NFT Marketplace — Gas-Efficient Hybrid Architecture

🎯 Project Summary

A gas-optimized NFT marketplace built on Ethereum, enabling trustless ERC-721 ↔ ERC-20 swaps via cryptographic signatures and off-chain auction coordination. By moving auction logic off-chain and verifying signatures on-chain, the system achieves up to 90% gas savings without compromising on security or trustlessness.

GitHub: danielrc888/cheap-nft-marketplace

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🏗️ Architecture Overview

Hybrid Off-Chain / On-Chain Design

┌─────────────────────┐         ┌─────────────────────┐
│   Off-Chain System  │         │   On-Chain System   │
│   (Express API)     │         │   (Solidity)        │
├─────────────────────┤         ├─────────────────────┤
│ • Auction Creation  │         │ • Marketplace.sol   │
│ • Bid Management    │         │ • Token Settlement  │
│ • Signature Verify  │ ◄─────► │ • ECDSA Validation  │
│ • REST Endpoints    │         │ • Security Checks   │
└─────────────────────┘         └─────────────────────┘

Why This Design Works

• 🧮 Gas Optimization — Off-chain listings & bids → ~90% less gas than on-chain storage

• 🔄 Atomic Settlement — NFT + ERC-20 exchanged in one transaction

• 🔐 Trustless Execution — Both parties sign the same auction hash

• ⚡ Scalability — Off-chain state scales with minimal blockchain load

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🔐 Core Technical Implementation

Signature Lifecycle

keccak256(
  nftAddress,
  nftOwner,
  nftTokenId,
  minPrice,
  erc20Address,
  bidder,
  bidAmount
)

• Signature Generation: ethers.solidityPackedKeccak256 + ECDSA signing

• Verification: On-chain ecrecover validates owner & bidder

• Security: Prevents replay attacks and unauthorized settlements

Smart Contract Highlights

function settleAuction(...) external {
    require(bidAmount >= minPrice, "Below min price");
    address recoveredOwner = recoverSigner(auctionHash, ownerSig);
    address recoveredBidder = recoverSigner(auctionHash, bidderSig);
    require(nftOwner == recoveredOwner);
    require(bidder == recoveredBidder);
    require(nftOwner == msg.sender || bidder == msg.sender);
    IERC20(erc20).transferFrom(bidder, nftOwner, bidAmount);
    IERC721(nft).transferFrom(nftOwner, bidder, nftTokenId);
}

✅ Atomic execution — both transfers succeed or revert ✅ Dual authorization — owner & bidder signatures required ✅ Replay protection — cryptographic message binding

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📋 Auction Lifecycle

1. NFT Owner: Approves NFT + signs auction (off-chain) → /auction/create

2. Bidder: Approves ERC-20 + signs bid → /auction/:id/bid/create

3. Owner: Approves specific bid → /auction/:id/bid/approve

4. Settlement: Either party calls settleAuction() → atomic swap

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🛠️ Technology Stack

Layer	Technology	Purpose
Backend	TypeScript, Express.js, Ethers.js	REST API, signature validation, blockchain integration
Smart Contracts	Solidity ^0.8.13, Foundry, OpenZeppelin	Settlement logic, security, ERC20/ERC721 standards
Patterns	MVC, middleware-based validation	Scalable and maintainable code design

Repo Structure

on_chain/
├── Marketplace.sol        # Core settlement logic
├── NiceERC20Token.sol     # Test ERC20
└── NiceERC721Token.sol    # Test NFT

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🧪 Testing & Verification

Smart Contract Tests (Foundry)

• ✅ testSettleAuctionByNFTOwner()

• ✅ testSettleAuctionByBidder()

• ✅ testInvalidSignature()

• ✅ testBidAmountLessThanMinPrice()

Status: All tests passing — verified on Sepolia

Deployed Contracts

Contract	Address
Marketplace	0xD55b5f702aE1DF6a4991D11e42238e5577BB97df
ERC20 Token	0xe51EFaD079B7c75Bd30210d21Fb286ca4556796E
ERC721 NFT	0xB00569a4817D84FBE713e72bb665b560f29a18F6

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💡 Key Technical Achievements

1. ⚙️ 85–90% Gas Reduction via off-chain auction coordination

2. 🔏 Signature-based Authorization with ECDSA validation

3. 🔄 Atomic Settlement ensuring swap finality in one tx

4. 🧱 End-to-End Type Safety using TypeScript interfaces

5. 🧰 Secure Contract Design aligned with OpenZeppelin standards

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🚀 Production Roadmap

• 🗄️ Integrate persistent DB (PostgreSQL)

• 🔔 Add WebSockets for real-time auction updates

• 🌐 Launch frontend dApp with wallet integration

• 🌉 Deploy to multi-chain (Polygon, Arbitrum)

• 💰 Add royalties (EIP-2981) and advanced auction types

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🧰 Setup

# Backend
cd backend && npm install && npm start

# Contracts
cd on_chain && forge build && forge test
forge script script/Script.s.sol:DeployScript --rpc-url $RPC_URL --broadcast --verify

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🎓 Learning Outcomes

• Blockchain architecture design (hybrid systems)

• Smart contract development and ECDSA cryptography

• Secure REST API backend integration

• Gas optimization and atomic execution patterns

• Type-safe cross-layer communication (TS ↔ Solidity)