interface and 200+ payment options. Further, by integrating MoonPay, OpenSea is able to provide users the option to buy NFTs with debit or credit cards.
You can find all TRLab NFTs on OpenSea after their initial mint. Join our Discord to see all of our official OpenSea links.
Rarible is a popular NFT marketplace that focuses on digital art and collectibles. It is a decentralized NFT marketplace that is powered by $RARI, the platform's governance token.
Since its launch in 2019, Rarible has acquired a user base of over 1 million, according to DappRadar.
The marketplace currently supports trading NFTs on 5 blockchains: Ethereum, Solana, Flow, Tezos, and Polygon.
LooksRare is a decentralized and community-first NFT marketplace on the Ethereum mainnet. The marketplace is the "new cool kid on the block." It launched in January of 2022 and has been growing rapidly with now over 8,000 monthly users, according to DappRadar.
LooksRare is unique in the way that NFT traders are rewarded with LOOKS, creators are paid royalties immediately and all the fees generated on the platform go towards staking rewards.
The secondary market is a crucial part of the NFT ecosystem, offering many benefits for both collectors and creators. While collectors gain easy access to a wide range of NFTs, creators benefit from the royalties.
With the current level of interest in NFTs, it is likely that the secondary market will continue to grow in popularity. This could lead to the development of more specialized NFT marketplaces and the emergence of new players in the space.
If you’re new to the world of NFTs and need help navigating this ever-changing space, below is a list of useful resources:
- An NFT Glossary For New Collectors: Important Terms You Should Know
- How To Set Up A Crypto Wallet: A Step-by-Step Guide
- How To Choose A Wallet For Your NFTs
- How To Secure Your Crypto Wallet And Keep Your NFTs Safe
- How To Buy Your First NFT Artwork
- Gas Fees And “Gas Wars” Explained
- Debunking 5 NFT Misconceptions
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