The concept of programmable NFTs refers to non-fungible tokens that possess additional functionality or "smart" capabilities beyond simply representing ownership or uniqueness on a blockchain.
Traditional NFTs are often static and represent a digital asset, such as an image, video, or other digital content.
However, programmable NFTs aim to add programmability or dynamic features to these tokens. This programmability is achieved by attaching smart contracts to the NFT.
Smart contracts are self-executing contracts with the terms of the agreement directly written into code. When applied to NFTs, smart contracts can enable various functionalities.
- Royalties and resale rights: With programmable NFTs, creators can embed royalty mechanisms into the token. This means that every time the NFT is resold, a percentage of the resale value automatically goes to the original creator.
- Unlockable content or features: NFTs can be programmed to unlock additional content, special features, or access to certain areas based on specific conditions or triggers. For example, an NFT might grant access to exclusive content after a certain date or event.
- Dynamic or changing artwork: Artists can create NFTs where the artwork evolves or changes over time. This might be based on external factors, user interaction, or even the passage of time.
- Gaming and interactive NFTs: NFTs can be integrated into games, allowing for ownership and transfer of unique in-game assets, characters, or items. These assets could have their own unique properties or behaviors dictated by the smart contract attached to the NFT.
- Fractional ownership: Programmable NFTs can be used to represent ownership in fractions, allowing multiple owners to share and trade portions of high-value assets.
| Feature | pNFT | Conventional NFT |
|---|---|---|
| Smart contract functionality | Yes | No |
| Enforce royalties on secondary sales | Yes | No |
| Lock and unlock access to content | Yes | No |
| Create dynamic NFTs | Yes | No |
| Create new types of digital assets | Yes | No |
| Increased control for creators | Yes | No |
| New revenue opportunities | Yes | No |
| Improved user experience | Yes | No |
Use Cases
Here are a few examples of how pNFTs could be used.
- Music: Musicians can release pNFT albums that give fans early access to new music, exclusive behind-the-scenes content, and voting rights on future projects.
- Gaming: Game developers can release pNFT in-game items that can be used to unlock new abilities, levels, or characters.
- Finance: Financial institutions can release pNFT securities that can be traded on a decentralized exchange.
- Supply chain management: pNFTs can be used to track the movement of goods through a supply chain, ensuring transparency and accountability.
- Real estate: pNFTs can be used to represent ownership of real estate, making it easier to buy and sell property.
- Identity management: pNFTs can be used to create digital identities that are secure and verifiable.
pNFTs or collections of pNFTs
- CryptoKitties: CryptoKitties is one of the earliest and most popular pNFT collections. It allows users to collect, breed, and trade virtual cats.
- Raydium: Raydium is a decentralized exchange on Solana that uses a combination of AMM and order book liquidity. Raydium supports pNFTs, which can be used to create liquidity pools and trade pNFTs.
- Solend: Solend is a decentralized lending protocol on Solana that uses pNFTs to represent collateralized loans.
- Axie Infinity: Axie Infinity is a popular blockchain-based game that uses pNFTs to represent in-game creatures called Axies.
- Photo Finish Live: Photo Finish LIVE is a Solana-based virtual horse racing game that uses pNFTs to represent horses. Players can buy, sell, race, and breed horses in the game.
