The Oasis Guide To NFTs
Introducing our new NFT grants program
Over the years, the concept of ownership has evolved to not only include physical assets, but digital ones too. However, proving digital ownership and authenticity has had its challenges, and many of the web platforms that give you access to digital content simply do not allow for ownership and control of those assets. And that’s just part of where the world of NFTs comes in.
NFTs have an incredible amount of utility and real world value, and this explains their meteoric rise in such a short time. What was once an often overlooked market, has since grown from $30 million in 2017 to over $300 million at the end of 2020, with no signs of slowing down.
In this NFT guide, we’ll explain exactly what NFTs are, why you might want to own one, how Oasis is bringing a new level of innovation to the NFT space and even how you can get support from Oasis to develop the next generation of NFT infrastructure, dev tools, and applications.
Before we start, here’s a quick reference of key areas within this guide:
- What Are NFTs?
- How NFTs Work
- The Benefits of Owning an NFT
- Where to Buy and Trade NFTs
- Oasis and Privacy Preserving NFTs
- The Oasis NFT Grant Program
Our hope with this guide is that you walk away with a well-rounded understanding of the NFT world, where it’s heading, and how to be a part of it.
What Exactly Are NFTs and How Do They Work?
NFTs, otherwise known as, non-fungible tokens, are essentially digital collectibles and typically have four main attributes that make them unique and valuable.
- They can’t be replicated, as they are created using smart contracts.
- They are permanent, because they continue to exist as long as the blockchain they are on exists.
- They can’t be counterfeited, because they are publicly viewable and verifiable.
- And they have provable ownership, because you can see which wallet address holds the NFT in question.
At the core of NFTs is their non-fungibility, so one of the keys to understanding NFTs is knowing the difference between fungible and non-fungible assets. Fungible tokens are perfectly interchangeable. For instance, you can trade one US Dollar for another, and to the average person it really doesn’t matter which dollar they own. A dollar is a dollar, so to speak.
Non-fungible, on the other hand, describes something that is not easy to mix or exchange with other assets, being that they are each so unique. For instance, if you think of something like the famous Mona Lisa painting, this is something that is extremely unique, and cannot truly be replicated or easily exchanged for another painting. That is what makes it a non-fungible asset.
Non-fungible tokens that exist on a blockchain work in a similar way. They are unique, have a provable owner, and cannot be copied the way you might copy a simple document on your computer. But how do NFTs work exactly? We cover that in the following section.
How NFTs Work
The vast majority of NFTs today exist on the Ethereum blockchain. Most people are familiar with the ERC20 standard, however most NFTs minted on the Ethereum network are issued and traded using the ERC721 standard.
So going back to our definitions of fungible and non-fungible, the ERC20 tokens are fungible, and the ERC721 tokens are non-fungible, so these tokens are not the same — meaning one is not easily interchanged with another. NFTs, true to their blockchain roots, are permissionless, so anyone can create, buy, trade or sell an NFT, which is one of the attributes that make NFTs so powerful and has helped this area of crypto to gain such wide acceptance.
And just like your fungible tokens, your NFTs can be sent to your crypto wallet and stored, and they exist on a blockchain address. As we’ll get into in the next section, in addition to NFTs being stored, they can be traded and used to prove ownership of physical assets, as well as a plethora of other use cases.
Why Own an NFT?
The big question most people ask when introduced to the concept of NFTs is “why would I want to own one of these?” It’s a good question, however the answer isn’t one-size-fits-all being that NFTs have so many use cases. From Twitter CEO, Jack Dorsey, selling his first ever Tweet as an NFT, to the famous artist, Beeple, selling an NFT for $69 million, and the tokenization of health records and real-estate, NFTs can be used in a wide array of applications, which we’ll cover in this section.
Truly Owning Your Digital Assets
For the first time in history, you can actually truly own your digital assets. Unlike most services on the web where you are simply renting the use of assets (think Netflix for movies, or Spotify for music), with NFTs you truly own the assets. This means you can freely move your digital assets from one platform to another, store them the way that you want, and no one can take them away from you — including the original digital creator of that NFT.
NFTs in the DeFi Space
One of the most exciting use cases for NFTs is their use within the DeFi space. Currently, the vast majority of DeFi lending protocols are collateralized and as such, NFTs can be used as this collateral. For instance, you would be able to put up your NFT as collateral and borrow money against it, the same way you could put your home as collateral for a loan from the bank. This particular area of NFTs continues to evolve and has an incredible amount of potential to widen the reach of DeFi services to those who really need them.
You Can Trade Them
One of the most common uses of NFTs at the moment is inside of games where you can buy and trade them. CryptoKitties is a really popular example of a game that actually saw so much traffic from NFT trading at one point, that it clogged the entire Ethereum network. Digital trading cards are also another popular example of trading NFTs. Big corporations have even entered the space offering video clips and pictures as NFTs that trade upwards to $250,000 for a single digital card.
Another powerful use-case for NFTs is in the area of tokenization and enabling an ownership economy. For instance, in some places of the world it is difficult to prove the ownership of your home or land. In cases like this, NFTs can act as a public and immutable record of who truly owns the asset, which can prevent illegal seizures of property.
Another example comes from a Nike Dior collaboration, where Nike produced a limited-edition sneaker. Since one of the biggest problems in the sneaker collector world is counterfeits, Nike decided to attach an NFT to every sneaker to prove its authenticity. An example like this can extend well beyond fashion, as tokenized data can be used to authenticate health records, DNA, real estate, vehicles, and just about any physical asset that you can think of.
Self Expression, Just Like With Physical Assets
Just like with physical collectables, NFTs act as a means for people to express their individualism and identity, and also act as a means of exchange for people that want things that are difficult to counterfeit. The famous entrepreneur Gary Vaynerchuk was even cited as saying that one day, similar to how people might view your Instagram or LinkedIn account to get a sense of who you are, people will view your public address containing all your NFTs to get a sense of who you are.
Royalty Income Stream For Creators
NFTs are incredibly empowering for creators because they allow the creator to earn royalty income on the trading of their NFT in perpetuity. For example, if a musician creates a song and turns it into an NFT, then sells that song for $100, they can earn a percentage of that $100 sale as a royalty. Then, if in 5 years, for instance, the song is traded for $500, they can earn a percentage of that $500 trade too — and so on. Being that we live in a world where artists and content owners typically don’t have power and control over their content once it’s sold, this provides a whole new use case for income earning potential.
This Is Just the Beginning
NFTs are seemingly everywhere right now, having permeated the worlds of art, sports, real estate, health and more — but in many ways this is still just the beginning. There are many more use cases and improvements that can be made within the NFT space, and as we’ll describe later in this guide, Oasis has its finger on the pulse of this innovation.
Where To Buy and Trade NFTs
Two of the most popular places to get NFTs are Rarible and OpenSea, because you’ll find a wide variety of NFTs on these platforms. You can find everything from paintings, GIFs, domain names, trading cards, virtual land, and so much more. Decentraland is another interesting platform that allows users to buy tokenized virtual land, and monetize it in any way they see fit. Decentraland is one of the busiest NFT platforms and is leading the way in the virtual land space.
Outside of these major marketplaces, you have celebrities, entrepreneurs, and companies offering NFTs through their platforms. Gary Vaynerchuk offering NFTs through his VeeFriends platform, the NBA offering moments through their Top Shots platform, and even the likes of Time Magazine offering special edition covers as NFTs are just a few examples of the variety of tokens you can find.
If you’re looking for a comprehensive list of NFT marketplaces, the list of top NFT platforms on Coinmarketcap is a great place to start.
The Oasis NFT Grant Program and Taking NFTs To The Next Level
The current NFT market typically relies on buyers accepting that there might be many copies of their digital asset, but that they own the “original” instantiation of that asset. This works for digital art, but if you’d like to mint an NFT for say, your bank account or private health data, others being able to openly view and copy it poses an obvious problem. That means we need NFTs that don’t just convey ownership, but also access, control, and ultimately privacy.
Enhancing NFTs With Privacy Preserving Features
Only a small fraction of the value of non-fungible tokens are being captured with current solutions, and we at Oasis believe that privacy-preserving smart contracts enabled by the Oasis Network can vastly expand the design space and potential for NFTs. Privacy preserving NFTs have a couple of major attributes that set them apart from non-privacy enabled ones.
- Private metadata — Having private metadata doesn’t mean you don’t have the public metadata. Rather, you have the added benefit of being able to include additional sensitive data that needs to remain private. Or an NFT creator can create unlockable versions of NFTs that only reveal private information once purchased or accessed through special means.
- Private ownership — As NFTs can normally be viewed publicly on the blockchain, this poses a problem for token owners who wish to have their assets remain private — much like many physical assets you might own. Privacy enabled NFTs solve this problem by allowing programmable privacy within the tokens.
In short, programmable privacy gives NFT creators a lot more choice and flexibility when creating their tokens, and this opens up a whole world of possibilities in this sector of the market. And being that the Oasis Network is built from the ground up with privacy in mind, our blockchain is the ideal platform for developing privacy preserving NFTs that work everywhere from privacy focused DeFi applications to enhanced digital art.
Oasis is helping to build the future of NFTs and if you’re a developer or you’re part of a team that wants support to develop innovative NFTs with our help, we’d like to extend this opportunity for you to learn more about our Oasis Ethereum ParaTime and our NFT Grant Program.
Build an NFT app on the Oasis Ethereum ParaTime
Each grant proposal to create an NFT will be eligible to receive anywhere from $5,000 to $50,000 USD given out in ROSE tokens, and focus areas of your NFT project can include:
- Porting an existing NFT-related Solidity smart contract from Ethereum or creating a brand new NFT-related Solidity smart contract to be launched on the Oasis Network
- An NFT minting app
- An NFT-focused web app or mobile app, such as a gallery or shop to showcase and sell NFT artwork
- A decentralized NFT auction system
- A game with NFT collectibles
- NFT assets, such as virtual real estate
- Other use cases and ideas can be found here
If you’d like to apply, please view the Oasis NFT grant application page, read through the requirements, then navigate to the application form.
NFTs allow for a whole new world of innovation and empowerment within the ownership economy. Here at Oasis, we work hard to stay on the forefront of innovation and this includes our involvement in NFTs. We look forward to hearing from you if you’d like to develop an NFT with our support, and we hope you found this guide to NFTs helpful.