The Principle and Key Technologies of Decentralization NFT Exchange

How to achieve decentralized trading for NFT assets that comply with the ERC-721 protocol? This is a concern for many Web3 developers. This article will introduce a method to realize NFT decentralized trading through smart contracts and a front-end interface.

Characteristics of NFT Exchange

Unlike homogeneous tokens, each NFT is unique and cannot be automatically priced through price curves like ERC-20 tokens. The mainstream way to trade NFTs currently is by using an order book model, similar to the order trading on traditional e-commerce platforms.

There are mainly two modes of order book trading:

1. Pricing Order: The seller sets the price, and the buyer can purchase if they find it acceptable.
2. Purchase Order: The buyer publishes a purchase request and price, and the seller can sell upon agreement.

This article will focus on the implementation of the pricing order trading model.

Core Functions of NFT DEX

A basic NFT decentralized exchange should have the following functions:

1. Listing Products: Allows sellers to list NFTs at a specified price
2. Product Purchase: Allows buyers to purchase NFTs at the listed price.
3. Fees: A certain percentage of the transaction fee is charged based on the transaction price.

Product Listing Process

1. Frontend: Users select NFT and set the price
2. Contract: User authorizes contract to operate NFT
3. Contract: Record the information of listed products

Product Purchase Process

1. Front-end: Users select NFT and confirm purchase
2. Contract: Verify product information, calculate transaction fees
3. Contract: Transfer NFT ownership, complete token transaction

Smart Contract Design

The core contract of the NFT DEX needs to implement the following key methods:

1. List NFT

solidity function listNFT(address nftAddress, uint256 tokenId, uint256 price) public { // Verify NFT ownership // Record listing information // Trigger listing event
}

2. Purchase NFT

solidity function purchaseNFT(address nftAddress, uint256 tokenId) public payable { // Get product information // Calculate handling fee // Transfer NFT // Trigger purchase event }

3. Remove from shelves

solidity function cancelListing(address nftAddress, uint256 tokenId) public { // Verify ownership // Update product status // Trigger cancel event }

4. Withdrawal Fee

solidity function withdrawFees() public onlyOwner { // Transfer fees in the contract }

Front-end Development Key Points

1. Use the Web3 component library to implement wallet connection
2. Call contract method to list/unlist NFT
3. Display the list of purchasable NFTs
4. Implement NFT purchase functionality
5. Manage user NFT assets

Frontend development can utilize tools like Ant Design Web3 and Wagmi to build interfaces using React or Next.js. The key is to handle the interaction with smart contracts well, including reading NFT information, sending transactions, etc.

In general, implementing a decentralized NFT exchange requires taking into account both smart contracts and front-end development. By designing contract functions and user interfaces appropriately, it can provide users with a secure and convenient NFT trading experience.