An Introduction to the Physical NFT Marketplaces
Evan Vandenberg
Jul 19, 2023
6 min read

An Introduction to the Physical NFT Marketplaces

Tiny shipping packages in shopping carts atop a laptop, representing a physical NFT marketplace

Non-fungible tokens (NFTs) have fundamentally transformed our understanding of ownership and value in the digital realm. They have found a myriad of applications from digital art and music to virtual real estate, and created a vibrant and diverse digital economy. 

However, their benefits aren’t limited to the digital world. A new and exciting trend is emerging that extends the benefits of NFTs to physical assets: the advent of physical NFTs. Physical NFTs create a bridge between the physical world and the blockchain.

With the rise of physical NFTs comes the need for a new kind of marketplace — a physical NFT marketplace that can redefine how we trade and invest in physical and digital assets. 

This article will delve deeper into physical NFTs, explore the workings of a physical NFT marketplace, and discuss how this new frontier could reshape the landscape of asset ownership and trading.

Key Takeaways
Physical NFTs link tangible assets to blockchain-based tokens to create a tamper-proof record of ownership and authenticity.
Physical NFT marketplaces facilitate secure trading, verification, and storage of physical NFTs.
They also enhance accessibility, transparency, and security in owning and investing in physical assets.


What are Physical NFTs?

Physical NFTs, or physical-backed NFTs, are non-fungible tokens representing a real-world asset on the blockchain. Unlike traditional NFTs that represent only digital items, physical NFTs are linked to tangible physical assets. 

Some projects like Charmin used physical NFTs or phygital ones as a marketing stunt. But others, especially those dealing with rare collectibles, are using physical NFTs to let potential buyers easily verify the authenticity and provenance of their items. 

Businesses can easily link their unique identification numbers and provenance to their NFTs, which will then exist as a permanent, tamper-proof record on the blockchain. And anyone wishing to purchase the asset can verify its authenticity by checking its metadata. 

Another advantage of tokenizing your digital asset into a physical NFT is that it can be held in a secure environment. When the token holder wants access to their physical item, they can retrieve it at a later date using their NFT. Think of the NFT as a valet ticket – in the same way the ticket holder exchanges it for their car, the token holder exchanges their NFT for the item.

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Physical NFT Marketplaces: A New Frontier

A physical NFT marketplace is a platform where physical NFTs are bought, sold, and traded. It operates similarly to a digital NFT marketplace, but with the added complexity of dealing with real-world items. A robust physical NFT marketplace must have the following features:

Asset Verification

The NFT marketplace should have a system in place to verify the authenticity of assets to collect a premium price and provide assurance to buyers and investors. 

So, depending on the type of physical asset being tokenized, the marketplace may employ experts in the field or use digital and physical markers like QR codes or RFID tags to authenticate the asset. 

Tokenization of Physical Assets

Once the physical asset is verified, the item should be tokenized. So, the marketplace should have a mechanism to convert the rights associated with the asset into a digital token on the blockchain. 

In other words, it should be able to deploy a smart contract containing information about the asset and the rules for how buyers and sellers can trade and transfer the NFT on the blockchain. 

Secure Storage 

Secure storage ensures that physical assets associated with NFTs are protected from theft, damage, or loss. It also builds trust and confidence among NFT holders and allows them to retrieve their assets easily. 

So, physical NFT marketplaces should set up their own dedicated storage facilities like a climate-controlled and surveilled vaults to assure NFT owners of the safety of their assets.  

Alternatively, they can partner with trusted third-party services specializing in secure asset storage to provide users with a reliable and organized storage system. 

Secondary Marketplaces 

A secondary market is a place for users to buy, sell, and trade NFTs after the NFTs have been minted by the creator or the primary issuer on the primary market.

Secondary marketplaces provide liquidity, allowing owners to easily convert their NFTs back into cash or other assets. In addition, they enable collectors and investors to discover and acquire NFTs that were previously sold or minted.

To facilitate these secondary market transactions, physical NFT marketplaces should provide a platform where owners can list their NFTs for sale or trade.


Interoperability refers to the ability of different systems, platforms, or technologies to seamlessly communicate, exchange information, and work together effectively.

For a physical asset NFT marketplace, this means seamlessly interacting and exchanging assets, data, or transactions with other NFT platforms, blockchain networks, or ecosystems. 

Interoperability is an important feature as it enables users from different blockchain platforms and NFT ecosystems to participate in the marketplace. 

This enhances liquidity by enabling users to access a larger market and have more options for buying, selling, or trading physical NFTs. Higher liquidity leads to more efficient price discovery and improved market dynamics.

Physical NFT Marketplaces vs. Auction Houses

Traditional auction houses have long been the standard for buying and selling high-value physical assets. However, physical NFT marketplaces offer several advantages that could disrupt this revenue model. We’ve listed the most important ones below. 

Improved Accessibility 

Traditional auction houses often require physical attendance or limited registration. In contrast, physical asset NFT marketplaces operate entirely online, making them accessible to anyone with internet access. 

This eliminates geographical barriers and allows individuals from all over the world to participate in the ownership and investment of physical assets.

Better Transparency 

NFT marketplaces offer greater transparency and ease of access to information. 

They offer detailed descriptions, provenance, and historical data about the assets are often provided, empowering potential buyers to make informed decisions. 

On the other hand, traditional auction houses have limited information available so buyers may have to conduct extensive research to gather details about an asset before participating in an auction.

Enhanced Security

NFT marketplaces leverage blockchain technology, which ensures immutable ownership records and guarantees the authenticity of assets. This eliminates concerns about counterfeit or fraudulent items, providing a secure and trustworthy environment for buyers and sellers. 

In contrast, traditional auction houses face challenges in verifying the authenticity and provenance of physical assets as their processes are prone to human errors. 

Create Physical NFTs with Dibbs

Overall, Physical NFT marketplaces are revolutionizing the ownership and investment landscape. They offer accessibility, transparency, and security, all of which traditional auction houses struggle to provide. 

So, if you want to create physical NFTs and let your buyers trade them on secondary marketplaces, Dibbs is the ideal solution. 

Dibbs offers a simple onboarding process, dedicated 24/7 support, and a trusted partnership that ensures your goals are met. 

We also provide a secure vault for your collectibles, equipped with the latest security protocols, and a comprehensive insurance policy that protects your collectibles both physically and financially.

In addition to this, Dibbs monitors all activity on the platform to detect, prevent and report any suspicious activities. To learn more about how Dibbs can help you create physical NFTs, schedule a demo

Image of Evan Vandenberg
Evan Vandenberg

Evan Vandenberg is the Co-Founder and CEO at Dibbs. Evan has been working in the NFT space full-time since 2018 and collecting since 1995.