Recently, the former US First Lady, Mrs Melania Trump created a small flutter in the cryptocurrency world by announcing the launch of her Non-Fungible Token (NFT) venture. The venture, titled 'Melania’s Vision' can be bought from her website (https://melaniatrump.com/) between December 16-31, 2021 either with the Solana cryptocurrency (the cost of 1 NFT is 1 Solana which is around $180 at the time of writing). You can even use a credit card if you choose. The NFT in question is a watercolour of Mrs Trump's 'cobalt-blue' eyes painted by the artist Marc-Antoine Coulon. While I have never gazed into Mrs Trump's eye myself, I have no doubt the former supermodel has beautiful eyes and the watercolour is rather striking.
Figure: Melania Trump’s NFT. Photograph: Melania Trump (https://www.theguardian.com/technology/2021/dec/16/melania-trump-nft-business)
The latest NFT brings home the absurdity and ubiquity of the latest cryptocurrency craze, NFTs. We would have laughed in their faces five years ago if someone had told us that pixelated JPEGs would sell for hundreds or even thousands of dollars. For most people, the type of art that sells for $100k+ is a Picasso painting or a rare stamp. Rather than that, in 2021, pixelated cartoon JPEGs sell for thousands, if not hundreds, of dollars. But it is 2021. The world has gone crazy and pixelated cats are making millions. NFTs have officially arrived with everyone from fashion designers to reputed sports companies such as Adidas to old blue-chip companies such as 'Coca-Cola' rushing to get their share of the pixelated pie. But what are they, exactly?
Non Fungible Tokens (NFTs): Brief Technical Overview
Non-fungible tokens (NFTs) are cryptographically distinct tokens that are associated with digital content, such as artwork and music. In layman's terms, a non-fungible item would be a rare stamp or a stamp with an error/blunder, whereas common stamps are fungible tokens (one unit is easily interchangeable with another). In the crypto world, NFTs are "one-of-a-kind" assets that you can buy or sell just like artwork or even a house, but which lack a physical form. While NFTs have existed since 2014, their popularity has only recently exploded, with NFT art sales expected to exceed $3 billion by 2021. NFTs have grown in popularity over the last year, with sales of NFT art expected to exceed $3 billion by 2021. Several examples of exorbitantly expensive NFT sales include the viral Nyan Cat — a pixelated flying feline created as a gif by its creator Chris Torres. It was ultimately sold for $531,00 as an NFT. NFTs are usually created on the very blockchains that underpin some of the most widely used cryptocurrencies, typically Etherum ($ETH) and now increasingly Solana ($SOL) and Cardano ($ADA). Before joining the NFT bandwagon, it is important to examine the pros and cons of the different blockchain frameworks and their NFT offerings
Which Blockchains Are Offering NFTs?
The simple answer to this question is- quite a few of them but Ethereum (ETH) is still the NFT king. However, the escalating transaction costs (also known as the 'gas fees') on the ETH blockchain is one of the reasons other blockchains are muscling into the NFT space. Here is a lowdown on the blockchains that offer NFTs:
1) Ethereum (ETH): Currently, the vast majority of NFTs are created and distributed via the Ethereum (ETH) blockchain. The now-iconic Cryptopunks was one of the first ETH NFT projects, having been launched on the ETH blockchain in 2017. Cryptopunks inspired the ERC-721 standard for non-fungible tokens and the modern crypto art movement, which has grown to become an increasingly important component of the cryptocurrency and decentralised finance ecosystems on multiple blockchains. Some of the most popular NFT marketplaces are hosted on the Ethereum blockchain.
The top. Ethereum NFT marketplaces by volume include OpenSea and Rarible. OpenSea is a decentralised peer-to-peer marketplace that enables the purchase, sale, and exchange of rare digital goods, such as artwork, video games, and other collectables. OpenSea is the preferred platform for a number of well-known NFT projects, including Gods Unchained, Cryptopunks, and Cryptokitties. Rarible enables digital artists to create and sell tokenized artwork. Additionally, Rarible enables content creators to configure smart contracts for the future collection of royalties on their artwork. From a technical standpoint, Rarible can be defined as a DAO or Decentralized Autonomous Organization. The DAO enables users to securely create and sell ERC-20, ERC-1155, and ERC-721 tokens while also ensuring the Ethereum environment's security.
2) Solana ($SOL): Mrs Trump is not the only one to deploy the $SOL for her NFT offering. The two main $SOL NFT marketplaces include Solanart (https://solanart.io/) and Solsea (https://solsea.io/). The best know $SOL NFT project remains the Degenerate Ape Academy. The collection is similar to Bored Apes and Crypto Punks, but the 10,000 unique images of cartoon apes have a slight 3D feel. The entire collection was sold out in less than eight minutes, catapulting Solana to new heights. The mint price was only 6 SOL, but by the time it reached the floor, it had more than doubled in value. It has a market capitalization of $241 million at the moment, with each Degenerate Ape selling for an average price of 129.7 SOL. Solana Monkey Business is the second high-profile NFT collection. The SMB collection consists of 5000 monkeys with a variety of different traits that were generated randomly. "The Monkeys" intend to build a sizable community around Solana by offering holders exclusive benefits and a community wallet. The current floor price is 59 SOL, with a market capitalization of $60 million. Of course, there is more to the $SOL NFT marketplace than being a Planet of Apes. The play-to-earn NFT game, Aurory launched its token on the $SOL blockchain (although it suffered huge losses owing to errors in smart contracts and hacking issues).
3) Cardano ($ADA): CNFT (cnft.io) and SpaceBudz are two of the largest marketplaces for $ADA NFTs. By completing a $1 million sale, the latter earned a $ADA firs. The SpaceBudz is comprised of 10,000 one-of-a-kind NFTs that users can acquire upon purchase. The sale is announced on Twitter via a bot that tracks each listing and sale of a SpaceBudz NFT. While $ADA NFT marketplaces are still in their infancy, with the addition of smart contracts, this space has the potential to grow.
4) Uniqly: While Uniqly (https://www.uniqly.io/) is not as well known as the other marketplaces, it seeks to bring NFt beyond its digital realm, into the real world. It allows creators to create a storefront where their offerings (such as apparel) can be listed as NFTs. Each NFT can be redeemed for physical items with full Proof of Authenticity on the blockchain, metaverse wearables for digital avatars, and virtual objects in AR, elevating your brand to the next level. This is done via their Redeem Module which is the gateway between NFTs, physical world and metaverse. Users can use this tool to redeem their purchased and owned NFTs and manifest them into real-world products. The platform will produce and deliver right to the doorsteps of the buyers, metaverse wearables for their digital avatar, and virtual items in AR.
Why Newbies Can Love NFTs to Pieces
One such project is being led by the blockchain company Otis, which is fractionalizing Cryptopunk #543 in order to sell it for $1 per share. Fractional and Unicly are two additional fractional companies. Two NFT projects have been launched by Russia's State Hermitage Museum. It recently earned $440,500 from a Binance NFT Marketplace auction of tokenized digital copies of five historic masterpieces from its collection, ranging from Leonardo da Vinci to Van Gogh. While the NFT space is notorious for its lack of liquidity, fractions are more relative and accessible via blockchains. Purchasing fractions of a unique digital asset provides a much better chance of entering and exiting while leveraging volatility to your advantage. As the NFT space expands, the demand for fractional NFTs will increase.
