The non-fungible tokens (NFTs) market may have cooled from the frenzied heights seen in March, but the trend of artists, content creators, celebrities, gaming companies and sports franchises jumping on the NFT bandwagon continues unabated.
But NFTs may not be as decentralized and secure as many may believe, and NFTs have been known to disappear. Buying an NFT — a unique digital asset whose authenticity and ownership are tracked on a blockchain — involves computer code that represents a cryptographic signature or token referencing the artwork or other content that is located elsewhere, such as a private server. Reliance on centrally-operated infrastructure for media storage and hosting puts the NFT content at risk of going missing.
To strengthen the security of NFTs, Ethereum layer 2 scaling platform Polygon and Aleph.im, a cross-blockchain decentralized storage and computing network, are joining forces to offer decentralized storage for NFTs on the Polygon network, according to a joint announcement by the two companies today.
The collaboration will allow Polygon and the more than 40 NFT-focused projects in the Polygon ecosystem to use Aleph’s decentralized databases, computation and decentralized identification framework to enable an additional layer of security and permanence for NFTs and decentralized applications (DApps) on Polygon. The integration will enable users to buy, sell and trade NFTs with lower fees on Polygon as well as safeguard their NFT purchases from disappearing — which can happen at any time if the server hosting the underlying content crashes or experiences other problems.
Why NFTs disappear
Some NFT buyers have encountered a 404 error — page or file not found — when trying to access an NFT they had already purchased.
“When you mint an NFT, you point it to a metadata URL just like a website that you would visit. The issue is that if the metadata URL goes down, your NFT doesn’t really have value anymore because you can’t access the content,” said Jonathan Schemoul, founder of Aleph.im, in an interview with Forkast.News. “The metadata points to pictures, media, video, 3D models depending on the content. The idea is that this points to an IPFS URL pinned on the Aleph.im network, so that it can’t go down no matter what.”
The risks and vulnerabilities can increase when NFT marketplaces opt for centralized data hosting, such as AWS or Google, as that is faster to deploy, Schemoul said. “While this is a cheap and efficient option, it often creates central points of failures, or vulnerabilities to attacks.”.
For NFTs, the Aleph backup DApp creates a unique snapshot in time of all the data attached to it, backs it up on Protocol Labs’ InterPlanetary File System (IPFS), a peer-to-peer web protocol, and pins it over 50 times on each node of the Aleph decentralized network.
See related article: Filecoin explained: Decentralizing cloud storage for Web 3.0
Aleph is cross-chain compatible and also provides storage services on Ethereum, Solana, Polkadot and Cosmos. The Aleph token is used to pay for storage and computing on multiple chains and can be moved on any chain where you need to pay for the service.
“We love DApps on multiple blockchains and the idea is that ideally any user that has an address on any chain will be able to do an action on any of the blockchains without issues of moving funds,” Schemoul said.
Aside from Aleph, other similar content storage options that aim to address the security and permanance of NFTs include data storage blockchain protocols Arweave and Filecoin.
‘Supercharge’ the NFT ecosystem on Polygon
The growing popularity of decentralized finance and NFTs has led to Ethereum, which hosts the majority of DeFi protocols and stablecoins, becoming congested with transactions and bottlenecked by high gas fees.
Polygon, formerly known as Matic, aims to reduce the cost and time of transactions on Ethereum and improve interoperability, according to the company. Founded in India, the protocol is one of the biggest blockchain success stories to date for that country.
The Polygon ecosystem is now one of the biggest multi-chain systems in the world, encompassing more than 50 Ethereum virtual machine networks, hundreds of enterprise chains and dozens of Layer 2 implementations. Polygon’s usage in April was almost five times higher than the month before, growing from more than 4,000 to 20,000 unique active wallets, according to DappRadar, a DApp data provider. The price of Matic — the native cryptocurrency of the Polygon ecosystem — has skyrocketed over 9,000% in just a few months, from US$0.018 at the start of 2021 and reached an all-time high of US$2.62 on May 18, according to CoinGecko data. Matic is currently the 13th most popular cryptocurrency in the world.
Sandeep Nailwal, Polygon’s co-founder, said in a company statement that the collaboration will “further supercharge the NFT ecosystem on Polygon, allowing NFT-focused Dapps to seamlessly use Aleph.im’s decentralized storage services for their NFT storage needs. Combined with Polygon’s high-speed and low-cost txns, this will be a great service for developers in the NFT space.”
Shreyansh Singh, head of gaming and NFTs at Polygon told Forkast.News in an interview that being Ethereum compatible “definitely helps partners a lot” as it does not require much changes in the architecture to switch to Polygon.
Trends in NFTs
Aside from NFT art, Singh sees gaming as a segment where NFTs can add a lot of value, especially with play-to-earn blockchain gaming and open metaverses.
Aleph.im’s Schemoul also agrees that there is “clearly a trend for NFTs in gaming.” He also sees a trend of NFTs that can evolve and can change with time. “Your NFT can evolve and can become more unique because of the actions that you did with your NFT in the game,” Schemoul said.
Singh believes that “gaming will bring mass adoption from Web 2 to Web 3, it will bridge the gap between these two spaces.” Big brands and celebrities have been instrumental in bringing NFTs mainstream, he said, adding that for example, Jack Dorsey, CEO of Twitter and Square sold his first tweet as an NFT on a platform called Valuables that is built on Polygon.
“I feel 80% to 90% of NFT-related use cases have not been discovered yet,” Singh said. “We’ll see a lot of exciting things in the coming days.”
