Magic Eden: NFT Marketplace Explained
Introduction
NFTs, NFTs, NFTs! If you have been in the crypto space for even a short period, you may have heard of the term NFTs. NFTs are Non-Fungible tokens (in detailed explanation in the following section). NFTs have grown so popular that several celebrities, including Gary Vee, Logan Paul, Eminem, Mike Tyson, and others, have invested millions and millions of dollars into NFT collections. You may be wondering how to buy and sell NFTs. You can do so from an NFT marketplace. In this guide, I will walk you through Magic Eden, an NFT marketplace that supports Ethereum and Solana NFTs.
This article was published as a part of the Data Science Blogathon.
Table of contents
What is an NFT?
NFT stands for Non-Fungible Token. An NFT is a digital asset created on the blockchain which serves the purpose of acting as a unique identity that proves ownership of an asset. Each NFT is unique; they cannot be duplicated, are scarce, are indivisible, and have different traits (rarities). Some of the current applications of NFTs are pictures, videos, game items, art, music, and many more. NFTs are still in their infancy, and several applications for NFTs have yet to be explored.
What is an NFT Marketplace?
NFTs can be traded. That is, they can be bought or sold. An NFT marketplace is a decentralised application (dapp) where NFTs can be traded after being minted. Furthermore, NFTs can also be auctioned on an NFT marketplace.
Mint – buying an NFT from the creator of the NFT is the first time an NFT is purchased.
Each NFT is built on a blockchain. Gas fees are required to buy or sell any NFT, which is paid in the blockchain’s native token.
For example, an NFT Marketplace built on the Ethereum blockchain. Hence, to buy or sell the Ethereum NFT, the user has to pay gas fees in terms of ETH.
What is Magic Eden?
Magic Eden is an NFT Marketplace and launchpad. Magic Eden was initially built as an NFT marketplace for the Solana ecosystem but has developed and supported Ethereum-based NFTs since then. Magic Eden currently has over 22M+ monthly active users, with over 1.9 billion dollars in trading volume, and is home to more than 8000 NFT collections.
On Magic Eden, users can buy and sell Ethereum and Solana NFTs. Besides being an NFT marketplace, Magic Eden is also a launchpad where new NFT collections may be launched, which is where NFT collections can be minted. Hence, Magic Eden acts as a secondary and primary marketplace.
You may visit the Magic Eden website by clicking here.
How is Blockchain Used?
As stated above, each NFT is built on a blockchain. In this guide, I will be connecting the Magic Eden to the Solana blockchain to demonstrate the functions and features of Magic Eden.
Solana is a layer – 1 blockchain known as the “Ethereum Killer”. The Solana blockchain has a high TPS, quick transactions, and meagre transaction fees (< $0.01).
How is Wallet Used?
A Web3 wallet is required to interact with any kind of decentralised application, that is, in our case, to buy or sell an NFT. Furthermore, a Web3 wallet will allow us to store our NFTs in a decentralised and secure manner. Since I am using the Solana blockchain in this guide, I will require a wallet that supports the Solana blockchain. The wallet I will be using in this guide is the Phantom wallet.
Phantom is a Web3 crypto wallet built on the Solana blockchain that enables users to store, send, receive, buy and swap their digital assets in a secure and decentralised way.
How to Connect Wallet to Magic Eden?
To visit Magic Eden’s home page, click here.
Users are required to connect their Web3 wallet to Magic Eden to buy or sell their NFTs. You may connect your wallet to Magic Eden by following the steps below:
- On Magic Eden’s homepage, click on the Connect Wallet button.
- Select the respective blockchain (in our case Solana).
- Select the respective Web3 wallet (in our case, Phantom).
- Click on the Connect button in your wallet.
Your wallet has now been connected to the dapp. You can verify this by viewing your wallet’s public address in the website’s top right-hand corner.
Homepage Overview
The Magic Eden homepage is full of content and contains several sections having various details. Let me break down each section on the homepage, as it will help you navigate the site easily.
Slideshow
The first section of the Magic Eden homepage is of the ongoing mint for specific NFT collections and the latest NFT drops. You may visit these collections by clicking on the Go to Launchpad (1) or Explore Collection (2) buttons.
Popular Collections
The next section after scrolling down on the homepage is the popular collection section. This section displays the NFT collections popular in the specified period (1). You may visit these collections by clicking on the NFT collection (2) of your choice from the list. The NFT collection will be displayed (3).
Launchpad Drops
The next section shows you the NFT collections whose minting is currently going on. To mint an NFT from this section, follow the steps below:
- Select the NFT collection of your choice.
- Click on the Mint button.
- Click on the Approve button in your wallet to confirm your transaction.
After the transaction has been executed, you will find your NFT in the digital asset section of your wallet.
Whitelist Opportunities
As we know, NFT collections are of a limited number. The supply for the NFTs may be less than the demand.
For example, NFT Collection A has 10,000 NFTs, whereas the number of people who want to mint the NFT is 20,000. Due to this, not everyone has the chance to get the NFT.
Hence, a whitelist assures you a chance to mint the NFT. Think of a whitelist as an early access sale where you can purchase the NFTs at a cheaper price.
The criteria for getting a whitelist are different for each NFT collection. To whitelist for an NFT collection, you may follow the steps below:
- On the respective NFT collection of your choice, click on the Register for WL button.
- Complete all the steps.
- Click on the Verify and Enter buttons.
Once verified, you will be allowed to mint the NFT early.
How to Buy NFTs?
You may purchase an NFT from the secondary market by following the steps below:
- On the homepage, in the search bar, search for the NFT collection of your choice.
- Click on the NFT you want to buy.
- Click on the Buy Now button.
- Click on the Approve button in your wallet to confirm your transaction.
Once the transaction has been completed, your NFT will appear in the digital asset section of your wallet.
Bid for an NFT
Many times, the price you see an NFT selling for is overpriced. You may want to purchase that NFT at a cheaper price. In that case, Magic Eden allows you to bid for an NFT. You can bid for an NFT by following the steps below:
- On the homepage, in the search bar, search for the NFT collection of your choice.
- Click on the NFT you want to bid for.
- Click on the Bid button.
- Enter the price you want to pay for the NFT.
- Select the expiry date of your offer.
- Click on the Bid Now button.
- Click on the Approve button in your wallet to confirm your transaction.
If the seller accepts your bid amount, the respective amount of tokens from your wallet will be deducted, and your NFT will appear in the digital asset section of your wallet.
How to Sell NFTs?
You may list your NFTs on the marketplace by following the steps below:
- Click on your wallet address in the top right-hand corner of your homepage.
- Click on the Sell button.
- Select the NFT you want to sell.
- Enter the selling price of your NFT.
- Click on the List Now button.
- Click on the Approve button in your wallet to confirm your transaction.
Your NFT has now been listed on the marketplace. You will receive the respective amount once another user buys your NFT.
Bonus Tip!
Many times when you search for an NFT collection, the following message may appear:
A flagged NFT collection is normally one which has been a scam and is no longer operational. DO NOT invest in these NFT collections, as if you buy an NFT from a flagged collection, it is doubtful that you will be able to resell that NFT.
Conclusion
Voila, you now know how to buy and sell an NFT from an NFT marketplace. The NFT space is precarious and one of the areas in crypto with the most scams and rugs. Please ensure that you DYOR (Do Your Own Research) before investing in any NFT project. I have lost a lot of money due to scams, so please take this seriously.
All the content in this article is purely for educational purposes and does NOT provide any financial advice. If you have enjoyed this guide, please let me know in the comments and consider following. Thank you for your time.
Key Takeaways
- Magic Eden is a secondary and primary marketplace.
- Magic Eden supports Solana as well as Ethereum NFT collections.
- NFT stands for Non-Fungible token, a digital asset created on a blockchain.
- Current applications of NFTs are – music, art, game items, etc.
- Via Magic Eden, users can buy, sell, bid, and launch their NFT collection.
- The majority of the NFT collections are a scam. Hence, it is essential to DYOR.
- No content in this guide provides any kind of Financial advice.
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