# NFTs

This page is a high-level overview of NFTs and the various approaches to NFTs within the Polkadot network.

Expect Chaos.

NFT stands for non-fungible token. Fungibility means interchangeability inside of a group. In theory, a $20 bill is always worth$20 in a store and identical in value to any other $20 bill. It is not, however, fungible with a$1 or $100 dollar bill (outside its group). A Pokemon™ trading card of a Charizard is non-fungible with a card of Squirtle, whereas editions of Charizard are fungible with each other. Fungibility is a spectrum - what is fungible to some might not be fungible to others. In reality, Pokemon™ cards, the canonical example of non-fungible assets are more fungible than US dollar bills, each of which has a unique serial number that may be important to a government agency. The cards have no serial numbers [1]. Additionally, a digital item like a "purple magic sword" in a game may be fungible with another visually identical sword if all the player cares about is the looks of their character. But if the other sword has a different function, and that function influences the outcome of an adventure the player is about to embark on, then visually identical swords are absolutely non-fungible. Bearing that in mind, the simplest explanation of NFTs is that NFTs are rows of arbitrary, project-specific, and non-interchangeable data that can be cryptographically proven to "belong" to someone. This data can be anything - concert tickets, attendance badges, simple words, avatars, plots of land in a metaverse, audio clips, house deeds, mortgages, and more. ## NFT Standards​ A general-purpose blockchain is not built to natively understand the concept of NFTs. It is only natively aware and optimized for its own native tokens, but implementations built on such a chain are essentially "hacks". For example, Ethereum is a general-purpose blockchain that does not have the concept of "tokens" (fungible or not) built-in. Tokens in Ethereum are essentially spreadsheets of information to be interpreted and read in a certain way by various user interfaces. This way in which they should read them is called a standard. The most widespread fungible token standard you may have heard of is ERC20, while the most widespread NFT standard is ERC721, followed closely by ERC1155. The downside of having to define these standards is that they are always instructions for how to read a spreadsheet pretending to serve information in a certain way, which by definition cannot be optimized. For this reason, even on a good day of extremely low network congestion, interactions with NFTs on any EVM chain will cost a few dollars but were on average around$100 per interaction (transfer, mint, sale) in 2021 on Ethereum.

This prevents use cases that go beyond the current craze of digital dust gathering NFTs on Ethereum - profile pictures, generative "look once and then put away" art, ENS addresses, and proof of attendance badges.

#### A typical NFT on Ethereum​

For the sake of comparison, we can refer to these as NFTs 1.0: static NFTs that are almost exclusively image-based collectibles of varying rarity.

## NFTs 2.0: NFTs in Polkadot & Kusama​

This is where Polkadot's technology shines and where NFTs 2.0 come into play.

By allowing heterogeneous application-specific shards to exist, builders can natively optimize for complex NFT use cases without tradeoffs that would make interacting with the system prohibitively inefficient and expensive in other environments.

The following NFT solutions exist and are under development in the Polkadot ecosystem:

### Unique network​

Unique network, an NFT-specific blockchain offering innovations such as sponsored transactions, bundling fungible tokens with non-fungibles, and splitting NFTs into fungible tokens for partial ownership.

Unique Network have launched two NFT projects to date: Substrapunks as part of Hackusama, and Chelobricks as a recent promotion during Polkadot Decoded. They are currently running a betanet which is bridged to Kusama, and on which these NFTs are already tradable.

#### NFT from Unqnft.io[2]​

Users can send KSM into their Unique Network escrow account, trade with it there, and then send any earned or leftover KSM back.

Unique Network aims to make their marketplace technology open-source and whitelabel-friendly. In theory, it should be trivial to set up a new marketplace for your project using Unique's technology. Unique network aims to be a parachain on Polkadot, and Quartz is their Kusama counterpart.

Unique Network works closely with RMRK (see below).

### RMRK​

RMRK is a "hack", a forced standard directly on top of the Kusama relay chain. Since Kusama is meant to be lightweight to process the various parachains connected to it, it does not have any other complex chain logic like native NFTs or smart contracts to enable them. However, because of market demand and Kusama's "chaotic" nature, the RMRK team decided to take the "colored coins" approach from Bitcoin and implement NFTs as graffiti on the Kusama chain.

The RMRK standard is a set of rules and specifications for how to interpret special graffiti on Kusama called "remarks", accessible via the core system pallet in any Substrate chain.

The RMRK team has just launched the 2.0 version of the protocol, a set of "NFT legos", primitives that, when put together, allow a builder to compose an NFT system of arbitrary complexity without smart contracts.

#### NFT Legos​

1. NFTs can own other NFTs, NFTs can equip other NFTs for visual change
2. NFTs can have multiple resources (different outputs based on context and resource priority)
3. NFTs can have on-chain emotes (reactions) for price discovery and social mechanics
4. NFTs have conditional rendering (e.g. show Mona Lisa as blushing if she got 50 kissy 😘 emoji)
5. NFTs can be governed by the community via fungible shareholder-tokens (fractionalization of NFTs)

The upcoming version 3.0 (Q1 2022) will be pallet and smart contract (EVM) versions of all RMRK 2.0 logic, and integration into partner chains for cheap and easy teleportation of non-fungibles across dozens of chains.

#### NFT from Kanaria​

A multi-resource NFT (gif of statue, and SVG-composable dynamic NFT in one) that can also equip other NFTs from within its "inventory".

The RMRK team is collaborating closely with Unique network. RMRK's logic and technology will be deployed on Unique Network in the form of runtime upgrades (FRAME pallets).

Two marketplaces for RMRK-based NFTs exist with hundreds of projects already launched:

Additionally, RMRK 2.0 functionality featuring composable, nested, multi-resource NFTs can be accessed and tested on the Kanaria platform.

For a complete introduction into RMRK, see the video explainer of RMRK, the video explainer of Kanaria (RMRK 2), and read the docs.

### Efinity​

Spearheaded by Enjin, the authors of Ethereum's ERC1155 standard and makers of the Enjin wallet and Unity plugin, which allows easy implementation of NFTs into 3D games, Efinity is an NFT bridging chain coming to Kusama and Polkadot in 2022.

They plan to build a paratoken which would be a standard for token migration across different parachains in the Polkadot ecosystem, but also into and out of Ethereum and other EVM systems.

### Moonbeam​

Moonbeam and its Kusama counterpart Moonriver are full EVM deployments with Ethereum RPC endpoints.

This means that the entire toolkit offered to other EVM chains (stacks like Hardhat, Remix, Truffle, Metamask, etc.) are available to Moonriver / Moonbeam users and developers, giving it a noticeable head start in attracting existing userbases.

Several dozen high profile teams are launching their products (or re-launching) on Moonriver / Moonbeam, however, it is essential to note that Moonbeam is an EVM chain and will therefore suffer from the same limitations as any other EVM chain in regards to customization and feature-richness of NFTs.

A notable advantage, however, is that Moonriver / Moonbeam is still a Substrate chain, meaning integration of custom pallets into the runtime is still possible, making NFT specific optimizations at the chain runtime level a reliable way to keep EVM compatibility of tools while at the same time optimizing storage and interactions for rich NFTs.

### Uniques​

Uniques is a FRAME pallet deployed on the Statemint common good parachain. It implements the most basic kind of NFT - a data record referencing some metadata. This metadata reference is mutable until frozen, so NFTs and their classes (entities derived from) are mutable unless specifically made immutable by the issuer.

Uniques takes a very bare-bones approach on purpose, to keep the Statemint chain a simple balance-keeping chain for both fungible and non-fungibles.

Uniques NFTs can be viewed and interacted with on RMRK's Singular platform, by switching the top right menu from Kusama to Statemine.

The can also be interacted with directly through the extrinsics tab of Statemine:

More UIs are already being developed.

## Bridging​

Bridging to and from Substrate chains and EVM chains takes much effort but is a highly desired feature in the NFT industry. Merging the collector and customer base has significant implications, so multiple projects focus on making this possible.

Apart from RMRK (Substrate-to-Substrate seamless teleportation natively with XCMP) and Efinity (Paratoken), the following efforts are underway:

• MyNFT: an EVM to EVM bridging effort.
• RMRK <-> EVM Simplification bridge: a bridge developed during the RMRK hackathon for porting RMRK NFTs into simplified IOUs on EVM chains, primary deployment pending November 2022 on Moonriver
• RMRK <-> EVM Full bridge: EVM version of RMRK 2.0 should be ready in December 2021, meaning a full migration of RMRK 2.0 NFTs from RMRK (Kusama) to Moonriver (and other EVMs) will become possible