NFT MARKETPLACE MANAGEMENT SYSTEM

In art, each work created is considered the property of an artist and is owned only by that artist. When an artist sells their work, ownership goes to the buyer. A tangible product is easy to be owned by someone. So there is very little dispute over it. But digital transformation has changed a lot, artists now tend to digitize their works (NFT) and display them on different technology platforms. Therefore, its ownership is no longer unique because anyone can download and repost it everywhere without asking for permission or spending money. This has sparked a wave of desire for a technology to help authors protect the intellectual property rights of their digitized works. As a result, the NFT marketplace was born. NFT marketplace is a place (can be a website) that stores many digital works from many different artists and a place to buy and sell NFTs. NFT marketplace applies blockchain technology to protect ownership of NFTs and make sure no one can steal or copy it. With knowledge learned in database course, we will analyze the organizational structure of an NFT marketplace by this report.

NFT MARKETPLACE MANAGEMENT SYSTEM By Riddle Lecturer: MSc.Tran Quang Than Date: 15/05/2022 Course: Database RIDDLE’S TEAM MEMBERS No Full Name Student ID Performance Role Trần Thị Kiều Trinh K204111813 100% Leader Nguyễn Thành Phát K204110605 100% Member Nguyễn Thị Linh Anh K204111797 100% Member Trần Nguyễn Ngọc Hiếu K204110566 100% Member Bằng Nhân Trí K204110611 100% Member TABLE OF CONTENTS I OVERVIEW Background Objectives Goals SWOT Development 4 5 II BUSINESS MODEL INTRODUCTION Blockchain NFT Polygon Business Processes 4.1 Creating NFT 4.2 Purchasing 4.3 Expertising 6 9 11 12 III ERD Entities and Attributes E-R Diagram Relationship Explanation 13 13 15 15 IV LOGICAL DATABASE DESIGN 17 V PHYSICAL DATABASE DESIGN Table Design 1.1 Users 1.2 NFT Assets 1.3 Transaction 1.4 Block 1.5 Creating NFT Contract 1.6 Rate 1.7 Expert 1.8 Commission 1.9 Payout 1.10 Owning license 1.11 Receipt 1.12 Merchant 1.13 Creator Create tables in SQL Server 19 19 19 19 19 20 21 21 21 21 22 22 22 22 23 24 VI QUERY 29 LIST OF FIGURES Figure 1: Business Process - How to create a new NFT Figure 2: Business Process - How to purchase a NFT 11 Figure 3: Business Process - How to expertise a NFT 12 Figure 4: Entity Relationship Diagram for NFT marketplace 15 Figure 5: Logical Database - p.1 17 Figure 6: Logical Database - p.2 18 LIST OF TABLES Table 1: SWOT analysis Table 2: The explanation of the entity relationship 16 Table 3: Physical database design of "Users" entity 19 Table 4: Physical database design of "NFT assets" entity 19 Table 5: Physical database design of "Transaction" entity 20 Table 6: Physical database design of "Block" entity 20 Table 7: Physical database design of "Creating NFT Contract" entity 21 Table 8: Physical database design of "Rate" entity 21 Table 9: Physical database design of "Expert" entity 21 Table 10: Physical database design of "Commission" entity 21 Table 11: Physical database design of "Payout" entity 22 Table 12: Physical database design of "Owning License" entity 22 Table 13: Physical database design of "Receipt" entity 22 Table 14: Physical database design of "Merchant" entity 22 Table 15: Physical database design of "Creator" entity 23 I OVERVIEW Background In art, each work created is considered the property of an artist and is owned only by that artist When an artist sells their work, ownership goes to the buyer A tangible product is easy to be owned by someone So there is very little dispute over it But digital transformation has changed a lot, artists now tend to digitize their works (NFT) and display them on different technology platforms Therefore, its ownership is no longer unique because anyone can download and repost it everywhere without asking for permission or spending money This has sparked a wave of desire for a technology to help authors protect the intellectual property rights of their digitized works As a result, the NFT marketplace was born NFT marketplace is a place (can be a website) that stores many digital works from many different artists and a place to buy and sell NFTs NFT marketplace applies blockchain technology to protect ownership of NFTs and make sure no one can steal or copy it With knowledge learned in database course, we will analyze the organizational structure of an NFT marketplace by this report Objectives 2.1 For sellers: Driving sales is easier, wherever you are Sellers will not need to search for their customers on different platforms, but only need to focus on creating the best product The website will help sellers find their customers Reduce business costs Sellers not need to run expensive marketing ads or intermediaries costs are also much cheaper on this website Build a loyal and stable customer base When sellers focus on a specific type/product, they will build a stable customer base, from which the monthly income will also be stable 2.2 For customers: Save time and costs Customers not need to take/create the necessary photos for their publications Also, there is no need to hire outside people to it because it will cost a lot The photos provided on the website by sellers will usually be cheaper and customers can just sit at home to search for the right photo There are more choices Because the stock of images on the website is provided by many different authors, it is possible that those photos are on the same topic Customers will have more choices to best suit themselves and the publication they need An abundance of ideas The publications designed on the website are of good quality and are uniquely provided by the seller Customers can use those publications or order them exclusively for the seller to make a better and more tailored version Goals - Design the database (including logical and physical) for the website and the products on it - Build the buying and selling process on the website for both sellers and customers - Build an online payment process both domestically and internationally SWOT Strengths - Weaknesses - There is a huge stock of NFT provided by many different sellers The only and the first NFT marketplace was created by Vietnamese Must have payment account to sign in the website and purchase Don’t be popular as much as other NFT marketplace Opportunities - NFT marketplace is the trend recently Non-designers like to use NFT instead of designing by themselves Threats - Someone impersonate a famous NFT artist and selling fake NFTs Some people even promote such giveaways on social media to gain more attraction While they are promoting NFT, others are scammed at such fake stores - Table 1: SWOT analysis Development Integrating databases into a stock photos website system, developing more tables and features to access every procedure in the enterprise II BUSINESS MODEL INTRODUCTION Blockchain A blockchain is a distributed database that is shared among the nodes of a computer network As a database, a blockchain stores information electronically in digital format Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions The innovation with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party One key difference between a typical database and a blockchain is how the data is structured A blockchain collects information together in groups, known as blocks, that hold sets of information Blocks have certain storage capacities and, when filled, are closed and linked to the previously filled block, forming a chain of data known as the blockchain All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled A database usually structures its data into tables, whereas a blockchain, like its name implies, structures its data into chunks (blocks) that are strung together This data structure inherently makes an irreversible timeline of data when implemented in a decentralized nature When a block is filled, it is set in stone and becomes a part of this timeline Each block in the chain is given an exact time stamp when it is added to the chain NFT An NFT is a digital asset that represents real-world objects like art, music, ingame items and videos They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos Although they’ve been around since 2014, NFTs are gaining notoriety now because they are becoming an increasingly popular way to buy and sell digital artwork A staggering $174 million has been spent on NFTs since November 2017 NFTs are also generally one of a kind, or at least one of a very limited run, and have unique identifying codes “Essentially, NFTs create digital scarcity,” says Arry Yu, chair of the Washington Technology Industry Association Cascadia Blockchain Council and managing director of Yellow Umbrella Ventures This stands in stark contrast to most digital creations, which are almost always infinite in supply Hypothetically, cutting off the supply should raise the value of a given asset, assuming it’s in demand But many NFTs, at least in these early days, have been digital creations that already exist in some form elsewhere, like iconic video clips from NBA games or securitized versions of digital art that’s already floating around on Instagram Famous digital artist Mike Winklemann, better known as “Beeple,” crafted a composite of 5,000 daily drawings to create perhaps the most famous NFT of 2021, “EVERYDAYS: The First 5000 Days,” which sold at Christie’s for a record-breaking $69.3 million Anyone can view the individual images—or even the entire collage of images online for free So why are people willing to spend millions on something they could easily screenshot or download? Because an NFT allows the buyer to own the original item Not only that, it contains built-in authentication, which serves as proof of ownership Collectors value those “digital bragging rights” almost more than the item itself Polygon Polygon is a cryptocurrency, with the symbol MATIC, and also a technology platform that enables blockchain networks to connect and scale Polygon—"Ethereum's internet of blockchains"— launched under the name Matic Network in 2017 The Polygon platform operates using the Ethereum blockchain, and connects Ethereum-based projects Using the Polygon platform can increase the flexibility, scalability, and sovereignty of a blockchain project while still affording the security, interoperability, and structural benefits of the Ethereum blockchain MATIC is an ERC-20 token, meaning that it's compatible with other Ethereumbased digital currencies MATIC is used to govern and secure the Polygon network and to pay network transaction fees Polygon uses a modified proof-of-stake consensus mechanism that enables consensus to be achieved with every block (Achieving consensus using traditional proof-of-stake requires processing many blocks to achieve consensus.) The proof-ofstake method requires network participants to stake—agree to not trade or sell—their MATIC, in exchange for the right to validate Polygon network transactions Successful validators in the Polygon network are rewarded with MATIC The Polygon network, as a secondary scaling solution, aims to address limitations of the Ethereum platform—namely high transaction fees and slow transaction processing speeds Polygon can: - Deploy existing blockchain networks and develop custom blockchains - Enable communicate between Ethereum and other blockchains - Help existing blockchain networks to become compatible with Ethereum Business Processes 4.1 Creating NFT Figure 1: Business Process - How to create a new NFT ... only one CREATOR R2 NFT - CREATING NFT CONTRACT n-1 Each NFT is created by only one CREATING NFT CONTRACT Each CREATING NFT CONTRACT may create many NFT R3 RATE - NFT n-1 Each NFT can be feedbacked... result, the NFT marketplace was born NFT marketplace is a place (can be a website) that stores many digital works from many different artists and a place to buy and sell NFTs NFT marketplace. .. as other NFT marketplace Opportunities - NFT marketplace is the trend recently Non-designers like to use NFT instead of designing by themselves Threats - Someone impersonate a famous NFT artist