Exploring the Digital Uniqueness of NFTs – Games, Art, and Identity

In this chapter, we will explore non-fungible tokens (NFTs) and their various economic use cases. We will begin by understanding what an NFT is, how the relevant information is logged in transaction data, and the alternatives to obtaining it. Additionally, we will analyze how this technology is being leveraged by the gaming, art, and identity industries and explore some of the metrics that hold relevance for each business.

Business initiatives are carried out by a set of smart contracts that we will refer to as “protocols.” We will delve into the fundamental protocol metrics, offering quick insights into each protocol’s structure and user composition. To do that, we can choose to use a data framework, which is a highly valuable tool for business analysts as it helps organize our analyses and craft a compelling narrative when presenting our findings. An example of such a structure is the...

Enabling unique asset tracking on the blockchain using NFT

This section comprises two main sections: The business requests, which will unravel the specific demands that were at the origin of this solution, and The technical solution, which will provide a structural overview of the standard smart contract, its methods, and events.

The business requests

An asset is considered fungible when it shares the same quality and value as another asset of the same nature, making them interchangeable. For example, one dollar is interchangeable with another dollar, and the same applies to native cryptocurrencies and tokens, such as DAI or USDT.

Conversely, if an asset is non-fungible, it means that it is unique and cannot be replaced by another because there is no equivalent. Consider Sorolla’s “Walk on the Beach” painting. It is unique and while we can copy it from Google because we admire it, we do not truly own it and cannot prove ownership:

...

Blockchain gaming – the GameFi proposal

For each industry, we will briefly review the businesses that are currently active, the players, and the relevant metrics.

These metrics can be expanded depending on the business case. The Further reading section contains additional resources.

Introduction to the business landscape

The gaming industry has its own chapter in the blockchain saga and has been remarkably successful in driving the adoption of this technology while reshaping the landscape of rewards and ownership.

The gaming industry has undergone a significant transformation, shifting from a “pay-to-play” model where players were required to purchase physical cartridges, CDs, or subscriptions to access game content, to a “free-to-play” online format. The advent of blockchain technology has further pushed the boundaries by introducing the Play-to-Earn (P2E) model. P2E grants property rights to gamers, allowing them to truly own in-game...

Identity in the blockchain

As we did in the previous section, we will briefly review some of the initiatives active in the identity business and understand the players and the relevant metrics.

Introduction to the business landscape

Identity has long been a focus area for Web3 initiatives. The online domain faces various challenges related to identity, such as solving identity theft, international credit score transfer, and preventing Sybil attacks, among others.

One noteworthy project is “Proof of Humanity,” which aims to create a Sybil-proof list of individuals launched on the Ethereum network. To join the project, an already registered individual must vouch for your profile, thereby expanding the network of trust. The registration span is limited to 2 years to ensure that the registry is continuously updated so that deceased individuals or bots that previously made it into the list are taken out. Identity owners can de-register or update their information...

Redefining the art business with blockchain

In this section, we will briefly review the Web3 landscape, who the active participants are, and some relevant metrics.

Introduction to the business landscape

One of the most significant applications of ERC-721-backed protocols, in terms of transaction volume, is in the field of art. Blockchain technology has had a profound impact on the art business by enabling the trade of unique pieces and tracking authenticity, which is something that investors and galleries invest a lot of time and effort to guarantee. Traditional art players are already active in this field in multiple ways, from venturing into the world of digital art, as exemplified by the Belvedere Museum, which offers 10,000 digital pieces of the Klimt masterpiece “The Kiss,” to offering traditional art on Web3 native platforms, expanding their services to a new audience.

Furthermore, companies originally not related to art are exploring the landscape. Covalent...

Summary

In this chapter, we delved into the world of NFTs, exploring their structure and gaining insights into acquiring data for three crucial use cases. We took a deep dive into the game use case, with the analysis of the Wolf Game. Additionally, we examined ENS, shedding light on its role in online identity. Finally, we ventured into the expansive and ever-evolving art ecosystem, where we covered the activities of artists and marketplaces and generated metrics related to floor price and wash trading. In all these cases, we combined metrics derived from transactional data duly showcased on a Dune dashboard (https://dune.com/gabriela/chapter-4-nft) and state data in this book’s Jupyter notebooks.

It is important to note that the applications we’ve explored here are just the tip of the iceberg. The NFT landscape is incredibly diverse, and we might encounter requests to analyze NFTs in various other domains, such as fashion, proof-of-attendance protocols (POAPs) for...

Further reading

To complement this chapter, the following links may help:

• Technical introduction
  • More on the EIP 1155 proposal: https://ethereum.org/en/developers/docs/standards/tokens/erc-1155/
  • More on the EIP 721 proposal: https://eips.ethereum.org/EIPS/eip-721
  • Implementation by Open Zeppelin: https://docs.openzeppelin.com/contracts/3.x/api/token/erc721#ERC721
  • How to build, deploy, and mint an NFT with Web3.py in Google Colab. Please have a look at these four videos:
    1. Build a Solidity 0.8.12 NFT Smart Contract 2022: https://www.youtube.com/watch?v=SQ-chPSNgGw&list=PLw-9a9yL-pt0tD7ZBci5ybHy-T2XuHBtV&index=41
    2. Compile an NFT Smart Contract with Python: https://www.youtube.com/watch?v=HOJ-Xl9_FYg&list=PLw-9a9yL-pt0tD7ZBci5ybHy-T2XuHBtV&index=42
    3. Deploy an NFT Smart Contract with Python: https://www.youtube.com/watch?v=lL5s9FDYo64&list=PLw-9a9yL-pt0tD7ZBci5ybHy-T2XuHBtV&index=44
    4. Interact with an NFT Smart Contract in Python: https://www.youtube.com/watch?v=DjMoJEnnvXs...