Tag: eth

Combining NFTs in the Metaverse: EIP-4883

This post will dig into EIP 4883, the ethereum improvement proposal for the .SVG NFT standard.

Why is EIP 4883 relevant?

EIP-4883 defines an NFT standard that enables items to be combined in unique ways.

This ability to combine various NFT items / objects is a small step forward for having an interoperable internet, a critical feature of the future of the web3-enabled internet.

fellowship of ethereum magicians EIP 4883 for SVG NFTs
ethereum-magicians.org

To understand what this means, let’s start with video games.

Think about some of the classic / favorite video games….

  • Halo
  • Super Mario 64
  • Super Smash Bros
  • Tony hawk 
  • Call of duty

As loved as all these characters are, why can’t all these characters play together in one game?

if video games were interoperable

Isn’t it unfortunate that these games are not able to be combined in some way where you could use a weapon from Super Smash Bros in Fortnite and vice versa?

Today’s video games were not built to be interoperable.

Fortnite, for example, is closed off to users without Epic Games accounts. 

Similarly, Nintendo games were not built to be played on Playstation or Xbox and vice-versa.

Also, IP rights need to be taken into account as not all games would want to participate in bridged gaming or open metaverse.

What would be possible if video games were interoperable?

Imagine a metaverse where all items in the game exist as unique NFTs, however, all of these items are modularized, where any given item can be combined with any other item.

Imagine playing a tony-hawk pro skater type game in the metaverse…

Imagine if you could bring Bowser from Super Mario 64 over to Tony Hawk’s pro skater game and ride around and do skate tricks as bowser.

Or, sell a skateboard from Tony Hawk as an NFT that can be used in any other game.

SVG-like items such as skateboards would allow users to play with specific NFTs of different characters.

So, I could move a skateboard NFT that I own over to a Mario game for example, and ride around on a tony hawk pro skater 4 skateboard inside super mario 64.

This would be so much fun, if only video games were interoperable.

Interoperability – Why is it important for the internet?

As we think about future of the internet, specifically the 3D version of the internet or the metaverse, making sure everything is interoperable will become more important.

Interoperability is extremely important for the internet, and valuable across a number of apps and use case. 

For example, imagine if EMAIL (electronic mail) was not interoperable, the way video games today are not.

This would mean that you couldn’t send an email from Outlook to someone with a @Gmail.com or @yahoo.com email address.

This would make electronic communication on the internet extremely inconvenient, and we wouldn’t easily be able to communicate with people from different organizations, or companies.

Fortunately, the internet mail standards such as SMTP or communication protocols like TCP/IP are open and cross-compatible with everything else.

EIP 4883 helps enable interoperability between NFTs

So, in the spirit of enabling interoperability, composability, compatibility in web3 and NFTs, which is central to the web3 Ethos, let’s dive into EIP 4883, for Scalable Vector Graphics NFTs.

EIP 4883 is for the composable SVG (file format) NFTs which will make any NFT asset able to be combined with others.

According to the description from the EIPs website, the goal of EIP-4883 is to allow you to:

“compose an SVG NFT by concatenating the SVG with the rendered SVG of another NFT.”

  • Concatenate means to link (things) together in a chain or series. For example:
    • combining one item or object with another.
    • adding / removing sunglasses from a profile pic NFT
  • What is SVG? → SVG stands for “scalable vector graphics”, referring to a .svg file.
    • the .svg file format is an XML-based vector image format for defining two-dimensional graphics, supporting interactivity and animation.
    • this enables resolution independent images and items.
    • Its important to note that at some point, it will be important that we will be able concatenate 3D file formats as well.
      • I could certainly see a future EIP for concatenating rendered .obj or .fbx files, which are supported by the Unity game engine for example.
future EIP proposal should include 3d images.
fileinfo.com

EIP 4883 seeks to apply the SVG file format to NFTs… allowing SVG NFTs to be rendered in the foreground or a background of an image or metaverse type experience as required. 

This NFT standard would mean all NFTs that use it are composable, so on-chain SVG NFTs can be combined with others.

The SVG NFT is able to be re-sized and scale to the right size as needed. e.g. adding glasses & hat NFTs to a profile pic NFT or a fish NFT to a fish tank NFT.

What does EIP-4883 enable NFT owners?

NFT owners of specific rare traits and accessories could then sell these types of accessories to NFT owners from other collections. 

optipunk items could be broken down into separate NFTs

What if I could split each accessory or attribute apart, and then list just the glasses or the hat while keeping my Punk? 

For example, an Optipunk’s glasses + hat could be split apart from the main NFT, and stored on-chain as associated but distinctly separate NFTs on their own.

These glasses and hat NFTs could then be sold or transferred to someone else, or another profile picture NFT, for example, to a Optichad. 

Essentially, then that other NFT PFP can wear the glasses and the hat:

items could be worn by any other profile pic NFT.

This would mean accessories within web3 could be composable / transferred to someone that owns any other type of NFT even outside the collection.

The SVG allows the item to be seamlessly re-sized in order to form-fit whatever type of character wants to wear it , or object that it needs to be combined with.

Extrapolating forward, it would be awesome if, for example, Fortnite skins that you own could be transferred to other games.

Optimism NFT project with transferrable items

One example of an NFT project that can help us think about the importance of transferability and interoperability is the Loogies, on the Optimism layer 2 network…

Optimistic Loogies or the Fancy Loogies on Quix, accessories can be added to your Loogie. Those accessories are essentially combinatorial, those are composable traits.

optimistic loogies NFT project.

It almost seems like this NFT project was built as a conceptual idea to illustrate the need for something like EIP – 4883. 

However, as of right now, you can’t leverage these assets in any other collection. Ideally we’d be able to trade these assets across any other given collection. 

EIP 4883 would enable you to combine these assets with other collections.

Listen to the podcast

If you want to learn more about crypto, NFTs, dapps, DAOs and more, please check out the latest episode of The Web3 Experience podcast:

Should You Hold More NFTs or Crypto Long Term? Which is more likely to go up?

not investment advice, do your own research, etc.

While it’s difficult not to roll your eyes the idea of a million $$$ dollar jpeg, there is a special shift happening that will fundamentally change the way that humans behave on the internet.

Crypto vs. NFTs as investments – some context:

At their best, cryptocurrencies like Ethereum have gained notoriety and traction as development platforms for blockchain applications (aka dapps).

At their worst, the ICO mania has seen many cryptos pump to extremely high valuations, to later crash back to pennies after early investors dump their holdings (aka pump and dump schemes).

NFTs, on the other hand, haven’t been around as long as Bitcoin or Ethereum. Even an NFT from as recent as 2018 is considered historical and hence more OG by groups of self-proclaimed “NFT Archaeologists”. Still, we haven’t yet seen a true bear market in the space just yet, and only time will tell if these hypothesis will remain plausible.

Regardless, the steady value accretion among communities like CryptoPunks and the Bored Ape Yacht Club provides evidence that NFTs are in fact more than just overpriced .pngs.

Wherever a person chooses to invest, one thing is for sure: NFTs and crypto are risky, and you can lose the money you put in.

Whether you should allocate more of your investments towards crypto or NFTs is dependent upon your own situation and investment goals.

That being said: NFTs and crypto have both had huge price swings in recent months. So, which might be a better investment – crypto or NFTs?

Why might a cryptocurrency like Ethereum be a better long term investment than an NFT?

As cool as NFTs are, there is a high chance they will not outperform a cryptocurrency such as ETH.

Most NFTs are built and hosted on top of the cryptocurrency protocols within the Ethereum ecosystem. Although there are NFTs built on other chains like Solana or Tezos, the largest market share by far sits on Ethereum.

Because that Ethereum powers the majority of the NFT market as a development platform and smart contract programming language (Solidity), owning ETH could feel safer than owning any one individual NFT.

After all, platforms tend to be accrue more value than the sum of all the individual items they support.

Developers are actually building new products and applications on top of the Ethereum Virtual Machine, which inherit the security and decentralization protocols of Ethereum itself.

Another property that makes Ethereum unique is that the asset is burned during each transaction, via gas fees. This reduces supply making ETH progressively more scarce as a result. This decrease in supply is one of the key tenets surrounding the ultrasound money movement.

Ethereum also has a strong development community.

The most significant upcoming item on the dev roadmap is the Merge, in which the Ethereum consensus mechanism will transition from proof-of-work to proof-of-stake. This means that new blocks are validated by nodes that have staked their ETH, instead of by doing energy-intensive computations.

Once Ethereum transitions to proof of stake, owners will be able to earn interest on their staked ETH, which could further drive the charts up and to the right.

The downside of purchasing NFTs

Given the large amount of questionable NFT projects he risk / reward ratio may not be there for NFTs. Extremely high fees mean your ETH stack is dwindling every time you make a purchase.

NFT markets are unpredictable, yet there are few sound and known fundamentals that back them up as an investment. They’re largely focused around hype, which whales are involved etc.

There is a lot that goes into deciding how to invest and which project to put your eggs into, finding high-ROI investments is an art as well as a science.

An investment portfolio is like a bar of soap. The more you handle it, the smaller it gets.

Does it make sense to own NFTs as a part of your crypto portfolio?

In my view, NFTs should not be held as investments, but for FUN and for the community.

Although NFT value increases can be quite unpredictable, a strong community is a good sign.

If you choose to hold an NFT, take your time, do your research, and find an NFT project with real world utility.

NFTs give you the opportunity to become part of a group that is focused around any specific thing.

One sign of legitimate community within an NFT project is the willingness for the founder as well as active holders to be doxxed and in the public eye, as well as seeking to build community for the long haul.

One thing that I always look for is whether or not there are in-person events or meetups happening within the community and among members from different regions around the globe.

Do the NFT holders know each other in real life?

That being said, being a member of an NFT community can be valuable because it is just fun.

Its like joining a fraternity or sorority in college, playing competitive club soccer, or joining the varsity wrestling team.

NFTs create groups of like minded individuals with stake in the focus area.

Diminishing returns: Once you purchase a few NFTs and join a few different communities, any future NFT purchases may only slightly (if at all) increase the amount of value you get from being part of the community.

Because of this, owning more than 1 NFT isn’t necessarily valuable unless you plan to flip it for profit.

Spreading yourself too thin: Being in a community means investing time and energy hanging out in discords, going on trips / attending events, and building relationships in that community.

A single person can only spend so much time. I feel that it is more impactful to be a dedicated member of a small number of communities rather than loosely tied to many different ones.

Sure, the NFT markets are fun to watch. Perhaps they’re worth keeping an eye on in case something truly special comes around that you’re dying to be a part of.

When I get the drive and conviction to own a specific NFT, I do so while making sure to maintain as much ETH ownership as possible.

Number going up is simply a by-product of being part of the group.

Looking ahead

Most of us aren’t building the future of the internet – that’s the job of software engineers and designers. But we are the ones that will be more affected by crypto and NFTs potential use cases – we are the ones who will actually use it.

From the content we consume, to how we communicate… from how we spend money, to the career paths we choose… if blockchain technology and its applications continue to advance, the world and our relationship with the internet will be extremely different in the years to come.

Regardless if you’re allocating more capital towards NFTs, crypto, or neither, when we take a step back and look at the larger impact of this technology on our society, we should feel lucky to be around during such an exciting time.

The Problem with The Crypto Community in 2021

The Problem with the Crypto Community Today

The community surrounding a token determines what the crypto project will ultimately become.

The community will make or break a cryptocurrency.

Sure, blockchain is the great enabler, but the technology is nothing without the people and the desire to build cool new projects.

Whether you’re a meme coin or a platform coin, the community is what dictates the success or failure of it.

crypto charts are dumb
source: r/cryptocurrency

And the same is true for cryptocurrency as a whole.

There is an overabundance of discussion online (reddit, twitter, discord groups) that focus solely on short term buy / sell strategies.

Surprisingly, it is difficult to find groups eager to engage in discussions about the long-term future of cryptocurrency as a utilitarian and functional technology that can improve human life.

Unfortunate Crypto Trends:

I’m in a small chat group with around 40 members. When I joined the group, I couldn’t help but notice a few disappointing trends:

There is almost no discussion on long-term strategy (even HODLing) in crypto. It is all discussion about trading, buying low selling high, buying the dip, etc.

Most are buying / selling multiple times in the same day, looking at charts with strange lines and who knows what else.

I really miss the “HODL culture”. HODL culture used to be a thing, and it really doesn’t feel like it is anymore. What happened?

There is less discussion about blockchain technology itself.

90% of people haven’t even read the bitcoin whitepaper.

They have no idea what the Double Spend problem is and how blockchain solved it in 2008 when the paper was published..

People brag about their profits from day to day arbitrarily trading coins.

The macro focus, where it exists, focuses on political aspects like how lawmakers are reacting to crypto, tax implications, which big organizations are investing in various cryptos (Tesla or El Salvador news for example).

The discussion almost never focuses on how a cryptocurrency project solves problems in the real world.

The fact that 99% of all discussion about cryptocurrency is catered towards trading isn’t healthy for the technology’s future.

What The Crypto Community Needs

I believe the crypto community needs to focus more on the execution of crypto’s promises like decentralized apps, smart contracts, and Web 3.

Thank God we have something like NFTs are taking off.

NFTs are finally one of the first mainstream applications of blockchain being used that isn’t solely focused on trading – are built on top of Ethereum. And it started with something as silly as Crypto Kitties.

Say what you will about silly artwork being sold on the blockchain – at least its a real application. Its as productive for society as Pokemon.

NFTs have had an impact because they do fit into a real market in the real world – the collection of trading cards and artwork.

Yet even with NFTs, there’s still that huge focus on buying low, selling high, and profiting.

Instead of trading, the people who actually CARE about cryptocurrency need to think about the long term future of these digital assets and bet with conviction in projects they believe in.

This ultimately comes down to the development team, the community, the real world problem that the coin solves.

This is one reason I appreciate assets that make it easier for other projects to be build. Those projects that serve as platforms for other apps in the blockchain arena.

And developers like Vitalik Buterin who are actually focused on building things that impact the real world, not just gaining hype for a coin and selling / trading and pump and dump schemes.

Ethereum is important because it allows other projects to be built on top of it.

It is almost similar to a hosting or infrastructure service for software projects.

In the early days of the internet, the companies that ended up surviving for the long term are those that focused on building the computers, infrastructure, programming languages, databases, servers and more.

As these tools were mandatory for any new internet based project, those companies were destined to be successful.

To figure out which cryptos are going to be successful…. look at the ones that help create a metaphorical “garden” for new projects to form.

Not all seeds will grow, but the garden will live forever.

That’s enough for today.

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