N, F, and T may just be celebrities now in the world of alphabets. Recently, those three letters have found their way to every lip in the tech space. Perhaps it’s the billions of dollars in trades associated with them, or maybe it’s the vibrant digital sub-culture that has sprung up and still waxing strong. Perhaps it’s the whole parallel reality being built out of what those letters represent, or maybe it’s just the result of the new direction of ever-changing human sentiments.
Suppose you’ve been under a rock or haven’t checked the news, with the letters put together, NFT, is an acronym for Non-Fungible-Token, a new form of digital certification based on the new web (tagged Web3) that guarantees ownership of any piece of digital content. They are unique cryptographic tokens that serve as an ownership container for digital content. Many content types have leveraged these tokens to establish ownership and provably transfer ownership, with videos and graphics being the most common. Some other content types include text, tweets, code, audio content, event tickets, etcetera.
While this means of ownership is crucial to the new web so that users generate content and independently and provably own the content created when published, what’s also important is how ownership is transferred or traded for some other form of value. The current media available to trade ownership primarily or secondarily are NFT marketplaces. There are some pretty interesting ones exist out there, the most famous being Opensea. How popular is Opensea? Well, the 2017 founded marketplace with over 1million followers on Twitter recently broke its monthly trade volume record of $3.4B after trades spiked in January 2022, resulting in over $3.5B changing hands in that single month. Perhaps, infamous is a better adjective to describe the digital assets marketplace.
That claim can be justified by considering the several recent mishaps with the NFT marketplace. Let’s consider how the NFT marketplace announced its $13.6B valuations the same day an artist complained of her work being plagiarized 86,000 times in its market. Probably nothing? We beg to differ. Artists put a lot of time and hard work into art creation, and if some web hoodlums and fraudsters do not respect that, marketplaces should at least set up hurdles to make fraud and plagiarism a little bit unbearable. The NFTmarketplace, in consideration, on the other hand, makes available a feature named “Lazy Minting,” which allows users to sell NFTs first before actually writing it on-chain to prevent the instance of wasted network fees. Of course, this is applaudable; it’s a feature other marketplaces have even adopted, but without a proper vetting system or identification system, this feature leads to more harm than good, as we’ve seen in the case of Arja, the victimized artist.
With point 1 in mind, let’s consider another challenge, earlier in an NFT creation process before it even gets to a marketplace like Opensea. Collections usually set up a storefront, i.e., the NFT project website, for primary mint or sale, before getting listed on Opensea for secondary exchange. Even at this stage, NFTouts have demonstrated their deviance. Adidas’ first Ethereum NFT airdrop is an interesting story to note. With 30,000 Addidas Original NFTs minted on Ethereum, 9,620 of them were offered for sale to the public after some early access sale and project reserve. They set a sale cap of two NFTs per customer, perhaps to guarantee approximately even widespread distribution. A rationally good plan, but what happened with the sale, they didn’t see coming. Neither could they stop it even if they did. The NFTs sold out in less than a second, with one person being able to purchase 330 of the tokens in a single transaction using a custom smart contract.
See full hack explanation here. Apparently, the engineer, let’s not use hacker although the lines are blurry, created a family of contracts and sub-contracts to do his bidding and from the price performance of those NFTs, made a killing despite the cost.
That’s not the only point to be made in regards to this topic. At least not after we take your mind back to the cartoonish dick picks that were sent unsolicitedly to the Ethereum address of Budweiser, the beer brewer, or the endless spamming of Cozomo de’ Medici, Snopp Dogg’s Pseudonymous NFT space persona. He testified himself that a marketplace that could solve the spamming problem would “rocket past Opensea.” We think he’s predicted rightly.
All of the aforementioned problems arise from a fractured foundation of the blockchain space that holds no one accountable. Developing a storey building of solutions on top of a fractured foundation only leads to a great fall as we’d expect. The almost non-existent ID system, as mentioned in the first case with Opensea, is the underlying problem with NFT marketplaces. Cameron Hejazi, the CEO of U.S.-based content and NFT platform, Cent, which sold Twitter’s former CEO Jack’s first Tweet, describes the problem with the most intuitive analogy — a whack-a-mole game. The instant you ban one, two, or three more unrecognised accounts, spring back up. The smart-contract family evasion of the Addidas NFT fits in the same shoe, unaccountable smart contracts roaming free.
We could tease and criticize the most famous NFT marketplace being easily penetrable to bots, fraudsters, and scammers; after all, it’s named OPEN-sea, but the scar cuts deeper than this single NFT marketplace. The flaw breaks through the epidermal layer of dapp platforms down to the dermal layer of chain architecture and infrastructure. If not addressed from that depth, attempted solutions will only be like a plaster on a sore wound.
Of course, a solution that still upholds the core tenets of the blockchain is critically needed. NFTs are maybe at the peak point now, but the fraud and plagiarism headlines plastered around the first page of a google search could quickly poison that positive sentiment. NFT marketplaces, new or existing, need to stand on a structure that still holds users accountable although maintains freedom and upholds privacy. A chain that does not know its users but knows that its users are real. This way, every address(es), user account owned or smart contract owned, belongs to a user verified as real although unknown to the chain.
The technology described here can best be seen with Concordium and the BictoryNFT marketplace on the verge of launching. Concordium, a public privacy-focused POS blockchain, combines freedom with accountability. To get on to the network, you need to complete a KYC process with notable and recognized Identity custodians around the world, who checks and verify that you are indeed a real person before you can get your initial address on the Concordium chain. After the Identity verification, the user receives a User Identity Certificate (UIC) and the initial account. The only parties aware of the connection between the initial account and the user are the Identity provider. However, for more privacy, the user can create additional accounts with the received Certification, which the ID provider cannot link to him unless there is a legal warrant that requires the user’s anonymity to be revoked by anonymity revokers and the ID providers working together.
Too complex to comprehend? Here’s an abridged version: You work with a third party, not Concordium, (Notable ID Provider) to get an initial account and a certificate. While the ID provider is aware of the connection of this initial account and you, creating a new additional account and transacting with it, keep your dealings private (The third party cannot connect it to you). However, if you’ve been a bad boy on-chain, the chain can come to a consensus to expose you and surrender you to the law.
If the hefty benefits of this approach are not yet visible across all of the dapps, especially marketplaces that would be birthed on a chain like this is not yet visible, permit me to bring you into the light;
- All accounts/addresses, although private, are verified to be real via this approach. Bots may exist at a minimal amount, but if they have badly behaved, their creator can be fished out and flogged at stake.
- There is an available framework to harness in verifying NFT smart contract authors before purchasing, disincentivising rug-pulling.
- Primary mint storefronts have a framework to implement a sale cap per user by allowing only level 1 (initial) accounts at the primary sale.
- To set up a firewall to combat spam is also a development that can be envisioned with such a chain architecture.
BictoryNFT marketplace by Bictory Finance, whilst in development, has been impressive enough to secure a grant from the Concordium, the blockchain’s first-ever grant as it’s on the verge of rolling out V1 of the product. In addition to leveraging this core layer from Concordium, the BictoryNFT marketplace will only host works from verified artists with a proven track record to ensure that it’s a market with only high-quality content. It will kick off with Bictory’s own natively designed 9,999 monumental NFT collection named Terrestria. A 3D and 2D spatial variation, full-IP rights transfer, funky swag collection inspired by 11 animals, some extinct, some still amongst us. This will be the only collection released by the team.
NFTs have won the heart of many, including ours; it will be a shame to see them come to an end because of the innumerable bad actors that now exist and perhaps, naively brand bad tags on them because of greed. Existing solutions and the ones in development can only do so much in identifying anonymous addresses with no accountability point. We know now that it’s only an endless whack-a-mole game. Unless we adopt this structure of holding users accountable, with no compromise to blockchain principles, we’ll whack and whack until our mallets get broken, and we powerlessly watch the NFTs we love get raided to oblivion.
Team Bictory Finance.