Interchain NFT: a protocol for bridging assets between chains
Web3 can often look like a maze of different chains, tokens and communities fragmented from one another. All kinds of assets — tokens and non-fungible tokens (NFTs) — are typically tied to the chain they’re created on and cannot easily transfer over to another chain or app. Marketplaces and platforms cannot grow when there are limited means for exchange and overlap.
Why should this be the case? Why should NFTs be confined to the chain they’re created on? NFTs should be able to transfer seamlessly and securely, whether it’s on Chain A, B or C. A single network shouldn’t determine how you can use, trade or manage your assets.
Interchain NFTs change this. While most NFTs are tied to just one blockchain, Interchain NFTs are multi-chain. Interchain NFTs enable users to transfer their digital assets across previously fragmented networks, providing the flexibility to choose which chains their NFTs use. No longer beholden to a single chain, users can leverage the unique capabilities and communities of different chains, platforms and apps.
How does this work exactly?
Interchain NFTs use a new upgrade to the Inter-Blockchain (IBC) protocol, ICS-721. Think of IBC as a universal standard for bridging different networks. With the security and compatibility of this protocol, users can now create, transfer and track the ownership of their Interchain NFTs as they move from chain to chain. All the ownership data and updates to assets are preserved in transfers, without any additional permission required. To keep things simple for users, all the important features of an NFT like minting or burning also remain on the original chain it was created on, ensuring that you can still use the chains that you trust to manage your assets. They conform with existing NFT standards like ERC721 and CosmWasm to guarantee that your Interchain NFTs are compatible with other tokens in use today.
What could this mean?
Interchain NFTs will create all new surface areas for developers and artists to unleash their creativity. Projects like the “mimetic virus” NFT, Kudzu, have already hinted at the potential for NFTs that change state when they are transferred. Now developers can leverage multiple chains when building with NFTs, whether to reflect the state of multiple chains, or create multi-chain metaverses or game worlds. And as NFTs are increasingly used to represent governance rights and access keys to token-gated communities, Interchain NFTs provide a larger, more fluid market with better price discovery for assets with these use cases.
The first test of interchain NTF transfer took place in November. Notably, the Iris <> Stargaze transfer showcased how NFTs can be moved successfully even when their underlying implementations are different: Iris is Cosmos SDK based, whereas Stargaze leverages web assembly. IBC protocol is not just a bridge designed for a single type of implementation, but a true standard for connecting chains built with disparate tech.
How will this benefit users?
Interchain NFTs give users their choice of chain and with that comes the freedom to bring their art, collectibles, and other assets to their choice of marketplace. More chains not only means more exposure and a larger base to trade these assets, but also the capability for users to lend their NFTs, post them as collateral, or exchange them for DAO tokens to become part of different communities. While the overall trading of NFTs may be down, the prices of some top NFT collections have actually risen. With Interchain NFTs, users ensure they can access the best opportunities and markets. They’re already doing so.
What differentiates Interchain NFTs from other chain-to-chain transfers is that the underlying protocol is a trust-minimized protocol, meaning that it doesn’t rely on anonymous third parties or to authenticate the transfer. Unlike most bridging solutions, all that’s required is the trust between the two chains in the transfer. This level of security and reliability is why users and developers have turned to the IBC protocol. In less than 2 years since its release, the IBC currently has 53 chains that support it with $30.3 billion in cross-chain transfers in 2022. Now cross-chain NFT transfers can expect the standards of speed and security.
The launch of the IBC protocol in 2021 brought the vision of the Interchain online, connecting isolated communities competing for capital and attention in a disjointed ecosystem. Now, the launch of Interchain NFTs extends the freedom of movement Interchain citizens enjoy to non-fungible tokens, linking more chains and people. With this tool, Web3 looks less like a maze and more like a series of open paths.
A Cosmos Hub proposal has arrived! Check it out, and be sure to look out for a multi-chain hackathon coming in March.