What Is Algorand and Why You Should Choose It for NFTs

Published in

Coinmonks

5 min readJul 19, 2022

As NFTs mature, there has been an increased demand for technologies and tools to ease their mass adoption. The most pressing issue right now is Ethereum’s high gas fees, which place a high barrier to entry into NFTs for creators and collectors alike.

As a result, many people seek alternative blockchains to remedy this situation. The Algorand blockchain is one of these emerging solutions, and in this article, you will discover how NFTs work on Algorand.

This guide will help you understand how NFTs work on the Algorand blockchain. We will talk about:

NFT Tokens
NFT standards on Algorand: Similar to ERC-1155 or ERC-721 on Ethereum
Storage: Where to store media (images, audio, video) and metadata
Minting an NFT on Algorand
NFT marketplaces/tools on Algorand

Why Algorand?

Algorand positions itself as an environment-friendly blockchain that allows for the simple creation and launch of NFTs. However, unlike EVM-compatible blockchains like Ethereum and Polygon, there are multiple ways to create an NFT on Algorand. We will discuss some of them in this article, including some best practices you can adopt.

Understanding NFTs on Algorand

On Algorand, you create an NFT using an Algorand Standard Asset (ASA) — You do not need a smart contract for a simple NFT, but customized behavior like royalties and others will warrant one. An ASA is characterized by :

ID
Creator (required)
AssetName (optional, but recommended)
UnitName (optional, but recommended)
Total (required)
Decimals (required)
DefaultFrozen (required)
Asset URL (optional)
MetaDataHash (optional)

This is the information you provide when creating an ASA (except for the ID generated for you), and it cannot change after creation.

With this in mind, a Pure NFT is designed as an ASA or asset with the Total number of units set to 1 and the Decimals set to 0. When creating this unique type of ASA, you are minting an NFT.

Algorand NFT Standards: ARC03 and ARC69

NFTs are relatively new to Algorand and constantly being improved. Algorand supports two frameworks for creating NFTs, ARC03, and ARC69. Think of these as guidelines that allow your NFT to be compatible for viewing and trading on marketplaces.

New to trading? Try crypto trading bots or copy trading

ARC03 was the first NFT standard, allowing NFT metadata (name, description, link, traits) to be stored off the Algorand blockchain. This works by uploading your metadata JSON file to a server (centralized storage) or IPFS (decentralized storage), and then you put this link into the Asset URL field when minting the NFT.

This way, any website displaying the NFT knows to get the media link from the external_url field of metadata.

However, the first implementations of NFTs on Algorand did not look like this. This is because Algorand allows for a straightforward way to mint an NFT by putting the NFT media link (e.g., jpg) directly into the Asset Url field when minting the NFT. As you can imagine, this method has some drawbacks — for example, there is no means of adding attributes or any metadata.

This was one of the greatest motivations for ARC69. ARC69 complements ARC03 by allowing assets to have metadata stored on the Algorand blockchain. A question on your mind would be — What standard do I use? My short answer will be that you use both. Remember that the two standards are not mutually exclusive. However, ARC69 is gaining much ground and is the preferred option for many creators.

NFT Storage

When working with NFTs, it is essential to understand where to store what. But before that, let’s talk a bit about what needs storing in the first place. As I already mentioned, an NFT is an Algorand asset (sometimes with a smart contract) and hence lives on the Algorand blockchain. With NFT metadata and media, storage is more flexible.

Your metadata, which describes the characteristics of your NFT, can be on-chain (with ARC69, for example), on a centralized server, or on decentralized storage like IPFS. For their part, media files like images, audio, or video are a bit heavy for the blockchain and generally go on a server or IPFS.

Note: IPFS is the most popular storage option for metadata and media because it is decentralized.

Minting an NFT on Algorand

Now, let’s talk about minting. There are numerous ways to mint an NFT. No matter how, the basics are the same, which will be my focus. After understanding those, you will hopefully be confident enough to mint your NFT on Algorand.

Suppose your friend Omair, a digital artist, reaches out to you and asks for help setting up an NFT. Naturally, you would be happy to help him and decide to set up his NFT on the Algorand ecosystem using the following steps.

You set up an Algorand wallet for Omair — ideally, he will do this himself for security reasons.
Then, you get information on the art and prepare an ARC69 metadata JSON document.
Next, you upload the image to IPFS.
Finally, you mint Omair’s NFT on a marketplace.

Taking into consideration everything we have discussed, this should make complete sense. I understand if there are still a few gaps, but that will no longer be an issue after checking out these resources.

Mint your first NFT with AB2 Gallery (A non-technical approach)
Minting NFTs on Algorand programmatically (Technical approach)

What Are NFTs Without Marketplaces?

Since NFTs are relatively new on Algorand compared to Ethereum, NFT marketplaces/tools are also new. Despite that, watching these projects grow and mature in the space is incredible. Here are a few worth checking out.

NFT Explorer — https://www.nftexplorer.app/
AB2 Gallery — https://ab2.gallery/
Algomart — https://github.com/deptagency/algomart
Rand Gallery — https://www.randgallery.com/algo-collection/

With this understanding of NFT standards, storage, minting, and tooling, you have all the knowledge you need to start navigating the waters on Algorand. There is still a lot that I didn’t cover in this guide, but understanding those wouldn’t be a big issue once you are okay with everything we discussed here.