How does the Asteroid Protocol inscription marketplace work?

In an exchange on Telegram, user @jessyjames7777 raised some great questions about the workings of the Asteroid Protocol’s marketplace, particularly focusing on its architecture and the process of trading NFTs. Mainly, @jessyjames7777’s was curious about how the inscription marketplace functioned in the absence of smart contracts.

In response, a core developer of Asteroid Protocol, @donovansolms, provided a detailed explanation, clarifying that the platform processes transactions off-chain, based on on-chain data. He emphasized the role of a centralized indexer in handling all transactions, which relies solely on on-chain transactions.

He went on to explain the process of buying or selling an NFT on Asteroid Protocol involves several steps. Initially, a user lists an NFT for sale by creating an on-chain transaction, with sale details inscribed in the memo part of the transaction. The indexer then verifies the ownership and values, temporarily changing the owner to “marketplace-v2” if the checks pass. When another user wishes to purchase the NFT, they must first make an on-chain transaction indicating their intent to buy, accompanied by a 0.01% deposit. This deposit is sent to the seller, and the transaction details are again noted in the memo field.

Once the indexer confirms the buyer’s ability to complete the purchase and the NFT’s availability, the NFT is reserved for the buyer. The buyer is then notified to proceed with the purchase, requiring them to send the remaining funds to the seller in a final transaction. The indexer’s final role is to check the transaction, verify the amounts and deposits, and, if all criteria are met, transfer ownership to the buyer.

This detailed response from @donovansolms sheds light on the unique architecture of Asteroid Protocol’s marketplace, demonstrating its reliance on a combination of on-chain transactions and a centralized indexer, offering a distinct approach to NFT trading. The explanation clarifies the process for potential users, highlighting the protocol’s efficiency and security in handling NFT transactions.