NFT’s are booming. We’ve crossed the chasm into mainstream adoption. However, there are two very critical issues that are now threatening market growth – immutability and high fees. I'll quickly outline these problems first, then talk about how SKALE can help.
When an NFT points to a link or URL that holds the scarce asset, that link can be modified. So you are essentially buying a scarce contract that is pointing to something that is not immutable. That's problematic and simply not the goal of an NFT.
“All discussions about the value of NFTs are meaningless as long as the token is not inseparable from the artwork itself,” said Neitherconfirm. “What is the meaning of creating an unforgeable token on a highly secured network if somebody can alter, relink or destroy your possession? As long as the value of your artwork is relying on a central service you do not own anything.”
You can read more about this “rug pull” technique here: https://cointelegraph.com/news/opensea-collector-pulls-the-rug-on-nfts-to-highlight-arbitrary-value
The other problem is, minting NFTs on the Ethereum mainnet is incredibly expensive. As of the time of this article (April 2021) it costs around $700 and continues to go up as the price of ETH rockets upward. You can read more about NFT costs here: https://www.supercryptonews.com/how-much-does-it-cost-to-mint-an-nft/
So, what is the Solution?
SKALE offers a unique and comprehensive solution directly within the current design and architecture of the SKALE network, which stands as the only Ethereum Native Multi-chain Network today. SKALE is Ethereum Native in that chain creation, staking, slashing, token transfers, orchestration, validator payments, chain fees, and more all happen on Ethereum. Multi-chain means that each application (or NFT issuance platform) gets its own EVM Blockchain called a SKALE Chain.
A multi-chain architecture is valuable for a variety of reasons. One is that it becomes affordable to use the blockchain for more than just a shared ledger. It can also be used for other functions such as file storage, allowing each SKALE Chain to be outfitted with SKALE File Storage. SKALE File Storage allows for storage of immutable assets directly on-chain rather than needing to link elsewhere.
This means that NFTs, websites, social media applications, exchanges, and other applications can all run directly on SKALE without touching a centralized database. You can mint an NFT on SKALE and maintain its provenance without reliance on a centralized service. NFTs on SKALE are then backed up by the security pool of the SKALE Network which currently has over $2B USD staked.
Now let’s talk about minting cost. SKALE chains are gasless, meaning there are no fees for onchain actions. Instead of paying a fee for each use, the chain owner pays for the chain in SKL tokens over a period of time. That SKALE chain can then be used to the full extent of its compute and storage properties without extra costs. Therefore NFTs can be minted at zero cost to the artist or NFT creator. Additionally, SKALE is well suited for NFT minting, trading, and integrations to exchanges, trading hubs, and more.
A Fit with NFT Token Standards
NFTs minted on SKALE are compliant with Ethereum standards. Most NFTs use either the ERC-721 standard or the ERC-1155 standard, though the later standard is becoming increasingly popular. It is far more flexible than ERC-721 and offers a number of improved performance characteristics. ERC-1155 supports batch transfers of multiple token IDs in a single transaction, allows for multiple token types within a single smart contract, and supports localization of all metadata (i.e. token name, description, etc.). ERC-1155 also produces much more expansive event logs including standardized events for mints, burns, transfers, approvals, and metadata changes. This richer stream of data allows for better analytics and much more open and transparent introspection of token dynamics.
Additional SKALE NFT Partnerships
Since SKALE can support minting of NFTs and File Storage access, it can then connect to market places such as Rarible, OpenSea, and NFT Gateway. This allows NFTs on SKALE to interact across marketplaces.
SKALE can also act solely as the blockchain layer to securely store NFTs created on other platforms such as FileCoin and Pinata via IPFS. It can also connect to non-IPFS permaStorage solutions such as Arweave, where SKALE smart contracts connect to metadata on the Arweave Blockchain, which is permanent and highly secure.
SKALE is also a platform of choice for NFT powerhouses like Bondly. In addition, there are other strong partnerships being formed which will help bring more value to the growing NFT market.
The NFT market is off to a roaring start. We are just seeing the early iterations. I’m excited for NFTs to grow further in use cases beyond collectibles as this space is just getting started. Like most high growth categories, however, there are some hurdles and challenges along the way. The SKALE Network is excited to support the growth of this exciting space and enable the artists, content creators, and creatives to bring non-fungible value to the world without separating the asset from the blockchain.