Decentralized Asset Marketplace

Abstract

The decentralized asset marketplace is a cutting-edge platform that simplifies the buying and selling of non-fungible tokens (NFTs) by providing a secure and transparent peer-to-peer trading platform. The marketplace is built on the Ethereum blockchain, ensuring that transactions are immutable, secure, and transparent. It allows users to buy, sell and trade NFTs using cryptocurrencies such as Ethereum and Bitcoin. The smart contract that powers the platform defines a MarketItem struct that represents an NFT on sale and has several functions to support trading. The platform is designed to provide a seamless user experience with fast and efficient transactions, and performance enhancements such as using IPFS to store NFT metadata. The platform\'s benefits include increased security, transparency, and cost-effectiveness, making it a significant breakthrough in the world of NFT trading. Overall, the decentralized asset marketplace provides a safe, secure, and efficient way for users to trade NFTs without intermediaries or complex transaction processes.

Introduction

I. INTRODUCTION

The decentralized asset marketplace is a revolutionary platform that utilizes blockchain technology to create a transparent and secure environment for the buying and selling of non-fungible tokens (NFTs). The marketplace is built on the Ethereum blockchain and utilizes the ERC-721 standard for NFTs, which ensures that each NFT is unique and can be traded like any other asset.

The Ethereum blockchain is a decentralized blockchain that allows for the creation of smart contracts and decentralized applications. Smart contracts are self-executing contracts that ensure trustless and secure execution of transactions. The decentralized asset marketplace uses Solidity, a programming language designed specifically for writing smart contracts on the Ethereum blockchain, to power its platform.

The platform's front-end is built using React, a popular JavaScript library for building user interfaces. By utilizing blockchain technology, the decentralized asset marketplace provides a secure and transparent way for buyers and sellers to transact without intermediaries. The use of smart contracts ensures that transactions are executed automatically, reducing the risk of fraud and errors.

One of the most significant features of the platform is that it allows creators to earn a commission on the resale of their NFTs, which incentivizes artists and other creators to participate in the marketplace. Overall, the decentralized asset marketplace is a game-changer in the world of NFT trading, providing a secure, transparent, and efficient way for users to buy and sell unique digital assets.

II. BACKGROUND

The current centralized asset marketplace system has faced several challenges in recent times, including a lack of transparency, high fees, and centralized control.

These challenges have limited the potential of the marketplace to serve a wider range of asset classes and asset types, leading to a lack of trust between buyers and sellers. This lack of trust has resulted in many potential sellers being discouraged from participating in the market, limiting the market's growth potential.

To address these challenges, there has been a growing interest in the development of a decentralized asset marketplace. Such a marketplace would leverage blockchain technology and smart contracts to enable peer-to-peer transactions without the need for intermediaries, eliminating the limitations of the centralized asset marketplace.

Blockchain technology provides several benefits that can address the limitations of the centralized asset marketplace. Blockchain technology is decentralized, meaning that no single central authority has control over the network. This decentralization enhances transparency and eliminates the need for intermediaries, reducing transaction costs and increasing efficiency.

Smart contracts, which are self-executing contracts that have the terms of the agreement directly written into code, can help enhance the security of transactions by automating the execution of the contract terms. This automation reduces the risk of fraud and errors, increasing trust between buyers and sellers.

Moreover, a decentralized asset marketplace has the potential to serve a wide range of asset types, including NFTs, art, collectibles, and other digital assets. This broader range of asset types can create new opportunities for sellers and buyers and increase the market's growth potential.

A. Existing System

The existing Web 2.0 marketplaces suffer from centralization, lack of privacy and security, limited interoperability, and lack of transparency and fairness in governance. These issues create a significant barrier to entry for new users and limit the potential for innovation and growth in the online marketplace industry. A decentralized asset marketplace built on blockchain technology has the potential to address these issues and create a more equitable and sustainable online marketplace ecosystem.

Decentralization, enabled by blockchain technology, removes the need for intermediaries and creates a peer-to-peer network, reducing the control of a single entity and promoting transparency and accountability. Smart contracts can be used to automate transactions, reducing transaction fees and ensuring fairness and transparency in governance. Blockchain's distributed ledger technology also enhances security and privacy by encrypting and decentralizing user data, making it more difficult for hackers to breach. Additionally, the interoperability of blockchain technology allows for seamless integration with other platforms and enables cross-chain asset transfers, fostering innovation and competition in the online marketplace industry.

B. Limitations of Existing System

The existing centralized marketplaces have several limitations that restrict their ability to efficiently and securely exchange assets. These limitations include centralization, high fees, lack of transparency, limited payment options, delayed transactions, limited accessibility, lack of user control, and slow innovation. Centralized marketplaces are vulnerable to hacking and cyber-attacks, which can compromise user data and asset ownership.  High transaction fees charged by these marketplaces can significantly reduce the profits earned by sellers, making it less attractive to use such platforms. The centralized nature of these marketplaces makes it difficult for users to verify the authenticity of the products and sellers, and the limited payment options can be inconvenient for users. Additionally, delayed transaction processing times can lead to a poor user experience. Limited accessibility can further restrict the reach of these marketplaces, while the lack of user control over data and censorship by the platform can be a cause for concern. Finally, the slow pace of innovation in traditional marketplaces can result in out-dated features and limited opportunities for growth.

III. METHODOLOGY

A. System Architecture

The architecture of the Decentralized Asset Marketplace project is designed to provide a seamless and secure platform for buying and selling digital assets. The project utilizes a combination of front-end and back-end technologies to enable users to interact with the marketplace and execute transactions.

The front-end component of the architecture is built using React, a popular JavaScript library for building user interfaces. React allows for the creation of dynamic and responsive web pages, providing users with a smooth and intuitive experience. The front-end communicates with the back-end through the use of the web3.js library, which provides a bridge between the front-end and the Ethereum blockchain.

The back-end component of the architecture is built using Solidity, a programming language specifically designed for writing smart contracts on the Ethereum blockchain. The smart contract serves as the backbone of the decentralized marketplace, governing the rules and processes for buying and selling assets. It ensures the integrity and security of transactions by executing the predefined logic in a transparent and decentralized manner. The Ethereum blockchain serves as the foundation of the project, providing a decentralized and immutable ledger for recording all transactions and asset ownership. By utilizing the blockchain, the Decentralized Asset Marketplace ensures transparency, as all transactions can be publicly verified, and security, as the blockchain's cryptographic algorithms protect against tampering and fraud. The modular architecture of the back-end allows for scalability and security. The back-end is divided into separate modules, each and every module responsible for a specific set of functions. This modular approach enables easier maintenance, updates, and addition of new features to the marketplace. It also allows for better fault tolerance, as any issues in one module do not affect the entire system.

By leveraging decentralized technologies, such as the Ethereum blockchain and smart contracts, the Decentralized Asset Marketplace architecture provides a secure and efficient platform for users to transact with digital assets. The architecture's modularity and scalability ensure the platform can adapt to changing market needs and accommodate future growth and innovation.

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The smart contract inherits from ERC721URIStorage, which is a standard interface for non-fungible tokens (NFTs) with a URI (Uniform Resource Identifier) storage extension. The contract also imports Counters, which is a library that provides functions for counting the number of items. The contract includes a few global variables, such as the _tokenIds and _itemsSold counters, as well as the listing price, owner Commission Percentage, creator Commission Percentage, and owner addresses.

The contract also defines a struct called Market Item, which represents an NFT on sale. The struct contains the following properties: token Id, seller, owner, price, and sold.

The smart contract has several functions, including

1. Get Owner share and get Creator Share: functions that calculate the owner and creator share based on the commission percentages.
2. Update owner commission percentage and get Owner Commission Percentage: functions that update and retrieve the owner commission percentage.
3. Update Listing Price and get Listing Price: functions that update and retrieve the listing price.
4. Create Token: A function that creates a new NFT and adds it to the marketplace by calling create Market Item.
5. Create Market item: a private function that creates a new Market Item struct and adds it to the idT o Market Item mapping. It also transfers the NFT from the seller to the marketplace and emits a Market Item Created event.
6. Resell Token: A function that allows the current owner of an NFT to resell it by updating the corresponding Market Item struct.
7. Create Market Sale: A function that allows a buyer to purchase an NFT on the marketplace by sending the asking price. The function transfers the NFT to the buyer, updates the corresponding Market Item struct, and transfers the listing price and commission fees to the owner and creator.
8. Fetch Market Items: A function retrieves all unsold Market Item structs from the idToMarketItem mapping and returns them as an array.
9. Fetch My Items: A function that retrieves all Market Item structs owned by the caller from the id To Market Item mapping and returns them as an array.

The contract also has some state variables, such as _tokenIds and _itemsSold, which are used to keep track of the NFTs and market items created. There is also a MarketItem struct that contains information about a market item, such as the NFT's ID, seller, owner, price and sold status.

Finally, the contract imports two Solidity libraries from OpenZeppelin, which are used for counting and ERC721 implementation.

IV. TECHNOLOGY STACK

Our decentralized asset marketplace was developed using cutting-edge technologies and tools that help to ensure secure and reliable transactions. We used a combination of blockchain technology, smart contracts, and web development tools to create a decentralized platform that provides users with a secure and user-friendly experience.

A. VS Code

A code editor used for writing and editing smart contract code, developing and testing the front end, managing and deploying code to the blockchain network.

B. Solidity

Solidity is a specialized programming language specifically created for writing smart contracts on the Ethereum blockchain. It is designed to be compatible with other blockchain platforms that utilize the Ethereum Virtual Machine (EVM). With Solidity, developers can define the rules and logic that govern the behaviour of decentralized applications (dApps) and execute them on the Ethereum network.

C. ERC721

A standard for non-fungible tokens (NFTs) on the Ethereum blockchain that defines a set of rules and requirements for creating, transferring, and querying token ownership and metadata.

D. Smart Contract

A smart contract is a self-executing program with a set of rules and conditions encoded in computer code that operates on a blockchain network. It utilizes blockchain technology's decentralized and distributed ledger to enforce the terms of the contract, removing the need for intermediaries and providing a trustless system

E. Ethereum

Ethereum is a decentralized and open-source blockchain platform that revolutionized the world of blockchain technology. It provides a robust infrastructure for the development and deployment of dApps.

F. Hardhat

A development environment to build, test, and deploy smart contracts on Ethereum that provides a local blockchain network, testing framework, and task runner for Ethereum development

G. MetaMask

A browser extension that serves as a digital wallet for Ethereum-based cryptocurrencies and tokens, allowing users to securely store, send, and receive payments for buying and selling NFTs.

H. Infura (IPFS)

A cloud-based Ethereum and IPFS infrastructure provider that provides users with API access to Ethereum and IPFS networks, WebSocket endpoints for real-time data, and developer tools.

I. Sepolia Test Network

A test network for deploying and testing blockchain applications on the Ethereum network that is similar to the Ethereum mainnet but designed specifically for testing purposes.

J. Web3.js

A JavaScript library used to create a user-friendly interface that interacts with the Ethereum blockchain by connecting the front end to the network and allowing for interaction with smart contracts deployed on the blockchain.

K. React.js

React is one of the most used front-end JavaScript library that is widely used for building user interfaces. It is fast, efficient, and provides developers with the tools they need to create complex user interfaces quickly.

L. Node.js

Node.js is a large and active community, which means that developers have access to a wide range of libraries, tools, and resources that can help them build their applications faster and more efficiently. This community also contributes to the ongoing development of Node.js, which means that the platform is constantly evolving and improving.

V. RESULTS

A. Outcomes

The outcomes of this project were significant in terms of the development of a decentralized asset marketplace platform. The implementation of blockchain technology, smart contracts, and other security measures helped to ensure the authenticity, integrity, and confidentiality of all transactions conducted within the platform. One of the primary outcomes of the decentralized asset marketplace was the successful creation of a decentralized asset marketplace that enables the buying and selling of NFTs in a secure and transparent manner.

The platform provides users with a tamper-proof environment for conducting transactions, ensuring that all data is protected from manipulation or tampering. The use of smart contracts also helped to automate transactions, making the process more efficient and reliable.  

The implementation of a user authentication and authorization system also helped to ensure the security of the platform. By implementing access controls and encryption techniques, the platform provides users with a secure environment for conducting transactions, preventing unauthorized access to sensitive data and ensuring that all transactions are conducted transparently and securely.

Another significant outcome of the project was the integration of various tools and technologies, including the use of Hardhat for development, Metamask for wallet management, and Infura for IPFS storage. These tools and technologies helped to streamline the development process, making it more efficient and effective. The decentralized asset marketplace project has been successful in achieving its goals of creating a secure, transparent, and efficient platform for buying and selling NFTs. It has demonstrated the potential of blockchain technology.

1. Increased Transparency

By using blockchain technology, the decentralized asset marketplace has significantly increased transparency in the buying and selling of NFTs. All transactions are recorded on the blockchain, providing a clear and transparent history of ownership and transaction details.

2. Improved Security

The use of smart contracts, encryption, access control, and other security measures has significantly improved the security of the decentralized asset marketplace. This has made it more difficult for hackers and other malicious actors to access sensitive data or manipulate the platform.

3. Enhanced Efficiency

The use of smart contracts has automated many of the processes involved in buying and selling NFTs, making the process more efficient and reducing the potential for errors or delays.

4. Increased Accessibility

By using a decentralized platform, the asset marketplace has become more accessible to a wider range of users. It allows users to buy and sell NFTs from anywhere in the world without the need for intermediaries or third-party platforms.

The outcomes of this project demonstrate the potential for blockchain technology and decentralized platforms to revolutionize the way we conduct transactions in various industries. By providing a secure, transparent, and tamper-proof environment for transactions, decentralized platforms like the one developed in this project have the potential to transform industries ranging from finance to healthcare and beyond.

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Conclusion

A. Conclusion Our project of creating a decentralized asset marketplace using blockchain technology, smart contracts, and encryption techniques has been successful in providing a secure and transparent platform for buying and selling NFTs. By utilizing a decentralized platform, we were able to eliminate the need for middlemen and provide a trustless environment for transactions. The successful creation of a decentralized asset marketplace using blockchain technology and smart contracts has shown the potential of this technology to transform the way transactions are conducted in various industries. Our project has demonstrated that a trustless environment can be achieved by implementing security measures such as encryption, access controls, and PKI. The integration of various tools and technologies has helped to streamline the development process, making it more efficient and effective. The outcomes of this project, including increased transparency, enhanced security, improved efficiency, and increased accessibility, have shown the potential of decentralized platforms to revolutionize various industries ranging from finance to healthcare and beyond. The success of this project sets the foundation for further research and development in this area, leading to the creation of more secure, transparent, and efficient decentralized marketplaces in the future. Overall, the success of this project highlights the potential of blockchain technology to create innovative solutions for various industries, and we are excited to see where this Blockchain technology takes us in the future. B. Future Scope The success of the decentralized asset marketplace project has opened up a range of opportunities for future development and expansion. 1) Integration with other blockchains: This will allow users to buy and sell NFTs across different blockchains, creating more liquidity for NFTs. 2) Enhanced User Experience: Adding more features such as filtering options, search options, personalized recommendations, etc. to make the platform more user-friendly and easy to navigate for a better user experience. 3) Enhanced Security Features: Exploring additional security features such as two-factor authentication, multi-signature wallets, and biometric authentication to further enhance the security of the platform. 4) Expansion of Asset Types: Expanding to other types of digital assets such as cryptocurrencies, digital art, and music. This will increase the range of assets available on the platform and attract a broader user base. 5) Mobile App: Developing a mobile app for the platform will make the platform more accessible and convenient for users, which will help to attract more users and increase transaction volume. The future scope of this project is promising, and there are many opportunities for growth and expansion. The development team will continue to explore new ideas and technologies to enhance the platform and provide users with a seamless and secure experience for buying and selling NFTs.

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Copyright

Copyright © 2023 Shruti Naik, Rucha Bhujbal, Tejas Chavan, Shubham Nishad, Aayush Mishra. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.