Part 1: A comprehensive beginner guide
Part 2: Non-Fungible Token Standards
Part 3: Distribution methods
Part 4: Metadata
Welcome back to the fourth and final part of our NFT series!
In today’s article we will take a closer look at Metadata, exploring what it refers to and why it is crucial for any NFT project.
What is metadata?
In the context of NFTs, metadata refers to the information that describes the specific attributes of an NFT, such as its creator, provenance, and description. This data is crucial for verifying the authenticity and ownership of an NFT, ensuring that each one is unique and can be traced back to its origin.
To conclude:
- Metadata is like a digital fingerprint
- It contains unique information about an NFT
How does Metadata work?
Most ERC-721 tokens come with a standardized set of metadata which display attributes such as name, description and traits. As part of the minting process the metadata must be stored, this can be done via the IPFS or directly on-chain.
The Inter Planetary File System (IPFS) is a decentralized, peer-to-peer file storage system. When NFT metadata is stored on IPFS, the actual data is stored off-chain, making it more efficient and cost-effective. IPFS generates a unique hash for each file, which can be used as a reference on the blockchain. In most cases the metadata is frozen meaning it cannot be altered post mint. This is important since most NFT collection have traits which differ in rarity having an impact on the NFTs worth. If required, the metadata can also be left unfrozen. This is often used in gaming projects where the traits of an NFT are set to change depending on certain factors.
Storing NFT metadata directly on the blockchain involves embedding the metadata within the smart contract itself. While this method ensures greater immutability and security, it’s generally more expensive and may slow down the blockchain network due to the increased data storage requirements.
The Metadata can be viewed directly in the smart contract or on NFT marketplaces such as Opensea.
What can metadata be used for?
The main application for metadata in NFTs is providing the NFT with traits. Traits, also known as attributes or properties, are elements that distinguish one NFT from another within a collection. They give NFTs unique characteristics, making them more appealing to buyers and collectors. These traits contribute to the scarcity and value of an NFT, with rarer traits often commanding higher prices in the marketplace. For example, in the popular CryptoKitties collection, traits such as fur colour, eye shape, and pattern contribute to each CryptoKitty’s distinct appearance and desirability.
Types of traits
There are numerous types of traits, and they vary across different NFT collections.
Visual traits: These traits affect the appearance of an NFT such as colour or clothing. An example of this are the CryptoPunks collection, visual traits like different hairstyles, glasses, and facial expressions make each Punk unique.
Rarity traits: Rarity is an important factor in determining an NFT’s value. Some NFTs are intentionally created in limited quantities, with specific traits being more scarce than others. In the Bored Ape Yacht Club collection, some Apes have ultra-rare traits, like a solid gold fur, that make them highly sought after.
Utility traits: Some NFTs have traits that grant their owners access to certain benefits or experiences, like virtual events, special content, or real-world merchandise. For example, owning an NFT from the World of Women collection may grant access to exclusive community events or collaborations.
Combinatorial traits: In some NFT collections, multiple traits can be combined to create unique outcomes. For instance, in the Rumble Kong League, the combination of specific backgrounds, clothing, and accessories can create an entirely new appearance for a character.
Implementing Traits in an NFT Collection
Creators can implement traits in their NFT collections to enhance their appeal, diversity, and value. Here are some ways to incorporate traits into a collection:
Artistic design: The visual design of an NFT plays a significant role in its attractiveness. Creators can use a mix of colors, patterns, and artistic styles to make their NFTs stand out.
Rarity distribution: Creators should carefully plan the distribution of rare traits within a collection to maintain a balance between scarcity and accessibility. Too many rare traits can dilute the value of each NFT, while too few may discourage potential buyers.
Engaging the community: NFT creators can involve their community in the trait selection process, allowing members to vote on their favourite traits or even contribute their own designs. This approach can foster a sense of ownership and loyalty among collectors.
Utility and experiences: By incorporating utility traits that unlock exclusive content or experiences, creators can add an additional layer of value to their NFTs. The VeeFriends collection, created by entrepreneur Gary Vaynerchuk, is an excellent example of this, as each VeeFriend grants its owner access to a range of real-world events and digital experiences.