Understanding NFTs

What is NFT?

NFTs (Non-fungible tokens) are cryptographic assets on a blockchain with unique identifiers and metadata that distinguish them from each other.

Unlike tokens, they cannot be traded or exchanged at equivalency. This differs from fungible tokens like cryptocurrencies, which are identical to each other and, therefore, can serve as a medium for commercial transactions.

On the ArcBlock chain, the essence of an NFT is data, any data that has actual value and needs to be recorded on the chain can be put on the chain in the form of NFTs. Each NFT is identified by a universal unique address, we call it DID.

NFT Use Cases?

The usage scenarios for NFTs are very extensive, when you need to make any records of the data, you can create NFTs and update them through transactions. There are many usage scenarios for NFTs, including but not limited to:

NFT Structure

A typical NFT stored on ArcBlock chain has the following structure:

NFT Extendability

NFTs on ArcBlock chain can either be mutable or immutable depending on the use case. To make NFTs more flexible in real-world applications we have another 2 layers that are totally customizable by developers:

Here is an example of how NFT Display and NFT Endpoint are parsed and displayed in DID Wallet:

NFT Display

An NFT can have:

NFT display is defined with the following structure:

type NFTDisplay = {
  // Can be svg|url|uri
  type: string;

  // Varies according to the type
  // For svg type, content should be the svg itself
  // For url type, content should be the url to fetch the display content, this URL will be requested with the NFT or the NFT address for the display
  // For uri type, content should be the uri to resolve the display content, such as base64 encoded image
  content: string;
};

Developers can define NFT display in one of following ways:

NFT Endpoint

NFT endpoint enables developers to extend NFT capabilities off the chain, such as:

NFT endpoint is defined in the following structure:

type NFTEndpoint = {
  // the url that serve the endpoint, the url is requested with assetId and locale when displaying the NFT
  id: string;

  // can be public|private, private endpoints are requested with DID Connect
  scope: string;
};

A live NFT endpoint example form Blocklet Launcher.

TODO: how to create the response by NFT endpoint should be added

NFT Factory

Since some NFTs have standard formats, such as tickets sold in cinemas and parks, developers can use NFT factory to create vending machines on the blockchain: users send transactions to the NFT factory to pay and acquire NFTs that are defined by the NFT factory.

Just like a real-world factory that consumes some materials to produce standard products, the following diagram shows how NFT factory works:

NFT Factory Transactions

There are a few transactions related to NFT Factory:

NFT Factory Inputs

Users usually need to pay some tokens or consume some NFT to acquire a new NFT, the cost user paid on acquiring NFTs are called factory input, following is a factory input from Blocklet Launcher:

{
  "tokens": [
    {
      "address": "z35nNRvYxBoHitx9yZ5ATS88psfShzPPBLxYD",
      "value": "299000000000000000000"
    }
  ],
  "assets": [],
  "variables": [
    {
      "name": "plan",
      "value": "",
      "description": "",
      "required": true
    },
    {
      "name": "tag",
      "value": "",
      "description": "",
      "required": true
    }
  ]
}

Factory inputs fall into 3 categories:

NFT Factory Output

Since all NFTs from a factory share a predefined format, developers define the format as output, a typical factory output is a mustache template that produces the same structure as CreateAssetTx upon rendering(acquiring).

Following is the factory output from Blocklet Launcher

{
  "moniker": "BlockletServerOwnershipNFT",
  "data": {
    "type": "json",
    "value": {
      "purchased": {
        "plan": "{{input.plan}}",
        "sku": {
          "name": "{{data.name}}",
          "type": "{{data.type}}",
          "period": "{{data.period}}"
        }
      }
    }
  },
  "readonly": false,
  "transferrable": true,
  "ttl": 0,
  "parent": "{{ctx.factory}}",
  "address": "",
  "issuer": "{{ctx.issuer.id}}",
  "endpoint": {
    "id": "http://1322c65c-znkqyck3vfnye4cyk3yrwfnydgvvkshr9cur.did.abtnet.io/api/nft/status",
    "scope": "public"
  },
  "display": {
    "type": "url",
    "content": "http://1322c65c-znkqyck3vfnye4cyk3yrwfnydgvvkshr9cur.did.abtnet.io/api/nft/display"
  },
  "tags": ["BlockletServerOwnershipNFT", "{{input.tag}}"]
}

Data that can be consumed in NFT factory output includes:

NFT Factory Hooks

Developers can use hooks to add custom logic when a new NFT is acquired from a factory, for example:

Factory hooks are set and immutable when sending CreateFactoryTx, hooks from Blocklet Store:

[
  {
    "name": "mint",
    "type": "contract",
    "hook": "transferToken('z35nNRvYxBoHitx9yZ5ATS88psfShzPPBLxYD','z1gShFYDsiMfGtaerBTh2ydu75768xMYPQU','4662000000000000000');\ntransferToken('z35nNRvYxBoHitx9yZ5ATS88psfShzPPBLxYD','zNKXtdqz6Jbw5mKpojK2nP5gRNiEGJY3mNFF','1998000000000000000')"
  }
]

This mint hook uses the experimental contract of the chain:

transferToken(
  "z35nNRvYxBoHitx9yZ5ATS88psfShzPPBLxYD", // token address
  "z1gShFYDsiMfGtaerBTh2ydu75768xMYPQU", // receiver address
  "4662000000000000000" // token amount in big number
);

Token transfers in factory hooks must the following restrictions:

NFT Factory Data

The NFT factory can have data attached to it on creation, the data can be used in NFT output templates upon acquiring/minting.

NFT Security

Privacy considerations

Once the NFT is stored on the chain, anyone with the NFT address can view all the information stored in the NFT state. In theory, any data can be stored in the NFT. As for what kind of data is stored, the developer can choose according to the actual scenario:

Prevent counterfeiting

ArcBlock chain has built-in NFT anti-counterfeiting logic, that is, 2 identical NFTs are not allowed. However, during the app development process, the developer may mistake the fake NFT for the correct NFT when the verification logic is not strict enough, one solution to this is attaching the issuer's signature on NFT creation so that it can be easily verified.

Move NFT Across ArcBridge

TODO: more about ArcBridge should be added here