NFT BASICS

What does NFT stand for?

NFTs, or Non-Fungible Tokens, are unique digital assets verified using blockchain technology. Unlike cryptocurrencies such as Bitcoin or Ethereum, which are fungible and can be exchanged on a one-for-one basis, NFTs are distinctive and cannot be exchanged on a like-for-like basis.

This uniqueness and scarcity often give NFTs value, especially when tied to art, collectibles, or other forms of media. Each NFT is stored on a blockchain, has a distinct code, and is associated with a specific digital item, ensuring the owner's verifiable ownership. The word NFT means:

• Fungible: this word represents a property, and gives something interchangeability. An example would be the fungible Dollar bill, since you can give it to someone else without its core or value changing.
• Token: cryptocurrency tokens are cryptocurrency assets, that represent something other than a monetary value. An example would be loyalty points, ownership of something else…Think of it as a stock, but instead of having ownership in a company, it can be ownership in anything else.

When did NFT start?

The concept of NFTs has its roots in the early days of cryptocurrencies. Colored Coins, the first representation of NFTs, were discussed as early as 2012. They were considered ways to represent real-world assets, like property or stocks, using a small fraction of Bitcoin.

However, it wasn't until Ethereum introduced its ERC-721 standard in 2017 that NFTs took a definitive shape. This standard allowed developers to create unique tokens with distinct metadata, giving birth to modern NFTs as we know them.

Why are NFTs important in society?

NFTs are redefining how we perceive value and ownership in the digital realm:

1. Digital Ownership: In a world of digital replicas, NFTs grant genuine ownership of a specific digital item.
2. Artist Empowerment: Creators can monetize their work in new ways and retain more profits by bypassing intermediaries.
3. Provenance & Authenticity: The blockchain verifies the originality and ownership lineage of an item.
4. Innovative Business Models: Companies and creators can design new monetization strategies, like virtual real estate or fashion.

What are their use cases?

NFTs are versatile and have a plethora of applications:

1. Digital Art: Digital creations can be bought, sold, and held like traditional art.
2. Collectibles: Virtual trading cards, stamps, or any other collectible.
3. Virtual Real Estate: Ownership of land or properties in virtual environments.
4. Gaming: Unique in-game items, characters, or skins.
5. Music and Video: Tokenizing songs, albums, or videos to denote ownership.
6. Domain Names: Unique digital real estate addresses.
7. Intellectual Property: Protecting and monetizing patents or innovations.

How are NFTs made?

Creating an NFT involves:

1. Creating a Digital Item: This could be art, music, a video, or any digital file.
2. Choosing a Blockchain: NFTs can exist on various blockchains.
3. Minting the NFT: Using a platform or a wallet supporting NFT creation, the digital item is minted or published as an NFT.
4. Listing for Sale: Once minted, it can be listed on an NFT marketplace.

On which blockchains do NFTs exist?

While Ethereum was the pioneer, several blockchains now support NFTs:

1. Ethereum (ETH): The most popular and widely used for NFTs.
2. Binance Smart Chain (BSC): Known for lower transaction fees.
3. Flow: Designed for consumer applications like games and digital assets.
4. Tezos (XTZ): Eco-friendly and efficient.
5. Polygon (MATIC): Offers scalable and low-cost transactions.

Where to Buy NFTs?

NFTs can be bought and sold on specialized marketplaces. Some prominent platforms include:

1. OpenSea: The largest Ethereum-based NFT marketplace.
2. Rarible: A decentralized platform where anyone can mint and sell NFTs.
3. Foundation: Focused on high-quality digital art.
4. NBA Top Shot: For basketball-related collectibles, built on Flow.
5. Zora: Decentralized pricing and exchange protocol.

When buying, always use a trusted wallet, be wary of high gas fees, and research the asset's value and authenticity.

Famous NFT Projects

1- Bored Ape Yacht Club (BAYC)

The Bored Ape Yacht Club is one of the collections of NFTs released during the heyday of the NFT hype. Because of this, many celebrities and brands have gotten their hands on this NFT collection. Bored Ape Yacht Club has launched in 2021 with unique images of monkeys.

The BAYC collection is already known in the media as one of the most famous collections of all. In December 2021, Bored Ape Yacht Club overtook CryptoPunks as the most expensive NFT. Bored Ape, along with other character-based NFTs, is “a status symbol for owners who regularly use their animated creatures as social media avatars.”

According to CryptoSlam, the collection has amassed around 11,000 unique owners since its inception. On average, a bored ape was sold for 84 ethers, or about $344,000. Companies have been encouraged to buy Bored Ape NFTs. For example, Adidas bought one in September 2021. Many online media have reported on celebrities who collected BAYC in late 2021 and early 2022. Shaquille O’Neal, Eminem, Gwyneth Paltrow, Snoop Dogg, Stephen Curry, Mark Cuban, Post Malone, Paris Hilton, Serena Williams are among the celebrities who can call themselves BAYC NFT owners.

One of the most interesting news in the updated Bored Ape Yacht Club roadmap is a huge event. BAYC, Cyberkongz VX and Sandbox are said to be involved in this. There will also be a real meetup in Miami, this time exclusively for BAYC members. The Bored Ape Yacht Club roadmap continues to bear fruit!

2- Doodles

Doodles NFT is a collection of 10,000 NFT doodles, portraying different characters such as cats, little animals, people, and even aliens. They are sketched in a hand-drawn way, depicted in a light and fun way. This project came to life thanks to 3 main founders: Evan Keast, Scott Martin, and Jordan Castro. They recently launched their space Doodles, with the main theme revolving around…space.

Each Doodle has its own breakdown of 5 stats:

• Piloting
• Mechanical
• Stamina
• Bladder
• Vibe

3- MUTANT APE YACHT CLUB (MAYC)

MUTANT APE YACHT CLUB is a collection of 20,000 mutant monkeys that can only be created by influencing an existing Bored Ape with a flask of MUTANT SERUM, or by minting a Mutant Ape at a Public Sale.

To date, MAYC NFTs have had impressive results, not to mention their insane sales. According to DappRadar, the collection’s all-time sales surpassed $847 million. Meanwhile, its minimum price reached 19.35 ETH, or around $60,000. No wonder they currently rank ninth among NFT collections in terms of all-time trading volume!

4- Aavegotchi

Aavegotchi is a Tamagotchi-inspired blockchain NFT game. Aavegotchi itself is available as an NFT. Each Aavegochi is unique and has individual characteristics. The more unique Aavegotchi’s traits are, the rarer and more valuable it is. Aavegotchi allows users to create rare collectibles that they craft by depositing DeFi assets as collateral. These DeFi assets reside on the Aavegotchi lending platform. 

$GHST is the Aavegotchi ecosystem’s default utility token and serves to unlock portals, wearables, and consumables. A small portion of $GHST token transactions go to AavegotchiDAO members to encourage smart decentralized governance. 

5- RTFKT-Clone-X

RTFKT-Clone-X is the first release in “a broad ecosystem of high-quality PFP avatars that enable the Metaverse. If you are looking for an NFT avatar that you can take anywhere, this is the right choice. Besides this interesting fact, one of the reasons for the success and great value of RTFKT-Clone-X is that the buyer can modify the characteristics of the NFT by accessing its 3D file and with the project of the famous artist Takashi Murakami’s work.

6- The Sandbox

The Sandbox opens up a decentralized, virtual gaming world and is powered by the world’s largest crypto exchange, Binance. Thousands of individual NFTs can be found in the sandbox world.  The blockchain-based game allows players to create and monetize their own individual gaming experiences.

The sandbox game was developed in 2012 by the studios Pixowl and Animoca Brands. The video game was initially released for iOS and Android smartphones. It is a voxel-based game that uses polygons to graphically represent the game world. The world’s most famous example of such a game is Minecraft.

Within the game world of the blockchain version of The Sandbox, gamers can purchase so-called parcels with digital currencies. One of these parcels is the LAND token, which represents 96 square meters of land in the game world. The LAND token is based on the Ethereum token standard ERC-721.

Players can then build their own objects on their properties or even develop their own smaller games.  The gamers own their creations. They are their own NFTs and therefore their unique digital property. More information about Non-Fungible Tokens (NFTs) here . 

7- Decentraland MANA

Decentraland is a virtual world running on the Ethereum (ETH) network. Users can buy plots of land as NFT because they are stored as non-fungible tokens and then build on them. Decentraland MANA is one of the biggest NFT trends. Essentially, Decentraland is a virtual world. It is browser-friendly and available for free. Users first create an avatar and can use it to enter the world. Decentraland doesn’t have the fixed objectives or gameplay loops typical of video games. This is the biggest difference between a game and a Metaverse world like Decentraland: the latter contains very different themes and features, with no specific goals or reward systems running throughout the game.

Instead, content in Decentraland is created entirely by the community, such as mini-games or 3D scenes. Therefore we speak of a decentralized platform, as the name Decentraland suggests. Likewise, players can simply use the virtual world as a place to learn, explore, or for commercial purposes. The technical background is also worth mentioning: Decentraland is a blockchain platform based on the cryptocurrency Ethereum.