Update learn-nft.md. New content propopsal. #6538
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This update is an extensive rewrite and update to the general topic of NFTs and their role in the Polkadot ecosystem. This update is deliverable dictated by the Polkadot NFTMozaic mandate. This is the initial commit.
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| --- | ||
| id: learn-nft | ||
| title: NFTs | ||
| sidebar_label: Introduction to NFTs | ||
| description: The NFT Landscape of the Polkadot Ecosystem. | ||
| keywords: [NFT, non-fungible token, NFT 2.0] | ||
| slug: ../learn-nft | ||
| --- |
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Why you removed this? We need this part
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Removed it by mistake, after pasting spell-checked fixes in the block. The removal was not intentional. Beg pardon. I am aware, per instructions for submitting proposals and committing changes that this block must not be removed.
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| Every NFT has three common components irrespective of the chain it belongs to or originates from that make it unique. | ||
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| A Pokemon™ trading card of a Charizard is non-fungible with a card of Squirtle, whereas editions of | ||
| Charizard are fungible with each other. | ||
| - Identity | ||
| - Ownership | ||
| - Metadata | ||
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| Fungibility is a spectrum - what is fungible to some might not be fungible to others. In reality, | ||
| Pokemon™ cards, the canonical example of non-fungible assets are more fungible than US dollar | ||
| bills, each of which has a unique serial number that may be important to a government agency. The | ||
| cards have no serial numbers [1]. | ||
| Ownership is determined via a contract or a wallet address. | ||
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| /Clipboard01-d20f6eb9351e4f36a46e11fd87b53b2d.jpg>) | ||
| Identity can be defined via a property, address or a contract. | ||
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| Additionally, a digital item like a "purple magic sword" in a game may be fungible with another | ||
| visually identical sword if all the player cares about is the looks of their character. But if the | ||
| other sword has a different function, and that function influences the outcome of an adventure the | ||
| player is about to embark on, then visually identical swords are absolutely non-fungible. | ||
| Metadata can be a single reference to an off-chain object (digital asset or contract) or, in case of advanced NFTs, an elaborate data structure containing both on-chain data and off-chain references. |
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| Every NFT has three common components irrespective of the chain it belongs to or originates from that make it unique. | |
| A Pokemon™ trading card of a Charizard is non-fungible with a card of Squirtle, whereas editions of | |
| Charizard are fungible with each other. | |
| - Identity | |
| - Ownership | |
| - Metadata | |
| Fungibility is a spectrum - what is fungible to some might not be fungible to others. In reality, | |
| Pokemon™ cards, the canonical example of non-fungible assets are more fungible than US dollar | |
| bills, each of which has a unique serial number that may be important to a government agency. The | |
| cards have no serial numbers [1]. | |
| Ownership is determined via a contract or a wallet address. | |
| /Clipboard01-d20f6eb9351e4f36a46e11fd87b53b2d.jpg>) | |
| Identity can be defined via a property, address or a contract. | |
| Additionally, a digital item like a "purple magic sword" in a game may be fungible with another | |
| visually identical sword if all the player cares about is the looks of their character. But if the | |
| other sword has a different function, and that function influences the outcome of an adventure the | |
| player is about to embark on, then visually identical swords are absolutely non-fungible. | |
| Metadata can be a single reference to an off-chain object (digital asset or contract) or, in case of advanced NFTs, an elaborate data structure containing both on-chain data and off-chain references. | |
| Every NFT has three common components irrespective of the chain it belongs to or originates from that make it unique. | |
| - **Identity**: Defined via a property, address or a contract. | |
| - **Ownership**: Determined via a contract or a wallet address. | |
| - **Metadata**: Can be a single reference to an off-chain object (digital asset or contract) or, in case of advanced NFTs, an elaborate data structure containing both on-chain data and off-chain references. |
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I get 'Applying suggestions on deleted lines is currently not supported' on a commit (?)
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| What purpose does a unique digital asset provide? The answer to this question lies in the two distinct ways an NFT is utilized. | ||
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| The first is use of NFTs as a speculative store of value derived from its uniqueness (rarity, implied or intrinsic worth). This is the initial novelty aspect of NFTs that initiated an era of collectibles, tradeables and instantiated the appearance of the mass markets where NFTs were traded as a commodity. This is also recognised as the era of the simple NFT or otherwise known as static NFT. The Uniques pallet was created to facilitate this implementation of the NFT. |
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| The first is use of NFTs as a speculative store of value derived from its uniqueness (rarity, implied or intrinsic worth). This is the initial novelty aspect of NFTs that initiated an era of collectibles, tradeables and instantiated the appearance of the mass markets where NFTs were traded as a commodity. This is also recognised as the era of the simple NFT or otherwise known as static NFT. The Uniques pallet was created to facilitate this implementation of the NFT. | |
| The first is the use of NFTs as a speculative store of value derived from their uniqueness (rarity, implied, or intrinsic worth). This initial novelty aspect of NFTs initiated an era of collectibles and tradeable and instantiated the appearance of the mass markets where NFTs were traded as a commodity. This is also recognized as the era of the simple NFT, otherwise known as static NFT. The Uniques pallet was created to facilitate this implementation of the NFT. |
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"collectibles" and "tradables" are two categories (plural nouns). if we change the plural noun "tradables" to an adjective "tradable" the sentence sounds disjointed. We could, however, change it to "trading" as in "era of collectibles and trading". That would work nicely.
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| The inability to combine standards implicitly is a significant shortcoming to this approach and introduces a necessity to create custom implementations of contracts for specialized use cases where one might desire combined features. Each ERC which provides an advanced NFT feature is an isolated subset. As will be shown later this is not the case for Polkadiot native NFTs. | ||
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| To facilitate the creation of advanced NFT tokens, a blockchain must provide a mechanism for overcoming these limitations as we’ll see in the upcoming section. |
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| To facilitate the creation of advanced NFT tokens, a blockchain must provide a mechanism for overcoming these limitations as we’ll see in the upcoming section. | |
| A blockchain must provide a mechanism for overcoming these limitations to facilitate the creation of advanced NFT tokens, as we will see in the upcoming section. |
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as we will see --> which will be addressed
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| ## Cross-Chain Transfers | ||
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| Transfer of NFTs across chains is one of the most engaging issues in all of blockchain space. In terms of the mechanism through which a transfer of the NFT can occur on the Polkadot network, two distinct approaches exist: | ||
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| - Asset teleportation | ||
| - Asset reservation via sovereign account mechanism - derivative NFTs | ||
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| Cross-chain transfers within the Polkadot Substrate ecosystem are exclusively executed through the XCM (Cross-Consensus Messaging) system. This system provides native, trustless security at the protocol level, eliminating the need for external bridge solutions. The XCM implementation significantly enhances security by removing the trustful aspect of the transactions which are typically required by bridge architectures and represent potential points of failure and a security risk in cross-chain communication. | ||
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| NFT transfers can be decomposed into two independently transferable components: | ||
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| - core asset properties, consisting of identity and ownership data, and | ||
| - optional metadata attributes. | ||
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| In certain cross-chain operations, such as staking, complete NFT teleportation is unnecessary. This was demonstrated through a successful [XCM implementation between Unique Network and Acala](https://unique.network/blog/unique-network-cross-chain-nft-proof-of-concept-is-here/), where a derivative NFT was created on the Acala chain representing the original NFT from Unique Network. The derivative implementation required only core asset properties, as metadata transfer was nonessential for staking and collateral use cases where only identity and ownership verification are required. | ||
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| Bridging to and from Substrate chains and EVM chains takes much effort but is a highly desired | ||
| feature in the NFT industry. Merging the collector and customer base has significant implications, | ||
| so multiple projects focus on making this possible. | ||
| On the other hand, teleportation, i.e. a full transfer of identity ownership and metadata may be the optimal solution in the case of a full asset migration and the only available option for bridging mechanisms. | ||
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| Apart from RMRK (Substrate-to-Substrate seamless teleportation natively with [XCMP](learn-xcm.md)) | ||
| and Efinity (Paratoken), the following efforts are underway: | ||
| Bridging to and from Substrate chains and EVM chains takes much effort but is a highly desired feature in the NFT industry. Merging the collector and customer base has significant implications, so multiple projects focus on making this possible. |
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| ## Cross-Chain Transfers | |
| Transfer of NFTs across chains is one of the most engaging issues in all of blockchain space. In terms of the mechanism through which a transfer of the NFT can occur on the Polkadot network, two distinct approaches exist: | |
| - Asset teleportation | |
| - Asset reservation via sovereign account mechanism - derivative NFTs | |
| Cross-chain transfers within the Polkadot Substrate ecosystem are exclusively executed through the XCM (Cross-Consensus Messaging) system. This system provides native, trustless security at the protocol level, eliminating the need for external bridge solutions. The XCM implementation significantly enhances security by removing the trustful aspect of the transactions which are typically required by bridge architectures and represent potential points of failure and a security risk in cross-chain communication. | |
| NFT transfers can be decomposed into two independently transferable components: | |
| - core asset properties, consisting of identity and ownership data, and | |
| - optional metadata attributes. | |
| In certain cross-chain operations, such as staking, complete NFT teleportation is unnecessary. This was demonstrated through a successful [XCM implementation between Unique Network and Acala](https://unique.network/blog/unique-network-cross-chain-nft-proof-of-concept-is-here/), where a derivative NFT was created on the Acala chain representing the original NFT from Unique Network. The derivative implementation required only core asset properties, as metadata transfer was nonessential for staking and collateral use cases where only identity and ownership verification are required. | |
| Bridging to and from Substrate chains and EVM chains takes much effort but is a highly desired | |
| feature in the NFT industry. Merging the collector and customer base has significant implications, | |
| so multiple projects focus on making this possible. | |
| On the other hand, teleportation, i.e. a full transfer of identity ownership and metadata may be the optimal solution in the case of a full asset migration and the only available option for bridging mechanisms. | |
| Apart from RMRK (Substrate-to-Substrate seamless teleportation natively with [XCMP](learn-xcm.md)) | |
| and Efinity (Paratoken), the following efforts are underway: | |
| Bridging to and from Substrate chains and EVM chains takes much effort but is a highly desired feature in the NFT industry. Merging the collector and customer base has significant implications, so multiple projects focus on making this possible. | |
| ## Cross-Chain Transfers | |
| Transfer of NFTs across chains is one of the most engaging issues in blockchain. In terms of the mechanism through which a transfer of the NFT can occur on the Polkadot network, two distinct approaches exist: | |
| - Asset teleportation | |
| - Asset reservation via sovereign account mechanism - derivative NFTs | |
| Cross-chain transfers within the Polkadot Substrate ecosystem are exclusively executed through the XCM (Cross-Consensus Messaging) system. This system provides native, trustless security at the protocol level, eliminating the need for external bridge solutions. The XCM implementation significantly enhances security by removing the trustful aspect of the transactions, which is typically required by bridge architectures and represents potential points of failure and security risk in cross-chain communication. | |
| NFT transfers can be decomposed into two independently transferable components: | |
| - core asset properties, consisting of identity and ownership data, and | |
| - optional metadata attributes. | |
| In certain cross-chain operations, such as staking, complete NFT teleportation is unnecessary. This was demonstrated through a successful [XCM implementation between Unique Network and Acala](https://unique.network/blog/unique-network-cross-chain-nft-proof-of-concept-is-here/), where a derivative NFT was created on the Acala chain representing the original NFT from Unique Network. The derivative implementation required only core asset properties, as metadata transfer was nonessential for staking and collateral use cases where only identity and ownership verification are required. | |
| Teleportation, i.e., a complete transfer of identity ownership and metadata, may be the optimal solution for a complete asset migration and the only available option for bridging mechanisms. | |
| Bridging to and from Substrate chains and EVM chains takes much effort but is a highly desired feature in the NFT industry. Merging the collector and customer base has significant implications, so multiple projects focus on making this possible. |
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| Utility NFTs are at a very early adoption stage. | ||
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| - [1]: [Investopedia](https://www.investopedia.com/terms/l/liars-poker.asp) | ||
| - [2]: | ||
| [Unique Network's Chelobrick](https://unique.network/blog/chelobricks-making-waves-with-10-000-substrate-based-nfts/) | ||
| If you consider an NFT as an ownable, universal, digital encapsulation of data, NFTs have a role as significant as that of a smart contract. Real-world asset tokenization, tradable digital coupons, virtual digital keys and badges, bundles of utility, resource and accomplishment tokens, data wrappers… a likely advent of the era of discovery lays ahead. |
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| Utility NFTs are at a very early adoption stage. | |
| - [1]: [Investopedia](https://www.investopedia.com/terms/l/liars-poker.asp) | |
| - [2]: | |
| [Unique Network's Chelobrick](https://unique.network/blog/chelobricks-making-waves-with-10-000-substrate-based-nfts/) | |
| If you consider an NFT as an ownable, universal, digital encapsulation of data, NFTs have a role as significant as that of a smart contract. Real-world asset tokenization, tradable digital coupons, virtual digital keys and badges, bundles of utility, resource and accomplishment tokens, data wrappers… a likely advent of the era of discovery lays ahead. | |
| Utility NFTs are at a very early adoption stage. | |
| If you consider an NFT an ownable, universal digital encapsulation of data, it has a role as significant as that of a smart contract. Real-world asset tokenization, tradable digital coupons, virtual digital keys and badges, bundles of utility, resource, and accomplishment tokens, data wrappers… a likely advent of the era of discovery lays ahead. |
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I get 'Applying suggestions on deleted lines is currently not supported' on a commit (?)
Co-authored-by: Filippo <[email protected]>
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appart from the comments made here, is there any steps I need to take to advance the review to the next step? Is it on me to commit the changes? pls advise. I do not know what causes or how to resolve this issue: |
Co-authored-by: Filippo <[email protected]>
Co-authored-by: Filippo <[email protected]>
Co-authored-by: Filippo <[email protected]>
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This update is an extensive rewrite and update to the general topic of NFTs and their role in the Polkadot ecosystem. This update is a deliverable dictated by the Polkadot NFTMozaic mandate. This is the initial commit.