Hi Secret Agents!
This post will introduce the concept of Secret NFTs: non-fungible tokens with programmable privacy features that live on Secret Network. These unique items can be used for a variety of purposes, but generally, we believe tokens ought to be private if they represent our personal goods and experiences. Secret NFTs are perfect for these types of use cases.
Secret NFTs can be game-changing for all kinds of industries: art, science, entertainment, business, politics, and society overall. However, this would not be possible without contracts running on a blockchain with privacy by default. Learn more about our vision and how you can join the effort to bring Secret NFTs to life!
What's a Secret Token?
You might have heard Secret Tokens are now being deployed on the Secret mainnet! Recently, we introduced a model for privacy-preserving tokens, inspired by the ERC-20 standard. SNIP-20 (a.k.a. Secret-20) is the initial example of a fungible asset with encrypted inputs, outputs, and state. In other words, balances and transactions are fully private.
Imagine a system where any operation you do, across any DeFi service (be it trading, staking, lending, providing liquidity, issuing synthetic tokens, etc.) happens with complete privacy. That’s the vision of programmable privacy and Secret Network.
Recently, we introduced a privacy-preserving, fungible Secret Token that is backed by SCRT, the native currency of Secret Network. “SecretSCRT” is the first implementation of the SNIP-20 standard. It allows you to deposit X amount of SCRT (which is not private by itself) and obtain X amount of secretSCRT, the wrapped privacy token.
What's a Secret NFT?
Very simply, a Secret NFT is a Secret Token that is non-fungible. Perhaps one of the most confusing words in all of blockchain / crypto, “fungibility” is not just a spectrum. It’s a complex idea with a simple premise: things are always either the same or different. If exchanging two items would be meaningless, they are fungible. For example, if you and I both give each other a dollar, the only difference would be the serial numbers and relevant context of minting. You might say dollars are mostly fungible, but perhaps non-fungible if you care about the serial number or how they were created.
Essentially, non-fungible tokens are distinct from each other, and they are usually one of a kind.
“Non-Fungible Tokens are containers for uniquely identified resources, which are represented by NFT metadata. NFTs enable rights of ownership and control over resource identifiers. They may also contain other rights, within specific contexts and use-case.”
Verification and Validation
There is a common misunderstanding of the difference between objective verifiability of claims and the dynamic process of validation. Secret NFTs are unique in that validation happens without opening verifiability to everyone. In other words, verifiable ownership of goods and experiences does not have to be public! On Secret Network, the process of validation occurs without compromising any private data, including proofs of authenticity and transfers. This way, our ecosystem is flipping the script of cryptoart, in order to empower content creators and protect digital rights!
Who cares about NFTs?
While NFTs have spent a good amount of time living in the shadow of ERC-20 tokens, non-fungible ERC-721 tokens and more complex ERC-1155 "multi-tokens" are gaining momentum and creating opportunities for all kinds of creators, including visual artists, game designers, musicians, etc. There has been over $134 million worth of NFT sales volume on Ethereum, according to NonFungible's market history. Below is a graph showing an exponential increase of the number of NFT contracts deployed on Ethereum.
Core Characteristics of NFTs
- Uniquely identifiable so that instances cannot be duplicated or copied without detection
- Ownable with associated rights and capabilities which can only be transacted and transferred by the owner(s) of the asset
- Resolvable to enable discovery, validation, verification of assertions and linked resources
- Decentralized with no requirement for a central issuing agency
- Persistent to not be reliant on the custodianship or continued operation of impermanent organizations
- Cryptographically verifiable to prove assertions / resources have not been corrupted and to demonstrate control of authenticated resource identifiers
- Stateful to establish a sequential order in which a metadata and resources are recorded, for provenance as well as temporal and relational integrity
Interchain Secret NFTs
Standards are critical for adoption, and NFTs are no exception! The first NFTs on Ethereum, Cryptopunks, were actually developed prior to the introduction of ERC-721, so they recently had to introduce a wrapper so they can be held in wallets and traded on exchanges like Rarible and OpenSea.
Interoperable NFT and metadata standards are necessary for tokenized digital resources to be virtually addressed, described, authenticated, controlled, or exchanged across blockchains and through the web. By presenting a set of canonical use cases and user stories, the InterNFT Working Group aims to identify technical requirements of developing standards for Interchain NFTs and metadata.
- Interchain Standards for NFTs should provide an interoperable, standard way to own, authenticate and transact with non-fungible tokens across blockchain networks.
- Interchain standards for NFT metadata should make information about the resources which are linked to NFTs machine-readable, machine understandable and verifiable, regardless of where this metadata is located, across blockchains, the web, or offline.
Together, these standards will unlock the potential for NFTs and metadata to become as pervasive and interoperable as URLs are on the web. This will provide a significant renovation to the architecture and utility of the web, by providing stateful and verifiable representations of unique web resources.
Requirements of Interchain NFTs
Here are the necessary capabilities of Interchain NFTs: 1) Mintable, 2) Burnable, 3) Ownable, 4) Transferable, 5) Non-transferable, 6) Lockable, 7) Mutable, 8) Immutable, 9) Re-fungible, 10) Divisible, 11) Composable, 12) Conditional
We believe that privacy by default should be a requirement for experiential tokens, and our community is developing a standard approach for designing and building non-fungible tokens with programmable privacy features.
As Ian Lee of IDEO CoLab said, “NFTs are usually things (art, fashion, game assets); it's a lot more interesting when they’re experiences.”
Characteristics of Experiential NFTs
- Ownership that shapes reputation
- Badges enabling memberships
- Links in global communities
- Composable products
Let's Contribute to the InterNFT Working Group!
All contributions are welcome! Our community is planning to add new use cases, examples and user stories. Please make suggestions via pull requests on the working draft document.
Format: Context + User Needs + Unique Challenges + Distinctive Requirements
Contribute to Secret NFTs!
If you're interested in contributing to the SNIP-721 spec, jump into the GitHub repo linked below:
To participate in the conversation around Secret NFTs, you can also join our dev committee, which meets every Monday at 3pm UTC. There's also an official Discord channel for discussion about Secret NFTs and their use cases. Everyone is welcome to participate in developing a standard for these privacy-preserving Secret NFTs, which are intended for usage across the multiverse of blockchains.