NFTs
NFTs are tokens that can not be divided into smaller units, are unique and not interchangeable. They can represent ownership of digital assets like art, music, but can also be used as tickets to real-life events, access keys, and more. Here are some properties of it:
- It’s unique and only one person can own it at a time
- It can be freely transferred to someone else
- It’s not divisible, you can’t use half of it
- Usually NFTs are part of a collection of similar NFTs, but each NFT is unique
- Anyone can create an NFT, or download a JPEG and call it an NFT, but anyone can see who created it and decide if it’s worth anything
- Usually they have an image that represents them and can be viewed on a marketplace, description, traits. For example, “green hair” can be a trait of an NFT, if the NFT collection contains multiple NFT characters with different hair colors. But it’s not a requirement, some NFTs don’t have an image at all
They can have more applications than simply being an image, here are some examples:
- Some projects issue NFTs that give access to beta versions of their games, airdrops of their tokens
- There are blockchain games that use NFTs as “items” that can be bought, sold, and used in the game
- Proof of ownership of a physical object, like a car or a house (as long as it’s legally recognized, of course, which is not common in most countries yet)
- You can wrap your crypto account into an NFT and sell it, so the buyer will get access to your account, account ID, and all the assets in it
- A musician can sell an NFT of a song, and the buyer will get royalties from the song’s sales
- NFTs can be used as tickets to events, and the event organizers can control who can enter by checking the NFTs
One more example would be a ticket to a flight, let’s analyze its properties:
- It’s unique, the same ticket doesn’t exist twice
- You can (depending on the airline’s policy) give or sell it to someone else, or buy it from someone else
- It’s not divisible, you can’t use half of it to fly half the distance
- It’s not interchangeable, you can’t use it to fly with a different airline
- There are many similar tickets, but they are not completely the same. For example, they can have different prices, conditions, seats, etc.
- Anyone can “print a ticket” and sell it, but only the airline can issue a valid ticket, and you can’t use a fake ticket to fly
Also, if some website has “NEP-171” in it, it simply means “NFT”. NEP-171 is a
technical standard for NFTs on NEAR, all NFTs on NEAR are NEP-171
1 tokens.
How to get NFTs
You can buy them on a marketplace, or mint them for free. Here are the most popular NFT marketplaces on NEAR:
There is also an NFT aggregator TradePort
Free mints
Minting is a process of creating an NFT. It’s usually done by the creator of the NFT, but sometimes the creator allows anyone to mint their NFTs. If the creator allows anyone to mint their NFTs for free, it’s called a “free mint”.
Sometimes creators give away their NFTs for free, either to anyone or with some conditions. You can find them on Twitter, Discord, and other social media. A good place to start would be the Slime Community Discord server. As much as I’d like to have a list of all free mints here, I wouldn’t be able to keep it up to date, so you should look for them yourself.
One of the main platforms that provide free mints is Shard dog, and there’s an NFT that is always given away for free for a subscription to a newsletter – NearWeek NFT. By the way, NearWeek is also a good source of information about the NEAR ecosystem.
Usually unlimited freemints like NearWeek NFT are not worth anything, but you might still want to mint them for fun or for memories of some events.
When you mint an NFT, you may be charged a small storage fee, usually between 0.01 and 0.05 near, keep that in mind. But your wallet will warn you about this, anyway.
NFT analysis
Back in 2021, people were buying useless NFTs for a lot of money, they were just expensive pictures. Now that the market is more mature, popular NFTs usually have a clear use case. If you’re looking to buy an NFT that will do something for you (give access to airdrops, increase in price, etc.), you should do a thorough research and not base your decision on the price and the picture alone. Of course, if you want to buy an NFT from your favorite digital artist just to support them, that’s a different story.
Some good indicators:
- Trading activity on the marketplace. If the last NFT purchase was 2 weeks ago, it’s probably not liquid and people are not interested in it
- The creator’s reputation. If the creator is a well-known person in the NFT space, a well-known artist or company, it’s more likely that the NFT will have some value
- The NFT utility. If it gives you access to something, it’s more likely to be valuable than if it’s just a picture
- The NFT supply. If there are 1000 of the same NFT or just 10, it’s more likely that the 10 will be more valuable, because they are more rare
- Community. If there’s an active community around the NFT, it’s more likely that the NFT will have some value, because the community will support it
Some flags that indicate that the NFT needs more research:
- There are 10000 NFTs, but only 30 of them are listed on marketplaces. They could all be owned by the creator (red flag), or in NFT staking contracts (green flag), or burned (green flag), or no one cares about them and people gave up trying to sell them (red flag), or something else
- The NFT creator claims that the NFT will give you some benefits, but there’s no information about it or it’s explained in technical words that you can’t understand. Usually, good creators can explain things they’re building in simple words, and bad creators use a lot of technical words to confuse you into thinking “it’s too complicated for me to understand, but looks like a smart investment”. In these cases, you should ask for help from someone who understands the topic and who you trust, or just skip the NFT
- The NFT creator is anonymous. It’s not a red flag by itself, but it’s a good reason to do more research. Try to assess the ability of the creator to deliver what they promise, and the likelihood of them running away with your money
- The NFT provides huge benefit that seem to be impossible to deliver. For example, 100% APY in a stablecoin. You need to analyze the business model, where the benefits come from, and if it’s sustainable. If you can’t understand it, it’s a huge red flag
- The NFT is a meme. There’s a 0.5% chance of doing a 100x, and a 99.5% chance of losing all your money. With experience, you can start to tell the difference between a good meme and a bad meme, but that’s not something I can teach you in the book because I have no idea how people do it, lol
Soulbound NFTs
Soulbound NFTs (also called SBT, Soul-Bound Tokens) are NFTs that can’t be transferred to another account. They can be used as proof of ownership of a physical object, like a car or a house, where the transfer process is more complicated than just sending an NFT to another account due to legal reasons. The NFT creator can make it soulbound if they don’t want you to sell it, or if they want to make sure that only you (or other specific people) can own it. But it’s not a guarantee that you can’t sell it, because you can sell the whole account that owns the NFT, and the NFT will be transferred with the account.
Staking
Some NFTs allow you to stake them to receive rewards. For example, you can stake “NEAR Tinker Union” and get $GEAR tokens, or stake El Cafe Cartel to get $CAFE. This mechanism makes the NFT more valuable, because it gives you a way to earn money with it, increasing its demand. At the same time, the supply is decreased, as more NFTs are staked and less are available for sale.
To stake an NFT, you would usually navigate to the project’s website, connect your wallet, and follow the instructions in the project’s documentation, or ask in the project’s community.
Sometimes projects partner with NFT staking platforms, such as Jump DeFi or Paras, and you can stake your NFTs there. In this case, you would need to connect your wallet to the platform, and follow the instructions of that platform.
Creating your own NFT
If you want to create your own NFT, there are 2 main ways to do it:
- Use a platform that allows you to create NFTs without coding
- Write a smart contract of your NFT
Most people use the first way, because it’s easier and more accessible. The second way provides more control over the NFT, but it’s not needed for most use cases. Here are some popular platforms for creating NFTs:
- Paras - a marketplace that allows you to mint NFTs
- Mintbase - a platform that allows you to mint NFTs and create your own marketplace
- Enleap and Bodega are NFT launchpads, but at the time of writing, Enleap doesn’t work, and Bodega is only available for whitelisted projects with no public information. If you want your project to be on a launchpad, I recommend contacting them directly to discuss the terms
More technical info about NFTs: in nomicon