How Are NFTs Authenticated?

The NFT concept is new to most; the term “non-fungible token” skyrocketed into the mainstream from relative obscurity within an esoteric group of cryptocurrency aficionados. 

The script changed in early 2021: NFT collectors suddenly started spending thousands to sometimes millions of dollars to buy various JPEGs and GIFs on the Internet. 

With so much money flowing into the evolving NFT marketplace, there is a dire need for NFT verification services. 

How do I know that the NFT I’m buying is legit, instead of some shoddy reproduction created by some scammer? 

The following guide explores how NFTs are authenticated.  We’ll talk about a handful of mechanisms being implemented to protect NFT collectors. We’ll debate the question of which of these schemes will see mass adoption as the NFT market matures.

The NFT space is still in its infancy and a variety of NFT authentication methods are being used, each of which offers specific advantages to the end-user. 

What Aspects of an NFT Need to be Authenticated?

The first question we need to ask is what exactly is it that we need to authenticate about an NFT

There are basically two factors to consider:

  1. Authenticity — Who created the NFT and who currently owns it?
  2. Originality/rarity — Is the work the first of its kind and unique or are there similar/derivative works?

First, and most importantly, collectors need to verify the source of the NFT and its rightful owner. 

Next, because the value of an NFT is partially based on rarity, we need to verify that the artwork being minted is not a copy or derivative of previously existing work. If the artist is minting several copies or slightly revised versions of a work, then its value is questionable. 

Moreover, since anyone can copy an image file and mint it as an NFT, one must be able to prove the creation is tied to a particular creator, or the most valuable component of NFTs, the provable scarcity and provenance, goes out the window.

In the case of physical art, there is a master and there are often prints (or copies) of the original work. 

The master holds the most value. 

Next, artist-signed prints have value to some collectors. 

However, unsigned prints have very little value. They can easily be copied so they have no inherent rarity.

The same might be true for digital art. The master NFT holds the most value. Limited edition copies minted by the artist might also have value to some collectors. Copies not minted by the artist floating around the internet are essentially valueless since they can be replicated an infinite number of times.

How is the Authenticity of an NFT Verified?

In the case of verifying that an NFT was minted by the original artist and not a scammer, we rely on the public record. Records of NFTs minted on decentralized blockchains are immutable, which means the record can’t be changed by anyone– at least not without a prohibitively expensive effort, but that’s a rabbit hole we’ll jump into another time. 

Thus we need only look at the record for a particular NFT to determine when it was minted as well as its ownership history. 

This is easier said than done, however; many art collectors will outsource this step to a trusted third party. 

For example, an artist by the pseudonym “Beeple” sold a work of art called “Everydays – The First 5000 Days,” for $69 million. The NFT was offered by Christie’s auction house. Collectors can rest assured that high-end auctioneers such as Christie’s have done their due diligence to be sure that the NFT being auctioned is authentic– a sort of authentication by proxy.

Most NFTs, however, are sold on centralized NFT marketplaces such as OpenSea, Rarible, Mintable, and others. 

Each NFT marketplace handles NFT authentication differently.

NFT Marketplaces and NFT Authentication 

Many NFT marketplaces offer some level of NFT authentication service, but not all of them. 

Marketplaces that do offer this service approach NFT authentication from a variety of angles: 

  • OpenSea, the largest NFT marketplace, offers no assurances that an NFT is original. The buyer must do their own research. 
  • Mintable, SuperRare, and Foundation only sell work by hand-curated artists. 
  • Nifty Gateway offers both hand-curated and post-verified NFTs. 
  • Rarible vets artists and performs what is known as a “reverse image search” to identify copies and near copies of the work. 

This list represents a small handful of NFT marketplaces and their NFT verification protocol; new NFT marketplaces are popping up daily and each has its own system for verifying (or not) the NFTs being sold or auctioned on their sites.

How is the Rarity of an NFT Authenticated?

Verifying the uniqueness of an image is far more difficult than identifying the authenticity and owner of an NFT. 

A human being should be able to easily identify a copy or modified version of an image merely by looking at it. When comparing a handful of images, it would be tricky to fool a diligent human. However, it would be impossible for a human to search for every copy or near copy of an image manually. 

Computer algorithms can help us with due diligence. 

Rarible, for example, performs a reverse search on images to identify copies and similar works. 

What is a Reverse Search?

With a traditional image search, the user searches for images labeled or tagged with a particular keyword or phrase. Google Images is the most commonly used example of this. 

However, Google also lets users do a reverse search to find images that are similar to the NFT in question. Search results also include information such as the date each image was posted online. Stock image sites such as Adobe Stock also use this reverse search method to identify similar images.

So how does a reverse image search for NFTs work? 

Perceptual Hashing for NFT authentication

In identifying similar images via computer, a technique known as perceptual hashing is employed. 

Humans perceive colors and shapes, not pixels. We can compare images instantaneously. However, computers can’t determine that two images are similar just by comparing the pixel data. An image can be slightly modified — resized, cropped, or adjusted in other ways — and we end up with a completely different list of pixels.

We can solve this problem with the process of perceptual hashing. 

Perceptual hashing 101

Hashing is the act of reducing a data set to a much smaller set of data that can more easily be compared. Perceptual hashing breaks an image down into perceivable traits such as shapes and colors. 

The hash file can then be compared with other hashed files to find similar patterns. 

A computer algorithm can identify similar images using perceptual hashing. However, the computer isn’t able to make the final call on originality. It can only bring similarities to the attention of a human. The human can then make the final call. 

It’s not a perfect process, but it does streamline the authentication process for the end decision maker greatly.

Pastel is pioneering a near-duplicate NFT detection strategy using a mix of deep learning models using Tensorflow with Keras Applications, which transform each NFT into a fixed list of over 10,000 numbers (the ‘NFT fingerprint vector’). Then, it assesses the correlation between an NFT fingerprint vector and all other existing fingerprints on Pastel and marketplaces like OpenSea, and open databases like Google. Finally, it churns out a relative rareness score between 0% (the NFT is identical to another) or 100% (it’s completely unique.)  

Final Thoughts On How NFTs are authenticated

As you might imagine, NFT verification services are invaluable to serious collectors. Presently, a variety of NFT verification schemes are being used by NFT marketplaces and art auction houses. 

The NFT authentication process may involve humans and computers.  

While humans are great at vetting artists, they’re not so great at manually searching for images that might be similar. And computer algorithms alone can’t make a final determination on an image’s rarity. 

The rarity of an NFT is relatively simple to verify by using a combination of perceptual hashing and human verification. 

However, for the casual collector of NFTs, simply going by a blue checkmark and the proper link on a popular marketplace like OpenSea might be enough– but as you can imagine, this exposes one to a great deal of risk. 

When it comes to peer-to-peer NFT trades, the ecosystem still has a long way to go to ensure a trustless, fair, and fool-proof system.

NFT Copyright: What Artists and Collectors Should Know

NFT art is soaring in popularity due to the blockchain’s ability to offer a multitude of features that appeal to both creators and collectors. 

Artists continue earning royalties for the same artwork from the sales in the secondary market, which isn’t possible in the traditional art scene. 

Collectors enjoy advantages that weren’t possible before blockchain technology, such as an undisputable artwork’s transaction history and provenance, scarcity, and liquidity. 

However, the NFT ownership concept is more complicated than meets the eye, and it often trips up many.

But what do I actually own? 

What if someone just screenshots your art? 

Can I sue someone if they print my NFT on a shirt?

The answer to all of these questions is a nebulous “it depends.”

When someone buys an art NFT, they don’t purchase the artwork itself but the token that represents it. 

Owning the token isn’t necessarily the same thing as owning the copyrights of the underlying asset, unless it was specified in the underlying contract. 

The following guide explores what NFT copyright is, and what both creators and collectors should know about their NFTs. 

Copyrights and intellectual property rights

Copyright is a bundle of rights that specify what’s ok and what isn’t, regarding things like reproducing and distributing copies of the work, preparing derivatives based on the original work, displaying the work in public, and performing the work publicly, as regulated by 17 U.S. Code § 106.

Purchasing an NFT doesn’t transfer these rights to the buyer automatically. Unless an external agreement (17 U.S. Code § 204) is made between the artist and the purchaser,  the artist who created the original artwork remains the copyright holder.

The artist can transfer the copyright, grant a license for specific purposes, or limit the NFT’s use in some way. Agreements used for transferring rights must be coded in the smart contracts or expressed in written terms elsewhere.

Intellectual property (IP) is a broader concept that can refer to any product of the human intellect that the law protects from unauthorized use by others. Patents, copyrights, trademarks, and trade secrets all fall into the realm of IP.

Again, the only way an NFT buyer can retain IP rights is through an explicit agreement signed by the creator of the original artwork.

Standard license agreements for NFT ownership confer the rights to use, copy, display, resale, and gift NFTs. Granting a license of copyright and IP to the buyer through smart contracts or external agreements is also common. Some NFT projects permit commercial use, like CryptoKitties. 

CryptoKitty owners can use them to commercialize their own merchandise, given that they don’t earn more than $100K per year. Another well-known NFT project, Bored Ape Yacht Club, has generous IP terms similar to CryptoKitties. For example, owners are allowed to create characters around their apes or print them on their personal belongings.

Copyright Terms of NFT Marketplaces 

Although there’ll always be exceptions, we can say that in open marketplaces like Opensea and Rarible, artists license the NFTs to the buyer and not to the marketplace.

In marketplaces where only exclusive NFT collections are sold, the marketplace usually owns the NFTs and the related IP rights, like in the case of NBA Top Shot.

Curated marketplaces like Superrare, MakersPlace, and Nifty Gateway, artists are expected to grant licenses for display, distribution, and derivative rights, for promotional activities. Some marketplaces require artists not to mint multiple NFTs for the same artwork.

On Rarible and MakersPlace, artists can apply a custom license to their NFTs, in addition to platforms’ own standard agreements.

When an NFT is resold, the general practice is that any resale activity terminates the former owner’s rights and the current owner of that NFT becomes the new license holder.

NFT Copyright: What You Should Know as a Collector 

As a rule of thumb, NFT owners generally only have the copyrights to resale and gift their NFTs. Please don’t assume you can create derivatives of the underlying artworks and sell them for commercial purposes by default. 

Some projects may be cool with it, others may not. 

Some projects may give holders every possible right under the sun with their NFT, whereas others insist on keeping the project’s branding, and every NFT, held close. 

Always research the related platform’s license terms and conditions yourself if your intentions are beyond reselling the artwork in the secondary market. Otherwise, copyright infringement issues may arise.

It would help if you also bought only on platforms you trust. Always double-check if the artist verifies the related artwork as theirs. In May 2021, artist Xcopy, a famous figure in the crypto art community, tweeted about a fraud regarding his art on a new platform called Hen. 

This isn’t a rare event in the NFT world; always check if you’re buying an original work of art.

NFT Copyright: What you Should Know as an Artist

Artists should only mint their own creations. If the work is done in collaboration with others, their authorization is necessary.

It seems obvious, but in the Wild West vibe of early NFT marketplaces, it seems that you can get away with minting shoddy reproductions of other works. 

Remember how the blockchain tracks every transaction ever? While NFT copyright law is in its wobbly baby deer leg phases now, it’s not difficult to algorithmically track financial and copyright crimes. 

In the NFT world, many frauds take place. If you happen to discover your art is being sold as an NFT by someone else without your consent, you can claim copyright infringement against the sellers.

As stated above, unless you transfer the copyrights to buyers with an external agreement, you hold the copyrights of your work. However, if you did the NFT artwork initially under an employment contract, it might be regarded as work for hire, according to 17 U.S. Code § 101. In this case, the employer might hold the copyrights.

As a precaution against people with bad intentions, you can release your artwork as an NFT before sharing it with someone else.

Finally, like collectors, artists should also be wary of the platform they sell their art and terms and conditions regarding copyrights.  

Final Thoughts: Expect NFT Copyright Law to Evolve

Both collectors and artists should be aware that NFT technology is very new and many issues regarding IP rights are not completely clear. 

Understanding the underlying technology is necessary for both parties, along with the legal aspects. In case of conflicts, consulting lawyers for legal advice is inevitable.

The Most Common NFT Scams (And How to Avoid Them)

In August 2021, a prominent NFT collector called Pranksy paid more than $336,000 for a fake Banksy NFT. 

Pranksy first learned about the artwork from a member of his Discord channel. The auction was also advertised on Banksy’s official page. 

About an hour after placing his offer, the seller of the NFT was accepted by the seller. But Banksy’s spokesperson told BBC that Banksy wasn’t involved in the creation of any NFT. 

Pranksy had been scammed. 

As it turned out, Banksy’s site was hacked and the fraudulent NFT auction was advertised, creating the perfect storm for a collector aptly named “Pranksy” to get scammed. 

Oddly enough, the hacker returned all the money to Pranksy except for the gas fees of roughly $6,700, only after Pranksy revealed who had shared the auction in the Discord and followed him on Twitter, likely spooking the scammer with fear of inevitable consequences. 

However, not everybody has been or will be as lucky as Pranksy when it comes to NFT scammers. Some scammers use technologically sophisticated techniques to exploit security gaps, as happened in the Banksy-Pranksy case, while others aim to gain trust to obtain wallet holders’ private keys. 

As the cryptocurrency and NFT ecosystem grows in sophistication, so do the potential avenues for scammers and hackers. 

The following guide explores the most common NFT scams and how to avoid them. 

Artist Impersonation

A vulnerability of the NFT space is that anyone can mint anything as an NFT. One trick fraudsters use is to mint the artworks of reputable artists without their consent and list them for sale on identically branded pages. 

This scam can easily occur on NFT marketplaces where no artist verification is necessary, and in rare cases, imposters manage to verify themselves as the artists whose works they steal. Scammers are always on the lookout for loopholes. So, even on sites with a verification process, they might detect a way to verify, especially if the process is not hard to pass.

One such case happened to illustrator Derek Laufman whose work was sold on the Rarible platform by a verified seller. Laufman learned about the issue when his fans informed him on social media, but only after one fan had already bought the forgery.

Fake Customer Support

Scammers can manipulate you by gaining your trust in online communities. They can easily use fake names, invent phony social channels, and pretend to be the employees of a company.

For those veterans in the cryptocurrency ecosystem, a scammer pretending to be an employee on Telegram or Discord is just another day in the office. However, it might not be as easy for the influx of new art collectors navigating these new channels for the first time, 

In August 2021, Jeff Nicholas joined a discord channel to find a solution to a royalties problem he encountered on the NFT marketplace OpenSea. He was invited by a member named “Pascal | OpenSea” to another discord channel called “OpenSea Support Server.” Nicholas didn’t suspect anything. The fake customer support suggested Nicholas share his screen to solve the issue at one point. The screenshot he shared included the QR code synced to the seed phrase of his crypto wallet. Shortly after, around 150 ETH had been stolen from the wallet.

Another victim of this type of fraud was Sohrob Farudi, who lost around 250 ETH worth of NFTs after scammers had deceived him to be the founders of the Bored Ape Yacht Club.

Phishing Emails and Offers

One of the oldest devices of tricksters is sending emails or posts with malicious links aiming to steal your data. This ruse can cheat even the more crypto-savvy among us. In June 2021, famous NFT artist Fvckvender, tweeted about a fraud, which caused him to lose around $4M. After opening a .scr file sent him via DM on Twitter with a virus, his Metamask wallet was hacked.

Another type of this scam is sending emails with fake offers on your OpenSea NFTs. They come with an OpenSea impersonation and try to bait you into clicking the links, following the steps, and ultimately sharing the private keys of your wallet. 

They may also try to scare you with security issues on your OpenSea account to trick you into clicking the embedded link.

Replica and Fake Stores

Replica stores are nearly exact copies of the legitimate NFT stores and marketplaces, using the same logos, similar website layouts, and list the same NFTs as the original stores.

For example, there may be an OpinSea.io as a replica for OpenSea.io or a nftygatwey for a Nifty Gateway.

Some fake NFT marketplaces don’t copy the NFTs of the well-known NFT stores, they seem to be selling unique NFTs that don’t actually exist. For example, you could end up buying a fake BAYC with attributes that don’t exist or simply spending ETH on an NFT that never ends up in your wallet. 

Further, these marketplaces could also take personal data like credit card information.

Scam Airdrops and Giveaways

Scammers are always coming up with new phishing tactics. For example, the announcement bot of the Fractal discord channel was hacked. Fractal is a new NFT gaming marketplace founded by Twitch co-founder Justin Kan.

The hacker posted an airdrop announcement on the official channel, and 373 Discord members followed the fake link in the message. Around $150,000 worth of Solana (SOL) was stolen.

Another way fraudsters exploit airdrops is by sending them to public wallet addresses. When wallet owners interact with them, such as listing them for sale or moving them to another wallet, security gaps may arise. 

For instance, if you see a suspicious new NFT in your wallet, don’t be so eager to list it for sale– by “approving” the sale in your wallet, you may actually be signing a transaction to spend all of your ETH, or transfer your NFTs, or whatever the maliciously programmed contract intends. 

Recently, the OpenSea team announced that they fixed an NFT phishing attempt via malicious airdrops that could have resulted in emptying the victims’ wallets.

Rug Pulls

Sometimes, the NFT project itself is fake; shortly after it’s launched and backed by the investors, the founders dump their NFT holdings and disappear. This is called rug pull. 

For example, a scammer promised his fans to mint 8,000 randomized 3D artwork but instead delivered 20 emojis and ran away with 1,000 SOL. Another well-known rug pull case is Evolved Apes NFT collection, whose creator disappeared with $2.7M. 

This type of scam is widespread in the NFT world. It’s estimated that $30M got lost due to rug pulls during September/October 2021 NFT drops. 

Final Thoughts: How to Avoid NFT Scams

Safety starts with doing your due diligence. Orient yourself around the legitimate NFT stores and marketplaces like OpenSea, Nifty Gateway, and SuperRare– and follow their corporate communication accounts. 

But, keep in mind that many fraudulent acts can also occur on these sites; OpenSea may be the largest NFT marketplace, but since anyone can create and sell NFTs here, the risk remains. 

This doesn’t mean unverified collections are not necessarily illegitimate, but you’ll likely be safer purchasing from verified accounts. 

Don’t forget even if the artists and collections are verified, there can still be fraud. You must do in-depth research before investing in an NFT project.

Word of mouth goes a long way, but it’s not a foolproof system.

Be part of the watchdog crusade against scam projects; when you observe suspicious activity, you can report it here on OpenSea.   

Be very careful about how you use your crypto wallets. Only sign on those websites which you trust.

When you move NFTs from one wallet to another, always check if the pasted address is exactly the same as the copied one, as some malware can copy and paste a scammer’s address before you send. 

Use two-factor authentication (2FA) to log into wallets, exchanges, and NFT stores to add another layer of protection against hackers and phishers. 

Frauds may happen in every social and community channel. Be careful whom you deal with. Question every link, think multiple times before clicking. 

As the Fractal team shared in an article after the recent airdrop scam, “there’s no undo button in crypto.”

And most importantly, never ever share your private key with anyone. No customer support agent anywhere will ever ask you for your private key, and if they do, you should refuse and use a different service that takes their customer’s funds more seriously. 

What Is Art Blocks? An Exploration into Generative Art

Art Blocks is an Ethereum-based platform that offers distinctive, programmable, and on-demand generative non-fungible tokens (NFT) art to collectors globally. It’s also the first blockchain-based platform to provide on-demand generative art output. It accomplishes this through NFT drops, a process in which a user mints an NFT but has no idea what they’ll get as an end product.

Generative art isn’t an entirely novel concept, but the Art Blocks team largely pioneers its blockchain-based adaptation. Generative art’s influence on the non-fungible token (NFT) industry has been swift, generating substantial interest among creators and collectors alike. 

The project’s series of colorful “Squiggles” generated over $850 million in sales in 2021, making it the world’s fourth-best-selling non-fungible tokens (NFT) project up to date.

The following Art Blocks guide goes over the project, how it works, and what sets it apart from other popular generative art blocks. If you’re new to the NFT space, don’t get thrown off by some of the terms throughout– you’re picking a very exciting place to start! 

What Are Art Blocks and How Does It Work?

Before diving into what Art Blocks is, you should have a good understanding of the power of non-fungible tokens (NFTs). 

An NFT is a blockchain-verified deed of ownership to a single digital asset, such as a video file, picture, artwork, or something entirely different. These tokens representing one-of-a-kind digital collectibles are created and stored on blockchains such as Ethereum. In contrast, the actual image or video file formats are hosted elsewhere to not pack the blockchain with too much data. 

So, what exactly is Art Blocks and where does this project fit into the NFT movement? 

Art Blocks is a platform for curating programmable artworks, which are  saved and traded as NFTs on the Ethereum blockchain. It’s a generative art system that enables collectors to create tokens without knowing exactly what they’ll get beforehand. The artist creates a piece of code that is inserted into the platform and generates random combinations of the variables. The script is kept on the blockchain, and most works are created with p5.js,  a JavaScript framework that supports creative coding.

The Art Blocks platform enables artists to submit an algorithm that creates one-of-a-kind art pieces in a given style. Artists can also establish a mint price and a limit (cap) on the number of pieces in every single collection. If a user likes a certain piece of artwork, they can mint one for themself. 

First, a seed, or random hexadecimal string is created. 

Then, while remaining consistent with the aesthetic of the artwork collection, each element in the seed defines an attribute of the artwork. For example, based on the color property of their randomly generated hexadecimal string, one person could get a red rendition of the artwork, while someone else would get more blue tones. 

The final product might also be a static photograph, a 3D model, or an interactive experience in many formats.

This element of surprise adds to the NFT minting process and ensures that every single collector has a fair chance of minting a unique piece.

To mint a piece generated by Art blocks, users will need to install MetaMask and connect both together. 

The artwork is stored on the Ethereum (ETH) network via standard ERC-721 compliant non-fungible tokens after being generated. This standard enables users to instantaneously access NFTs on marketplace sites like OpenSea, where they may resell their art pieces to other NFT collectors.

Art Blocks receives 10 percent of the mint price as a fee, and the artist keeps the remainder for the original sale. Art Blocks also deducts a 2.5 percent charge from secondary purchases on NFT marketplaces like OpenSea, while artists receive a 5 percent royalty. Artists tend to love this feature since it allows them to receive ongoing royalties from their work, which is unusual in the traditional art world.

The Types of Art Blocks Projects

Art block projects may be divided into three categories: Curated, Playground, and Factory.

Curated:

Art Blocks Curated is the highest level for generative art NFTs and also the Art Blocks product suite’s most meticulously curated offering. 

Collaborators or individual artists submit work, which is then reviewed and approved by the Art Block curation board before going online. These inventive releases by reputable artists tend to demonstrate artistic and technical range interwoven with the artist’s individual creativity. 

Playground: 

The Playground collection is essential for artists who have already had a curated release or drop and wish to showcase their talents even further. Art Blocks doesn’t really vet individual projects, but the artists are well-vetted, so you know they’re of great quality. The term ‘Playground’ refers to the area where artists can explore and express their ideas.

Factory:

Curated projects take about two years to finish due to the huge increase in the number of applicants. As a result, the Art Blocks development team created the Factory area, allowing novice designers to participate in drops. The team still selects and distributes artworks on a regular basis, but they are usually only inspected to verify that they are working and not blatant duplicates of other artworks. 

Artists maintain the responsibility and final say on marketing their own pieces since Art Blocks doesn’t strongly promote these releases as much asides from the platform general brand promotion. So, it is up to the artists to personally promote their works.

A Brief History on Art Blocks

Art Blocks was launched in November 2020 by Erick Calderon, nicknamed Snowfro. 

Snowfro claims to have got the notion for an Art Blocks sort of project after a personal encounter in 2017 when claiming Cryptopunks. Snowfro managed to manipulate the system and carefully acquire the rarest accessible assets at the moment, which were the zombies, due to his technical expertise and understanding of how smart contracts functioned. 

He sought to use generative art to build a system that allowed no one to foresee or alter the precise type of asset they would get. At the same time, Snowfro also wished to encrypt the asset’s properties within the code, believing that this would give each iteration more legitimacy. 

He was intrigued by this idea of provenance combined with the variety of generative output.

The uniqueness of his ideas appears to appeal to the general public. In 2021, its first calendar year, Art Blocks has already exceeded $100 million sales volume from over 9,000 traders around the world.

Its popularity skyrocketed in March 2021. Several things may have led to this exponential expansion, including the publication of the Fidenza collection by famous developer Tyler Hobb, as well as community growth and market interest around other NFT projects like Bored Ape Yacht Club.

Final Thought: What Sets Art Blocks Apart from Other NFT Collectible Projects?

Art Blocks is unique among other NFTs because of its surprise element, and it has attracted some substantial price tags. It has a distinct advantage over other NFTs due to its use of algorithms for generative art. It integrates collectors into the creation process, allowing them to mint a one-of-a-kind interpretation of their preferred artist’s concept.

Art Blocks has become a valuable target for NFT investors, especially as the system gains momentum and the curated collections gather more interest. The platform has a ton of potential for collectors, traders, and artists alike. 

Top NFT-Based Games: Play-to-Earn Meets the Blockchain

Backed by blockchain technology, NFT-based games incorporate player-owned economies, providing gamers monetary incentives to play.  

Most of these games offer much more than just one single gameplay. They’re actually social metaverses where players are encouraged to actively participate in future game development. These economies are built around games’ native currencies. 

The following guide goes over the most popular NFT-based games. 

As you’ll learn, the explosive growth behind NFT-based games is due to the increasingly more robust and versatile functionality of the games. 

 Axie Infinity: Battle, Collect, and Breed Axie Characters

The Pokémon-style blockchain game Axie Infinity became very popular because players can actually make a notable income simply just by playing it. Around 50% of its users come from the Philippines and Venezuela where, due to pandemic-related lockdowns, many people were forced to find alternative income sources. Today, Axie Infinity’s total market cap is around $6.2B, and its price gravitates under $100. 

Axies are fantasy pets that players can battle, collect, and breed, and each Axie is an NFT. The entirety of the game’s play-to-earn model is based on these three aspects. You can earn in-game tokens by winning battles, collecting and selling Axies. Players can create new Axies by breeding the existing ones; because these newly born (“minted”) Axies are also NFTs, the player can sell and trade them in the Axie Infinity marketplace.

AXS is the in-game token that can be bought and sold on third-party exchanges, such as Binance and Coinbase. It’s also a governance token, meaning its owners can influence the game policies.

The disadvantage of Axie Infinity is that at least three Axies are required to start playing. This initial investment can cost more than $1,500, depending on market prices. As a remedy, there are Axie Infinity scholarships programs where Axie owners, who are called managers, loan their Axies to scholars who actually play the game. 

Axie Infinity plans to launch a free-to-play version that will allow players to familiarize themselves with the game by removing what may be too high an entry barrier for some. 

Alien Worlds: Mine the Land to Receive Trillium (TLM)

With more than a million monthly users, Alien Worlds is the number one game on the Wax blockchain. It’s a social metaverse that consists of seven planets, and it uses an in-game currency called Trillium (TLM).

Players can enjoy play-to-earn opportunities while exploring these planets. The gameplay revolves around mining TLM. There are several types of NFTs in Alien Worlds. Owners of Land NFTs can mine the land themselves or receive commissions by letting others mine their Land. A player starts with selecting a Land in one of the seven planets.

To mine the Land, you need Tool NFTs. After mining, you receive a share from the planet’s TLM pool. Another type of in-game NFT is Mission NFTs, which players get by going on missions. These NFTS have utilities in the games created by the members of the community. 

The TLM token comes with governance rights; holders can cast a vote in elections for council candidates and submit proposals on how to distribute the incentives.

The Sandbox Game: Create Your Own NFT Game Assets and Experiences

Sandbox is a voxel-based project, similar to Minecraft. A voxel is a 3D pixel. Users can design and launch their own NFT assets and game experiences in the Sandbox metaverse using the intuitive tools provided by Sandbox which are Voxedit and Game Maker.

Voxedit is a voxel art generation program. It’s even possible to create Minecraft assets using it. Asset creators don’t have to use Voxedit for Sandbox assets, other voxel art programs also work. But they need to export assets created in other programs to Voxedit to turn them into NFTs. It’ll be possible to upload these NFT assets to the Marketplace.  Learning VoxEdit 9: Importing and Exporting Different Formats

Game Maker is the platform Sandbox uses to launch and play the game experiences. Players integrate the assets they created in Voxedit into Game Maker. These experiences can be built on LANDs owned by players, which are digital pieces of real estate in the Sandbox metaverse.  

Platform’s native currency is SAND, which functions as both a utility and a governance token.  It’s possible to stake SAND tokens on LANDs. SAND is also used to buy and sell NFT assets from the Sandbox marketplace.

Mines of Dalarnia: Discover the Rarest Resources

Mines of Dalarnia is a free-to-play action-adventure game. The Dalarnia universe consists of minerals, rare relics, and artifacts. A player’s success depends on their ability to mine these in-game items.

The gameplay resembles the concepts of NFT scarcity and bitcoin mining. The stronger your skills, the rarer resources you can acquire. Dig deeper to collect rarer minerals, use minerals to upgrade the equipment of your character. To do that, travel through four different mine types with increasing difficulty.

By participating in Mines of Dalarnia competitions, it’s possible to earn in-game currency DAR that you can stake for rewards or use to buy and rent in-game assets from the game’s marketplace. The Mines of Dalarnia team also plans to build governance functionality into the DAR token, so players can vote on the game’s developmental direction.  

Blockchain Monster Hunt: Catch the Monster in the Block

Blockchain Monster Hunt is a multichain hunting game where valuable NFT monsters are born in blocks. You can either catch the monsters in the game or buy them from the Marketplace. To earn Blockchain Monster Coin (BCMC) tokens, you need to battle the monsters you possess

Players must command catch and battle mechanisms to succeed. There are some rules to take into consideration while playing. For example, you’re allowed to catch only one monster from the same block, but you get multiple tries to do so. 

Blockchain Monster Hunt’s play-to-earn model is based mainly on the BCMC token’s utility; BCMC carries in-game benefits like increasing the hunt’s success rate and helping prevent monsters from dying, and token holder benefits like voting rights on proposals for the game development, staking, and farming.

Cryptoblades: Defeat your Enemies and Earn SKILL

Cryptoblades is an NFT role-playing game launched on Binance Smart Chain.

By leveraging in-game currency SKILL and using characters and weapons, players enter into combat. Character and weapon NFTS can be traded in the game’s native marketplace. Players need SKILL tokens to recruit their first character.

SKILL can be swapped on ApeSwap when pairing with BNB.

Players earn character experience and SKILL tokens when defeating enemies in combat. Experience allows the related character to level up. Weapons can be forged to increase their combat power. Skill reward depends on the power of the enemy defeated. 

Outside of in-game token benefits, SKILL can also be staked. 

Town Star: Build Your Farm 

Town Star is a farming-style-strategy game where players with limited resources and space produce goods to sell to nearby cities so as to make money and grow their farms. Whoever develops the necessary skills to manage the limited resources can play more strategically, and as a result, rise on the leaderboard.

Town Star’s buildings and characters are NFTs with several utilities. They give the players unique benefits while they’re growing their farms. For example, some character NFTs help finish certain tasks very fast and some resource NFTs provide crop supply continuously.

These NFTs are also the way to reach more play-to-earn rewards throughout the game. Players receive TOWN tokens, which are tradable on third-party exchanges, such as Okex and Bitrue, with a 24-hour trading volume of $1.8M.

Final Thoughts: Ready Player One

Town Star and other NFT gaming ecosystems enable earning rewards while having a good time. Perhaps their greatest benefit for the crypto ecosystem is that they help increase cryptocurrency and blockchain literacy, gamifying an experience that facilitates widespread blockchain adoption.

Contrary to conventional online games, players own their assets, and the blockchain allows for asset authenticity to be proven. Besides utility, in-game currencies offer governance rights, which enables community members to vote on proposals and decide on the game’s future. 

By combining the benefits of tokenization and a fun gaming environment, these early GameFi iterations may serve as landmark innovations for games to come.