The Desert of the Real — Introducing getNFT Tickets
NFTs are all the rage at the moment. As is tradition in crypto the term ‘NFT’ is being massively overloaded. It is becoming harder and harder to distinguish a legitimate usage of NFTs with ‘going along with the latest fad’ NFT use-case.
The aim of this blog is to make clear that the usage of NFT technology by the GET Protocol to revolutionize smart ticket isn’t just window dressing.
By blockchain developer at the GET Protocol Foundation Kasper Keunen
Introducing getNFTs — Summary/TLDR
For almost half a year now the blockchain development team has been working a building a large scale custodial/non-custodial crypto-wallet infrastructure. Now that the wallet-stack is slowly moving into production, the next step in our mission of decentralizing event ticketing is coming into our cross-hairs; enabling true ownership of tickets.
At the moment basically every ticket that is issued worldwide is non-custodial and requires a significant amount of trust to use with confidence. Especially when you buy a ticket of a secondary market like Ticketswap or Viagogo. Ticket owners need to trust/be certain that:
- The QR code-ticket is valid to begin with (and that the meta data is correct)
- The previous owner of the ticket has resold the ticket once (trust you are the only owner)
- The ticket was priced correctly/fairly/honestly
Considering all these trust assumptions to simple own a ticket, it can hardly be surprising that the ticketing market is highly inefficient. Distrust is rampant. Middlemen rejoice! This is all about to change.
Introducing getNFT — Enabling true ownership of a unique and scarce digital asset; smart tickets.
Over the last couple of months we have been working hard on the infrastructure to start issuing NFTs for every ticket the GET Protocols sells. In the remainder of this blog I will go into more detail on why this makes sense, the efficiencies it provides and the possibilities it enables! Strap in this is going to be a wild ride!
Structure of the blog
- How GET Protocol rethinks ticketing
- What are non fungible tokens?
If you are already in the know about what NFTs are, skip this section. - How a getNFT cryptographic-ally encapsulate the right of entry
- How getNFT tickets compare to static tickets
- The value unlocks enabled by getNFT tickets
1. How GET Protocol rethinks ticketing
The ‘smart’ tickets as issued by the GET Protocol in various ways.
1. Issue self aware ticket (festivals, events, transportation, offices etc.)
To ensure validity, ticket assets should be aware whom owns them.
2. Allow ticket issuers to take control over the secondary market
To protect their fans, maximize profit or both. GET only provides the tools.
3. Registration of tickets in a transparent and immutable manner.
P2P markets only efficiently coordinate when buyers and sellers can trust each other.
4. True non custodial ownership of the ticket asset
With true non custodial ownership tickets become interoperable. This maximizes their liquidity and allows them to be securitized on the blockchain (enter DeFi).
The use of blockchain
Blockchain is only used when it is the right tool for the job. We do not apply blockchain just for the sake of it. While we believe in the merits of decentralization, a central driver for us is always commercial viability and thus adoption.
Blockchain tech, under the hood, for the masses
No added complexity for end users
The GET Protocol is focused on capturing market share in the traditional ticketing sector. Via its international network of local ticketing companies (integrators of the GET Protocol).
Usability is key
No ADE raver wants to worry about gas prices or ‘what was their nftIndex again’. All hashes, ERC20’s and seeds and wallet are all embedded in our easy to use applications. We have sold 500 000 tickets to primarily boomers this way, we got this.
The same will be the case for getNFTs. We will employ the ERC721 standard to make our smart tickets truly interoperable, liquid and experience enhancing.
2. What are non fungible tokens (NFTs)?
ERC721 tokens, more commonly referred to as Non-Fungible tokens (NFTs) have been used since early 2017. Non-Fungible tokens allow developers to tokenize ownership of any arbitrary data, drastically increasing the design space of what can be represented as a token(asset) on the blockchain.
The ERC721 Standard
Similar to other token standards the ERC721 standard outlines a set of common rules that all tokens can follow on the Ethereum network to produce expected results. Token standards primarily set the following characteristics about a token:
- How is ownership decided?
- How are tokens created?
- How tokens are transferred?
Use cases of ERC721
ERC721 is important for a number of reasons, particularly because of the new use cases it enables as well as its ability to be easily integrated into ecosystem infrastructure. Having a common interface for exchange and wallet operators to easily implement makes Non-Fungible tokens that much more valuable. Assimilation into the ecosystem makes them more liquid, increases price discovery, and allows anyone in the world to own Non-Fungible assets. Source: District0x
For those a bit more visually focused, check out the awesome explanation video below!
Features of NFTs
- Similar to other crypto assets, validating NFTs is easy.
- Each issued NFT can store unique data within their metadata field.
- NFTs are indivisible, only one address can own a certain NFT at a time.
- Rules in trading and transferring NFTs can be effectively set and enforced in an NFTs minting contract.
For those generally less interested or not technically inclined, just remember this in regards to NFTs:
NFTs allow for blockchain users to truly own, sell and buy unique digital assets.
3. Why pubic/private key cryptographic-ally enables non-custodial smart ticketing
Before we can properly discuss how the GET Protocol tokenizes the ticket asset, we need a proper definition of a ticket.
A ticket can be defined as the right to enter an area or venue during a certain time span. Tickets come into existence when they are issued in by the primary issuer, referred to as the primary ticket market.g
Ticket markets — Primary & secondary
The issued right of entry has both utility value for the current owner(the value of using the ticket) as well as a resale value(value of the ticket when resold). If — for a certain ticket owner- the resale value exceeds the utility value (note, this varies per person widely) the ticket will be offered for sale on a the secondary ticket market.
Now that we have established that a ticket is effectively a right — an asset that non-physical in nature. In addition we know that this asset is assigned different values for different people. Before diving into the composition of our ticket asset, let’s briefly explore how static tickets deliver this ‘digital right’.
The QR code —The original paper wallet seed
A QR code is a data format that can easily be interpreted by computers. In most cases QR codes encode a unique & secret URL. Only devices with certain authentication can successfully visit the URL endpoint and mark a ticket as validated.
In a sense, traditional QR codes are naked private keys. As merely sharing a QR code publicly will expose its secret message. Allowing anybody that has ever had access to that QR to utilize it . Even if the user isn’t the ‘official’ owner of the ticket. A static QR code is, evidently, static and thus cannot track who is the current owner of the ticket (and if multiple people own the same copy). In a way, a static QR code is ‘too dumb’ to enforce anything beyond encoding a string.
A static QR code ticket can only be used once. After validated, all other owners of the same QR code will now own a worthless asset (that was previously valid).
If the aim is to tokenize a ticket with an NFT, we need to be sure that the QR code can only be used by the owner of the getNFT.
Storing a secret in a public ledger
Blockchains are public ledgers. So it is not smart to store a secret QR code in the metadata field of an NFT. In order to encapsulate the right of entry within an NFT we will need a form of encryption only allowing the owner of the NFT to generate the QR code at the right time.
The type of encryption we are looking for is asymmetric encryption. Luckily, this is one of the most used types of encryption. For example, the green SSL lock you see in top corner of your browser is the product of such asymmetric encryption verification(SSL). The browser page as served to you right now is decrypted by your browsers private key (read more about SSL here).
Asymmetric encryption for ticket QRs
Tickets are a right of entry at a certain time. In order to ensure the getNFT retains its value when it is traded from wallet to wallet, it should only be possible to generate the QR after a certain time-lock (after which transferring the NFT should become disabled). Luckily this is the exact type of logic smart contracts are perfect for.
Ingredients for a getNFT to generate a QR code:
- A getNFT minted by a official GET Protocol NFT Factory Smart Contract
- The unique ticket identifier stored in the NFT at issuance(mapping to the ticket).
- The address of the owner of the getNFT at the time of the tickets activation
There are various ways the delivery of an getNFT could be approached. Encrypted QR codes could be published publicly or pushed directly to the smart phones of the NFT owning wallets.
TLDR benefits getNFT tickes
- NFTs enable true ownership of the digital asset that is the ticket.
- NFTs are transferable, making tickets truly safely transferable and shareable.
- NFTs can store metadata, effectively capturing resale-rules.
If you are more of a visual person, the diagrams below could be of some help!
How a getNFT becomes a QR code
Smart getNFT ticket
Traditional Ticket Static (PDF, screenshot)
Summary benefits of getNFT
getNFTs are indivisible, meaning that an getNFT can only be held owner by 1 address at the same time. This ensures that whomever owns a certain NFT will be the only one to decrypt the QR code.
By encrypting the QR code seed with the public key of the owner of the NFT at activation, the GET Protocol ensures that only 1 wallet will be able to generate the QR code.
In other words getNFTs allow a ticket to become personalized, without the owner having to show their ID card to a bouncer.
4. How getNFT tickets compare to static tickets
Before declaring victory over the status quo, it is important to critically compare the getNFT to the current dominant alternative; the traditional static QR code.
Categories of comparison
- Validity
The certainty the owner of an ticket has that it can be used to enter the event. - Verifiable
Is it possible for a buyer/seller to check or demonstrate a ticket is valid. Can the fairness of a tickets offer price be verified? - Transferable
The extent to which it is possible to transfer a ticket to a new owner. - Transparency
Can it be known who owns the ticket? Is it possible to figure who has owned the ticket in the past? - Identity + Identifier
Is there a way to check who owns an asset? Is there a way to detect when an asset has changed owner? How trustworthy is the identifying mechanism?
The degradation of the static QR code
Even though a static QR code is consistent in the data it encodes, it is inconsistent in the asset-types ability to retain validness and fan/owner data. Only the primary buyer of a ticket can be certain of its validity. For the issuer the primary buyers data is the only data they will ever touch.
As the ‘private key’ of a static QR is visible from the start it can be copied, transferred, shared and leaked. All without detection.
The immutable ledger of the getNFT
getNFT tickets are registered on ‘the blockchain’. Owners can easily be identified by the public address of the owner of the getNFT over time. This identification metric is rather robust as it relies on cryptographic seeds. An getNFT owner can prove to a potential seller (or smart contract) they own a ticket without exposing anything of value.
A very biased conclusion
As the getNFT can only be decoded by 1 private key seconds before the event starts, there is no doubt about its authenticity. A ticket tokenized by this technology will be far better able to retain its secondary market value because of this.
Granted, leaving 60 year old QR technology in the dust is not necessarily impressive. A lot of ancient (but widely adopted) standards can be improved with the benefit of hindsight.
The main pitch the static QR code has going from it comes from the fact that is so are widely accepted and that transferring it is so easy and friction-less (this feat also causes rampant scalping and fraud, but still, friction-less is nice).
The GET Protocol isn’t suggesting to retire the QR code (as there is nothing wrong with this data standard). GET only offers a blockchain fueled tool-set that delivers the QR code to the owner of the ticket in a timely and crypo-graphically secure manner.
5. The huge opportunity that getNFTs unlock
Due to this dynamic buyers of these secondary market tickets will be unwilling or skeptical to buy a ticket of a stranger (or person with no reputation).
This distrust is perfect for middlemen platforms as Viagogo, TicketSwap and Seatwave. As these platforms can act as an escrow (holding on to money is a great business) between distrusting buyers and sellers. The secondary ticket markets are booming business where billions of dollars are earned every year.
The secondary ticket market($15.6B) is worth 1.5x more than all the value locked in DeFi at this moment ($10.96B)
A huge market to conquer
If we include the primary ticket market (that is also serviced by getNFT) this balloons to $46.6 billion. Surely capturing this market will not occur in a fortnight, but we can surely conclude there is enough opportunity and efficiency to capture.
Merging the primary and secondary market getNFT on-chain
Instead of having people trade (possibly fake) private keys QRs P2P, the GET Protocol merges the primary and secondary market. A buyer of a ticket isn’t aware if they are buying a ticket (getNFT) from the primary issuer or from a secondary seller. As the market is merged, buyers and sellers can be protected and scalping and other unwanted behavior can be made impossible.
Guaranteed Liquidity — The getNFT AMM
In earlier blogs we have discussed the illiquidity of the secondary ticket market. The diagram shown below in this paragraph is a lot to take in all at once. In later blogs and technical documentation we will go into more depth on how we will be executing this vision.
For now, lets focus on the potential and the general mechanics. To understand the diagram it should be ‘read’ from left to right.
getNFT AMMs step-by-step
- At the initial sale the ticket issuer sells a portion of the total inventory to ‘primary getNFT buyers’. A portion of these primary market buyers end up (at some point) putting their getNFTs for sale in the merged primary/secondary market.
- All getNFT supply (from primary & secondary sources) that are offered on the a unified market. Each seller can have a different intention and risk-preference. All ticket supply(from both primary + secondary sources) is merged into the getNFT AMM trading smart contract. The rules of this NFT trading contract are configured by the ticket issuer.
- The sale price as set by the owners of the getNFT is processed using the pricing and rules configurations of the issuer. This proces results in a homogeneous getNFT price and inventory or ticket buyers (similar to how there is 1 price in an Uniswap AMM).
- Similar to how Uniswap works, ticket buyers/sellers on the open market can only ‘market buy/sell’ a ticket(getNFT) for the current price set by the bonding curve in the AMM. There is no way for a ticket buyer to target a certain getNFT sell order specifically. getNFTs can only be transferred traded via the contract (P2C model).
- When a getNFT of the ticket supply is sold, its proceeds (in stablecoin) are spread over ticket (re)sale-vaults (A,B and C in this case).
How many vaults there are and how they are configured is once again determined by the issuer of the tickets.
6. The shares of getNFT Proceed Vaults can be traded on the open market. At initialization the getNFT Proceed Vault shares are distributed over those that have put their getNFT for sale in the getNFT AMM.
GET Protocol stake holders (people that own GET, stake GET) are able to participate/invest in the getNFT Vaults.
I fully understand that after reading all these novel and scarcely explained concepts might be a bit much. In the upcoming months more information, blogs and documentation will be released on how the nuts and bolts of the getNFT AMM work.
We have a lot to look forward to!
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