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NFT -- the cornerstone of encrypted digital assets

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As the concept of data as an asset deepens, more and more digital assets will be presented in the form of NFT, and we will eventually have a digital economy that is as smooth as milk.

Original title: "technology sharing" NFT -- the cornerstone of encrypted digital assets"
Source: DegameLabs

takeaway

Nearly two years have passed since the cryptokitties craze exploded in late 2017, bringing with it the ERC721 protocol and exposing people to the magic of NFT.This paper will make a comprehensive interpretation of the value points, application scenarios and technical aspects of NFT, and make a comparative analysis of the mainstream NFT asset standards.

What is NFT?

NFT called the non - fungible Token, Chinese name is not the homogeneity. Our common Token (such as BTC, ETH, etc.) is homogeneous, there is no difference between each BTC (just like two pieces of 100 RMB), can be exchanged and divided. As it happens, we posted an article about NFT a few days ago, arguing that bitcoin is non-homogeneous. Contrary to the view of this article, please click to read more detailsWhat if your visa is an NFT?) and the important characteristics of NFT are: each NFT has a unique and unique identity, non-interchangeable pairings, the minimum unit is 1 and indivisible.

In cat fetish, each cat corresponds to an NFT on the chain, with a unique id and gene, and, more importantly, an independent value. The secondary market for cat fetish is very active, with the most expensive cat selling 750,000 RMB, which also proves that the value of virtual goods in the form of NFT has been recognized by the market.

Picture: cat fetish

The obsession with cat games is revolutionary for the proposition and practice of NFT -- value can be carried not just in cryptocurrency, but in a whole new and unique way.

The value of NFT

We know that money is essentially a general equivalent, a vehicle of value consensus. In the modern world, an individual's wealth is no longer measured by the amount of money he holds, but rather by the assets he owns. These assets include, but are not limited to, houses, cars, stocks, bonds and other items of market value. For the average individual in a modern society, assets tend to carry far more value than their cash holdings.

However, real-world assets tend to have two drawbacks:

1. Most of the real assets are very illiquid;

2. Anti-counterfeiting costs are high, and some heavy assets need to be centralized and confirmed. For example, the confirmation of property rights needs to rely on the housing authority registration; It's hard to prove you own something until you see it;

In the blockchain world, we have cryptocurrencies to represent the assets of currency attributes, and naturally we need a value medium to represent non-monetary assets, so NFT emerges at the right moment. Thanks to the features of block chain, such as decentralization, tamperability and cryptographic right determination, NFT solves a series of problems of assets in the real society:

Better liquidity, efficient, atomic trading;

Cryptography confirms the right to forge assets.

In addition, NFT achieves features that cryptocurrencies cannot, such as representing negative assets (liabilities), proof of identity or equity, and virtual items. NFT fills the gap in cryptographic assets, allowing us to include assets of independent value in the cryptographic economy and secure blockchain protection.

However, in empowering the real economy, we also find that NFT is currently facing problems: the problem of mapping the value of physical assets is simply "value up chain" -- how to convince participants that this NFT represents the assets committed by its owners, and how to prove it? Who will endorse it? We believe that most of the current physical assets themselves are a centralized asset, so before NFT can get consensus, its value chain has to rely on the endorsement of the central institution. For example, if the property is to be linked in the form of NFT, then we still need the housing authority to endorse the value of such NFT under the current system.

But we also need to point out that NFT is a data protocol, it is hosted by a chain, it flows on the chain, it is encrypted and it is secured. Nor does the business it applies to necessarily need to be decentralized.

Application scenarios of NFT

NFT can represent the digital assets themselves, but also can be used to represent a special purpose of proof (property ownership certificate, passport, tickets, coupons, etc.), so its use scenarios are extremely wide. I will focus on the applications of NFT in games and collectibles.

Game props

In a broad sense, game items include all relevant assets owned by the players in the game. All of these assets have one thing in common: the player must acquire them through game behavior, or buy them through money.

Game props are very suitable for NFT to represent the form of data. On the one hand, the game props are produced on the chain and used on the chain. The game scene provides value support, avoiding the central link of "value chain". On the other hand, most of the game's equipment and characters are unique and can flow freely, which is consistent with NFT's characteristics. In addition, NFT's game props can also be used for the confirmation and reuse of rights across scenes, costumes and even games, so that the game assets themselves are no longer limited to an island, but may become a truly universal hard currency within the ecology.

Cryptocat team's new character is NFT

As the largest NFT trading market, OpenSea has access to more than 100 NFT trading products, most of which are freely available game items and hero characters. Thanks to the features of blockchain and smart contracts, the trading of game items no longer requires in-game delivery for online payments, as it did on 5173 platforms in the past. After adopting NFT, it can realize instant payment and delivery to the intermediary, which greatly improves the liquidity of virtual props and the user experience of prop trading.

MyCryptoHeros NFT game items with heroes

The collection

NFT can represent some collectibles ownership.

Collectibles have two characteristics: uniqueness and unforgerability. In the centralized network world, it is difficult to use a digital medium to properly represent such assets. NFT fills the gap. For example in the field of art, we can be the ownership of the calligraphy and painting, sculpture and other art assets, stored in a block in the form of NTF chain will entity deposit in the center of some strong trust institutions (such as museums, vault, etc.), can be implemented in the case of do not need to contact the real transfers of approval and trading, certification, etc. We can even securitise art as a more liquid investment

In December, 19, coon released a series of limited edition NFT based on ERC1155 agreement, which was also the first NFT in the industry mainly carrying brand value. The following figure is a partial list price for this class of NFT in the OpenSea trading marketplace at the time of writing. The cheapest is around 0.075ETH (about 73 RMB), while the most expensive transaction price is as high as 23.8ETH (about 22,900 RMB). It can be seen that the value support of NFT as collectibles can be derived from brand premium and its own scarcity, and highly recognized by the market.

Opensea currency Ann NFT trading market

NFT, with the highest price recently

NFT's main protocol standard

ERC721

Born from cryptokitties, ERC721 protocol is the first NFT protocol recognized by the ethereum community and the most widely used standard. It defines the four key metadata of NFT: ID(global ID), NAME(NAME), SYMBOL(SYMBOL), and URI(uniform resource identifier), which have become the metadata basis for various NFT protocols that have emerged since. The protocol interface of ERC721 is similar to that of ERC20, which can realize the issuance, transaction and authorization of NFT and basically meet the needs of block chain business.

However, ERC721 has a fatal flaw that is limiting its popularity - a contract can only issue one NFT asset. In addition, sollions has no good plan to manage assets under different contracts easily, which makes ERC721 difficult for complex game scenarios (there may be thousands of different types of items in a game).

ERC1155

ERC1155 is a NFT asset protocol proposed by Enjin for game scenarios. It differs from ERC721 mainly in the following three aspects:

1. Any kind of NFT assets can be issued in the same contract, and multiple assets of different kinds can be packaged and traded. This saves users a lot of transaction fees and optimizes the experience.

2. By id the split scheme can simultaneously characterize FT (Fungible Token, such as BTC, ETH) and NFT. This is useful in game scenarios, such as representing some stackable consumables (blood, blue, etc.) that are themselves homogeneous.

3. Remove the NAME and SYMBOL fields from the metadata, leaving only the ID and URI. This reduces the ability of ERC1155 to describe itself and transfers the power to describe assets to the upper level, where Dapp can customize the parsing logic for URI fields as needed. For game scenarios, it's worth sacrificing decentralization for convenience and extensibility, which allows developers to reuse NFT items for different business scenarios.

By design, ERC1155 values the lightness and interoperability of NFT. In the case of Enjin's implementation of ERC1155, the whole id field is directly used to represent the type of FT, while the specific meaning of id is left to the upper level.

EOSIO.NFT

Eosio.nft is the NFT asset standard on the block chain of EOSIO, which originates from the community team and is also the standard widely used at present. Eosio. NFT retains the four metadata fields of NFT: id, name, uri, symbol, and can issue any kind and any number of NFT assets in a contract, which is a very common NFT asset standard. However, it suffers from data redundancy and the inability to transfer NFT in bulk in a single contract call.

OASIS.ASSET

Oasis.asset is part of THE OASIS, a set of cross-game, cross-contract NFT ASSET transfer protocols developed by DegameLabs LABS for games. We draw on the experience of the above three NFT asset protocols and develop a new common asset protocol. Developers can use oass.asset to distribute FT and NFT of any kind and in any quantity.

Oass.asset issues only three metadata: UUID, URI, and SYMBOL. Uris carry the burden of meaning resolution for NFT assets. We have designed a concise URI format for game scenarios that maximizes and maximizes information about NFT assets (this is optional, and we are working on adopting PPK& ODIN protocol to design URI formats.

Oass.asset, like ERC1155, transfers the more specific NFT ASSET description capabilities to the next level, but it provides the upper level with richer meta-information, enabling scalability while being self-describing. This section of the design documentation is available on Github.

When oass.asset is used with oass.world and oass.main, the transfer of NFT assets across contracts can be realized, that is, an NFT of contract A can be transferred to the storage in contract B, and the confirmation, anti-counterfeiting and location tracking of the whole process can be realized. This is a departure from THE usual approach to asset reuse in THE past (that is, invoking THE same contract) - in THE OASIS, developers can customize and deploy their respective contracts on demand, customize THE mapping logic, and freely choose which assets to receive or transfer. This not only eliminates the central risk of the contract itself (Bug, hacker attack), but also makes it more flexible to adapt to the development needs of different businesses.

THE OASIS protocol is currently in development and has been adapted to ethereum and EOSIO blockchain, and we will be open source and free for THE community to use when appropriate.

The future of NFT

DegameLabs has long believed that the encrypted digital economy is made up of NFT and FT -- the blood that flows, the building blocks of resilience.

How to use NFT correctly? We believe that we should follow the concept of layering: at the bottom of the data, NFT should be immutable -- once issued and unchangeable, it should always be guaranteed the security of the asset itself. In the application layer, the description logic of NFT is mainly formulated, that is, how to correctly identify NFT. This set of identification logic can be centralized, which is justified, because it constitutes a different application scenario of the same NFT, which is called "asset reuse".

I believe that with the deepening of the concept of data as assets, more and more digital assets will be presented in the form of NFT, and we will eventually usher in a world of digital economy as smooth as milk.

Source:weixin.qq.com

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