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FungyProof

nft primer

A technical breakdown of Ethereum-based collectibles.

A 3d nft coin illustrationA 3d nft coin illustrationA 3d nft coin illustrationA 3d nft coin illustration

WHAT makes an NFT?

One NFT is actually many things linked together.

Some of those things are stored on-chain while others are stored off-chain. This isn’t always the case, but for now we’ll pretend it is.

nft components

A blockchain 721 smart contract with tokens attached to it
A web url link
The metadata of a nft stored in a server cloud
A web url link
The image related to an nft stored in a cloud server

smart contracts

to mint an nft you need to first deploy a smart contract or use someone else's.

A smart contract is a set of instructions telling the blockchain how to mint, transfer, and burn tokens. Minting with someone else's contract has pros, like less transaction fees, but it could have cons, like less control of your assets. ERC-721 is an example of a smart contract.

An erc721 smart contract published by a userAn illustration of a blockchainAn erc721 smart contract published by a platform

Contract deployed. call minting function.

mint tokens!

contract tokens

tokens follow the rules of their contract and are always tied to it.

If two contracts have different instructions for things like minting or trading, their tokens will be incompatible. Some market's contracts bake-in additional features giving their tokens powers like royalties. However, those features may not work in other markets.

compatible contract tokens

An nft minted on a erc 721 contract
two opposite facing arrows indicating a trade
An nft minted on an erc721 contract owned by a platform

transfer_from = transfer_to

incompatible contract tokens

An nft minted on a erc 721 contract
two opposite facing arrows with a strikethrough indicating not tradable
An nft minted on a non-standard contract

transfer_from trade_to

side note

Tokens become non-fungible simply because their contract gives each new token a unique ID. Fungible tokens, on the other hand, share the same ID.

non-fungible tokens

nft token id 1nft token id 2nft token id 3

fungible tokens

A fungible tokenA fungible tokenA fungible token

off-chain assets

images are stored off-chain along with metadata.

Blockchains get slow when filled with giant files because every node has to store them. Instead, your token contains a link to metadata and the metadata contains a link to your media. Again, this isn’t always true, but let’s keep it simple.

A url linkA url link
The image related to an nft stored in a cloud server
A blockchain 721 smart contract with tokens

asset storage

you can host your assets with different levels of permanence.

If your image and/or metadata are only hosted in one place, they could become inaccessible if that place goes down. Because of this, distributed file storage is a good way to keep things around. If you are uploading and minting your NFT through a platform, they will typically make this choice for you.

storage chains

Images hosted on a blockchain storage platform

Distributed cloud

Images stored on distributed server hosting

Centralized cloud

Images stored on centralized cloud servers

Personal node

Images stored on a personal computer or server

side note

If you aren't the one who owns the hosting account where your assets are stored, you may have limited control of them. This is great for convenience and potentially cost, but if you insist on complete ownership it's best to look into other options.

linking protocols

storage also affects how reliably your image can be found.

Browsers need a way to find and transfer your media and metadata so others can view it. These location protocols will impact how accessible your assets are far into the future.

A functioning gatewayA broken image linkAn image being served to a smart phone
break!
A functioning gatewayA broken image linkAn image being served to a smart phone
break!

Energy consumption

all of these factors impact  the energy consumption of your tokens.

Pinpointing exact energy metrics can be a challenge but the consensus mechanisms of the blockchain, the efficiency of your contract, and the storage of your assets all contribute to the footprint of your token.

fungyproof

there’s a lot to follow. fungyproof is here to help.

We’ve covered the basics but there a lot of ways to build an NFT. In the future there will be many tokenized asset classes beyond digital art. Being informed is key so we’re building the tools to help you find the data about your tokens beyond “memability.”

FUNGYPROOF™ MARKETABILITY

Fungyproof quality badge

Grades your contract by how standard & compatible the format is.

FUNGYPROOF™ METADATA

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Grades your contract by how the metadata is stored.

FUNGYPROOF™ ASSET IMMUTABILITY

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Grades your images by how they are stored.

FUNGYPROOF™ ECO IMPACT

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Grades your token by it's estimated energy consumption.

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