In the past, it used to cost us almost nothing to create an item in the digital world. Therefore, these items become worthless, because it is not difficult to create. However, with the advent of blockchain, the scarcity in the digital world has begun to take shape and connect part of the real world with the virtual world.
NFT is one of the key cornerstones of the new blockchain-powered digital economy. NFT has been and is being tested in many areas such as gaming, digital identity, licensing certification, and fine arts. Users can even split and own proportionally high-value items.
In this article, we will discuss about:
• What is NFT? Origin, characteristics, value and application of NFT in the Crypto world.
• Criteria for evaluating a potential NFT project.
• Some common misunderstandings about NFT.
What is NFT?
NFT stands for Non-fungible Token, which is a unique token and cannot be replaced by other tokens. This can be a virtual asset or a digital version of a real-world asset. Since each NFT is unique and they are NOT interchangeable, they can act as proof of authenticity and ownership in the digital realm.
For example: When owning Fungible Tokens , you can trade or exchange with others because their values are equivalent.
But Non-fungible Tokens represent different collectible items or assets, so NFT is widely used by artists, illustrators or game developers to tokenize products. your products and make them unique.
Origin of NFT
During the 2 year downtrend of the Crypto market (2017 - 2019), the best that projects can do is focus on building and creating real products with real value, this is exactly what the top NFT projects have strived to do throughout the past cycle.
Decentraland (MANA) raised $20 million in 2017 and successfully launched its platform in 2020. Nearly all of Decentraland’s trading volume is done on Cryptovoxels - a self-powered platform. powered by financial revenue from the sale of digital lands.
We can see that the crypto ecosystem as a whole has just made another leap in infrastructure during this downtrend. Remember 2017: All you could do was join a project on Ethereum when MetaMask was just getting started.
And now what we have is:
• Stablecoins: Coins born for the purpose of price stability.
• Non-custodial Wallet: A non-custodial asset storage wallet.
• Fiat On-ramps: A cryptocurrency exchange that allows cash to be deposited into the system and converted to cryptocurrencies.
• Fund Management Platforms: Fund management platforms.
• Decentralized Storage Solution: Decentralized storage solution.
• Digital Identity Providers: Digital identity providers.
It can be seen that a strong boom has occurred because in the previous years, none of the names mentioned above was known or mentioned.
With the amazing applications and impressive returns that DeFi ( Decentralized Finance ) brings, Ethereum is starting to see a new cycle in user behavior that has been reflected many times before in the Crypto market. The market is overblown and people are willing to throw more money into this ecosystem.
The growth of NFTs at this infancy is just beginning and has been accelerated by the initial high excitement.
Properties of NFT
Because NFTs are a way to store files on blockchains, they possess the basic characteristics of blockchain tokens in general and NFT characteristics in particular:
• Uniqueness: These tokens are unique, even if other people create identical files they will still be different from previously created files.
• Perpetuity: The existence of these tokens is permanent, along with the information in that token such as messages, photos, sounds, or data, …
• Programmable: NFTs are also lines of code on the blockchain, and the author of the NFT can always be verified, regardless of how many owners the work has been.
• No licensing required: This is a feature of the NFT type. If the NFT was created on top of an open blockchain network, the NFT also inherits the network’s property of being arbitrarily accessible.
• Ownership: NFT holders have full discretion to own and use the NFT.
How does NFT work?
First of all, we need to understand that NFTs are seen as collectibles or paintings, not as tokens with lots of incentives to increase buy demand.
Therefore, NFT valuation is like valuing a real-life precious item, whoever feels it has a price, it will have a price.
Example: There are many abstract paintings worth several thousand dollars but very few people understand what it really means.
NFT Token Standards
Talking about the issuance standard, usually in the Ethereum blockchain, the tokens are popular in ERC-20. But in NFT, many standards are applied, and the most prominent are ERC-721 and ERC-1155:
• ERC-721: For each new NFT token, the developer has to deploy a new smart contract, which wastes resources and takes time to build. Applications: CryptoKitities, CryptoPunks,…
• ERC-1155: This is a newer generation of improvements, but not yet popular. With ERC-1155, a developer can generate both Fungible and Non-fungible tokens in a single smart contract and can generate an infinite number of tokens on a single contract.
In B Chain, BEP-721 and BEP-1155 will be used, similar to the Ethereum system.
NFT Storage Wallet
Like other tokens, NFT can be stored on personal wallets, typically Coin98, Metamask, Trust Wallet ,…
It should be noted that the NFT cannot be copied or converted without the permission of the owner - even by the issuer of the NFT.
The value of DAOlaunch NFT
• Gold DAL Spinning Coin NFT = Gold Tier Allocation once a month
• Silver DAL Spinning Coin NFT = Silver Tier Allocation once a month
• Copper DAL Spinning Coin NFT = Copper Tier Allocation once a month
Trade/ Auction/Lending of VC series on NFT marketplace