Session:

NFTs: Fundamentals and

Applications
Session: NFTs: Fundamentals and Applications
Session Objectives
• Understand the foundational standards of NFTs and Ethereum protocols.
• Analyze the core components and anatomy of NFTs.
• Explore the major blockchains that support NFTs and their unique features.
• Identify key NFT marketplaces and their roles in the NFT ecosystem.
• Examine the impact of NFTs in the art world, focusing on avatars and PFP (profile picture)
projects.
• Investigate NFT applications across various domains beyond art.

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Session: NFTs: Fundamentals and Applications
Agenda
1. NFTs and Ethereum Standards
2. The Anatomy of NFTs
3. NFTs In Art: Avatars & PFPs
4. NFTs In Other Domains
5. Conclusions
6. Further Reading
7. Appendix: NFT Creation Mechanics

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1. NFTs and Ethereum Standards

Session: NFTs: Fundamentals and Applications
Revision: Ethereum is a Multitoken Network
Like Bitcoin, Ethereum features its own native currency/token, called Ether
• Ether is the second largest cryptocurrency by market capitalization today

However, Ethereum can also support the creation of additional tokens

• Some of these additional tokens are fungible, while others are not (non-fungible tokens – NFTs)
• Fungible tokens (of the same type) are interchangeable. In other words, a unit of a fungible token is of
equal value to any other token of the same type
• NFTs are not generally interchangeable at the same value. In other words, one Cryptopunk may have
significantly different market value from other tokens in the same collection (i.e., other Cryptopunks)

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Ethereum tokens are governed by ERC standards
● ERC-20: Fungible Token Standard (2015)
• The most widely used standard for fungible tokens on the Ethereum blockchain

● ERC-721: Non-Fungible Token Standard (2018)

• The most widely used standard for NFTs on the Ethereum blockchain

● ERC-1155: Multi Token Standard (2018)

• A standard interface for smart contracts that manage multiple token types. A single smart contract
may include any combination of fungible tokens, non-fungible tokens or other configurations (e.g.,
semi-fungible tokens)

● ERC-6551: Token Bound Accounts (2023)

• A new standard that allows NFTs to have their own wallets.

Note: ERC stands for “Ethereum Request for Comment”. You can find a list of all ERC standards at https://eips.ethereum.org/erc.

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Session: NFTs: Fundamentals and Applications
ERC-721 is Ethereum’s most popular NFT standard
● ERC-721 allows for the implementation of a standard API* for NFTs within Ethereum smart
contracts

● The standard provides basic functionality to track and transfer NFTs

● ERC-721 tokens are created by writing code in a smart contract programming language, like
Solidity

● In practice, most NFT collections today will be created through service providers and will
require little or even no programming to create the token

*Note: APIs (Application Programming Interfaces) define how computer applications communicate with each other, often using requests and responses

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ERC-1155 is Ethereum’s multi-token standard
● ERC-1155 implements a standard interface for contracts that manage multiple token types
• ERC-20 requires deployment of separate contracts per token type
• ERC-721 groups a collection of non-fungible tokens in a single contract, with settings for the entire collection
• ERC-1155 allows for each token ID within a collection to represent a new configurable token type, which may
have its own metadata, supply and other attributes

● The innovation of ERC-1155 is that multiple tokens can co-exist in the same smart contract
• New functionalities are possible, such as transferring multiple token types at once, thus saving on transaction
costs
• Such functionality is particularly helpful, for example, in gaming applications, which may combine fungible and
non-fungible items (e.g., currency and swords)

● Despite its flexibility, ERC-1155 is currently less popular than ERC-721

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ERC-6551
● ERC-6551 will provide the ability to NFTs to have their own wallet
● This will allow NFTs to have trading history, a collection and an identity
● It can be thought of as the inverse of soulbound tokens (STBs), where the NFT is permanently tied to
an account/wallet

● In practice ERC-6551 gives every ERC-721 token a smart contract account

● Possible applications based on ERC-6551:

• Combination with Artificial Intelligence (AI): An automated investment portfolio composed of multiple
fungible assets
• Facilitating airdrops directly to NFTs: Gaming characters will be able to own their own items

Sources: https://eips.ethereum.org/EIPS/eip-6551, https://cointelegraph.com/explained/the-erc-6551-token-standard-explained

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Different standards for different applications
ERC-721 ERC-1155 ERC-6551

Scope Tokenize unique individual Combine multiple token types Enable wallet/accounts for NFTs
assets
Fungibility NFT only FT & NFT NFT with smart contract capabilities
Application Collectibles, art, digital assets, Gaming, other applications involving Composability, identity, provenance,
focus tokenized real-world assets multiple assets dependency
Advantages Standardizes how unique Saves on computational burden by Enhances the functionality and
assets are securely stored reducing the approval steps needed value of NFTs. Compatible with
and managed on the to transfer multiple tokens in a existing ERC-721 tokens
blockchain single transaction
Disadvantages Tokens are indivisible. NFTs The standard is not backward Requires a permissionless registry
cannot be combined with compatible, so it cannot handle to create and manage token bound
fungible tokens. ERC-20 or ERC-721 accounts
implementations
Gas Slightly lower than ERC-20 Lower for transactions involving Moderate. Deploying a proxy
consumption multiple token types in a batch contract requires a small fee
transfer
Source: 1. Adapted from https://micobo.medium.com/security-tokens-an-erc-standards-comparison-919e7c379f37, 2. https://coinmarketcap.com/alexandria/article/what-is-erc-6551

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2. The Anatomy of NFTs

Session: NFTs: Fundamentals and Applications
So, what is an NFT?

Non-Fungible Tokens (NFTs)

are unique digital assets that are stored in a
blockchain

or

Standards-based, interoperable technology for

direct internet-native ownership of intangible assets

https://www.forbes.com/advisor/in/investing/cryptocurrency/what-is-an-nft-how-do-nfts-work/, “Non-fungible token (NFT): Overview, evaluation, opportunities and challenges”

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The adoption pathway of NFTs

Natively Digital / Intangible Assets Abstracted Physical / Tangible Assets

Off-Chain
Collectibles Art Gaming Metaverse Brands Culture IP Services Assets Governance

2020 2030

● >$75 trillion existing stock of intangibles ● Physical world assets & services
● The only “public commons” open database for the metaverse ● Needs regulatory bridges so will take some time

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A mental model
Tangible Intangible

Money, Financial
Fungible Commodities Fungible Tokens
Instruments
(this market is huge)

Culture/Society,
Non-Fungible Real Estate, Services, Digital Goods, NFTs
(this market is Products, Humans Intellectual Property
larger)

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Breaking down the components
In most cases, due to the expense of storing data on a Where is the metadata?
blockchain, the image of the NFT is not stored on the (description, attributes, image, etc.)
blockchain. Instead, just a “pointer” to the image is stored on
the blockchain.
Decentralized
Storage

Token URI* (URL) OR

Centralized
Server

*Note: URI (Uniform Resource Identifier) uniquely identifies a resource by using data like name, location, etc. URL (Uniform Resource Locator) identifies the web address of a unique resource

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IPFS and Arweave are examples of decentralized storage networks
● IPFS (InterPlanetary File System)
• Distributed storage protocol that allows the storage and distribution of uniquely identifiable files as part
of a global peer-to-peer network
• Every computer in the world can choose to “pin” (host) and distribute any files they choose via
downloading the IPFS software
● Arweave
• A distributed storage protocol with a different design philosophy
• The hosts are paid upfront for permanent storage under the theory that the cost of storage will drop fast
enough over time to allow the upfront payment to cover the storage costs forever

In the NFT field, both IPFS and Arweave are considered adequate
solutions for decentralized storage vs a centralized server

Sources: 1.IPFS, 2. Arweave

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On-chain storage: Natively on-chain
● On-chain storage refers to the actual saving of the asset on the blockchain itself. Projects that
store all asset files on-chain are called natively on-chain, as all the information associated with
an NFT is stored on the blockchain (metadata and the actual asset)

● Saving the asset on-chain preserves all the first order features of the blockchain:
• Immutable
• Decentralized
• No single-point of failure, etc.

● This is only feasible / cost-effective for artwork that can be described in code
• In other words, this could be a design choice in generative art, but it might be economically/technically
infeasible for photography or videography

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Total NFT Market Cap (2023-24)

NFTi and Adjusted Floor Market Caps (2023-24)

Source:. nftvaluations.com

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3. NFTs In Art: Avatars & PFPs

Session: NFTs: Fundamentals and Applications
Profile Picture Projects (PFP) and Art NFTs Dominate the Market
PFP collections are still
dominating the market cap
followed by Generative Art and
Art

● PFPs ~ 68.57% dominance (Ξ2.4M)

● Generative Art ~ 12.43% dominance
(Ξ435.1K)
● Art ~ 7.51% (Ξ263.0K)
● Remaining categories: ~ 11.48%
(Ξ401.9K)

Source: nftvaluations.com

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A short history of NFTs
● Colored Coins (c. 2012) – An attempt to represent real world assets on the Bitcoin
blockchain, using bitcoin denominations (satoshis)
• They exemplified a leap in the use of the Bitcoin blockchain but weren’t efficient since the
network was not designed with non-native tokens (NFTs or other) in mind

Founding Nakamoto
● Artworld Ethereum (July 2014) by Rhea Myers – Oldest Ethereum art market, created Cryptokitty 28 Rare Pepe
(November 2017) (Sept 2016)
one year before the launch of the Ethereum mainnet

● Pepereum Project (March 2017) – NFT project focused on Pepe memes similar Rare
Pepes collectibles
• Created a decentralized meme marketplace and trading card game

● CryptoPunks (June 23, 2017) – Developed by John Watkinson and Matt Hall (Larva CryptoPunk
Labs). → 10,000 unique CryptoPunk avatars on the Ethereum blockchain 6529
(June 2017)

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Non-NFT and NFT Avatars
● Non-NFT avatars are digital representations
used in various online settings (social media, NON NFT
gaming, etc.), allowing for the customization of
ones' digital persona.
• They are not stored in a blockchain
• They are not owned by their users

● NFT avatars have primarily gained recognition

as digital Profile Pictures (PFPs). NFT
• The underlying tokens are owned by users.
• They became popular though NFT collections Dedicated PFP Art/Collectibles
such us CryptoPunks and the Bored Ape Yacht Collections /Photography
Club (BAYC).

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The Multifaceted Nature of Profile Pictures (PFPs)
● Variability in PFP Usage ● PFP as a Symbolic Identity Marker
• Research indicates individuals employ 3 to 5 • Each PFP acts as a visual emblem, mirroring
distinct PFPs across diverse platforms and the specific facet of online identity it embodies
networks

● Types of Online Identities Reflected in

● Platform Perception & Identity Projection PFPs
• Users' online self-representations are • Community Identity: PFPs resonate with a
influenced by their understanding of a group's collective ethos and values
platform's ethos and its perceived audience • Avocational Identity: PFPs mirror individual
passions, hobbies, and interests
• Professional Identity: On career-oriented
● Audience-Driven Identity Curation platforms, PFPs often portray individuals in a
• Users strategically curate their online manner that emphasizes professionalism and
depictions based on their perceptions of the reliability
predominant audience on each platform

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PFPs are about identity

Identity
Personal Community Branding
Identity/(ies) Belonging / Recall

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Avatar/PFP Effects are Likely to be Bilateral
● Research conducted at the University of Nicosia revealed
intriguing findings into the impact of virtual avatars on user's
physical attributes
• It was discovered that individuals whose avatars embodied
"stronger" characteristics demonstrated measurable
improvements in physical strength during various tests
• This suggests that the perception and representation of one's
avatar can influence their real-world physical capabilities

● Moreover, researchers found that visual elements alone proved

to be more effective in predicting personality traits in
comparison to text features or a combination of both
• A single profile picture emerged as a reliable indicator to predict a
user's personality, highlighting the significant role of visual
representation in shaping online impressions people form of others
in online environments

Sources: Aliens versus humans: Do avatars make a difference in how we play the game?, Automatic personality prediction using deep learning based on social media profile pictures and posts.

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CryptoPunks
● Launch Details
• Date: June 2017
• Platform: Ethereum

● Unique Features
• Introduced a collection of 10,000 distinct 24x24 pixel art characters
• Introduced the revolutionary concept of "traits" that add layers of rarity
and uniqueness

● Impact
• Set the standard for digital ownership
• Pioneered the concept of rarity in NFTs
• Inspired a whole category of generative art projects
• Punks were inspiration for the ERC-721standard

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CryptoPunks emerged as generative collectables
● CryptoPunks represent a collection of 10,000 NFT randomly generated collectible characters
based on distinct traits. Their ownership is securely stored on the Ethereum Blockchain.

● They were originally offered for free to claim in June 2017. Today, they have evolved into highly
sought-after digital assets with their prices ranging from thousands of US dollars to millions for the
rarest ones.

● Larva Labs, the creator of CryptoPunks introduced a groundbreaking concept by embedding the
first collection built-in decentralised marketplace, which included royalty free trading.

● Larva Labs maintained 10% of the supply as well as the IP and copyright of the whole collection.

8
9 24 9879
8

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And Evolved to be Much More...
CryptoPunks embody a combination of different
elements

● Digital Art
• They are digital artworks with distinct and creative pixel
art designs, each with its own unique characteristics

Art
Art Collectibles
● Collectibles
• They function as a built-in marketplace and have
become highly sought-after collectibles in the crypto
world

● PFP/Community PFP/ Community

• Many users adopt CryptoPunks as their online avatars,
establishing a sense of identity and belonging within the
community

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Bored Ape Yacht Club
● Launch Details
• Date: April 2021
• Platform: Ethereum

● Unique Features
• Collection of 10,000 NFTs randomly generated collectible characters
based on a set of traits, created by Yuga Labs
• Introduced utility to NFTs
• Partnerships with brands and creators to enhance member value

● Impact
• Pioneered the idea of using NFTs as exclusive "membership cards"
granting real-world benefits
• Elevated the NFT space by adding real-world applicability

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Session: NFTs: Fundamentals and Applications
Introducing Utility to NFTs
Yuga Labs heavily emphasized on providing
utility
● Membership includes entry to a virtual meeting
space, fostering networking and community
engagement
● Token ownership grants certain commercial
rights, enabling monetization opportunities
● Access to in-person gatherings, such as VIP
parties
● Periodic airdrops offer additional value and
rewards, enhancing long-term token holder
benefits
● Inclusion in Otherside, a digital universe, offers
interactive and immersive user engagement

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Yuga offered additional benefits to token-holders

● Physical Events
• Exclusive access to real-world events
(e.g., Ape Fest), enhancing community
engagement and adding tangible value to
digital ownership.

● Airdrops
• Periodic distribution of additional digital
assets to NFT holders (e.g., Ape Coin),
incentivizing long-term engagement and
increasing token value.

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4. NFTs In Other Domains

Session: NFTs: Fundamentals and Applications

Virtual Real estate

● Digital parcels of land, often in metaverse platforms
like Decentraland, Somnium Space, CryptoVoxels,
The Sandbox
• Community Building: The rise of virtual
neighbourhoods and communities with shared
interests
• Business Ventures: Virtual malls, art galleries,
event spaces, and more
• Innovative Monetization: From virtual tourism to Decentraland map. Adapted from
Decentraland.org
branded spaces

● Digital Ownership
• Blockchain-backed proof of ownership ensures
authenticity and security
• Eliminates disputes over land rights in virtual spaces

Virtual malls, virtual tourisms, branded spaces,

virtual communities with common interests

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Economic implications
● Investment Opportunities – Speculation
• Potential for land price appreciation vs. infinity of virtual land
• Opportunities for rental income from leasing virtual spaces
• Advertising revenue from prime virtual locations

6529 Museum District - A virtual gallery in the Metaverse,

● Marketplace Dynamics allows NFT owners and artists to display their artwork in a
• Supply and demand factors influencing virtual land prices 3D world
• Importance of location within the virtual world (e.g., proximity
to popular landmarks) - still important in a world where
physical constraints no longer exist?
• Influence of platform popularity and user base on land value

● Challenges and Risks

• Platform sustainability and long-term viability
• Dependence on technology and platform updates
• Market saturation as more virtual spaces emerge
Supply and demand factors
influencing virtual land prices

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Tokenization of real estate
● Concept
• Tokenized real estate represents real estate ownership or rights from it (e.g. cash flows) through blockchain tokens
• Aims to enhance liquidity, simplify processes, and facilitate digital ownership

● Types of Tokens
• NFTs: Useful for representing entire properties or groups of properties
• Fungible tokens: Ideal for fractionalization of single properties or property bundles

● Benefits
• Fractional ownership
• Reduced time and cost in property transactions
• Enhanced secondary trading opportunities

● Implementation
• Requires a strong (enforceable!) link between the digital token and the actual physical property
• Oracles (platforms like Chainlink) offer tools to bridge the gap between blockchains and real-world assets

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Blockchain: A layer for storing & transferring value in gaming

Gaming

Blockchain

Asset Asset In-game Economy

Ownership Interoperability

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NFTs allow for true digital ownership of game assets
● NFT games combine conventional gaming designs with unconventional game mechanisms to let users have
more control over in-game assets.
• Players can truly own their characters or avatars as NFTs.
• Assets bought or collected while playing the game can also be NFTs.

● Players can then swap or trade their NFTs with other players without intermediaries or censorship by the
game owner.

● Avatars/assets can also exist outside of the game as independent entities, which may have other uses or
internal value.

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A new gaming genre? Play-to-Earn (P2E)
● P2E games allow players to earn financial value (usually in the form of digital tokens) by playing
a blockchain-based game.

● They typically fall into two broad categories

• Free-to-play: players can play the game for free; typically, they won’t be able to earn through playing
the game, at least not until they have progressed or contributed enough
• Pay-to-play: players will need to be equipped with specific NFTs prior to playing the game for earnings.
The properties/rarity of these NFTs will typically determine how much the players can earn, combined
or not with the players’ skills in the game

● Players will typically be able to create or breed new characters in the game (which can be
used in-game or sold in a marketplace), purchase digital items on native or third-party
marketplaces, and/or unlock/earn digital assets in-game.

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Early P2E game example: Axie Infinity
● Inspired by Pokémon, it became the first
popular P2E game in 2021.
● Player options
• Earn cryptocurrency tokens (AXS and SLP) Axie Infinity Games
by playing which can be traded on various World
exchanges for real-world value
• Can acquire Axies which are unique,
fantasy creatures represented as NFTs,
used in gameplay battles
• Can buy digital plots (Lands), represented
as NFTs

● Despite the market challenges, Axie Infinity

continues to evolve its gaming platform. Axie Homeland – Tokenized
The game launched its sixth season of Epic Plots as NFTs
Era, encouraging players to compete for a
substantial prize pool of 22,500 AXS.

Source: P2E report

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Fully onchain gaming
● Onchain Gaming ● Notable Technologies utilized by Starknet
• The majority of game components are on-chain • Dojo: A provable game engine designed to scale
• This enables player-driven modifications (modding) & gaming beyond the typical TPS (Transactions Per
secondary market opportunities Second) restrictions
• Smart Contract wallets like Argent & Braavos
replace traditional EOA Wallets. Session Keys
● Starknet's Role transform on-chain transactions since players can
• Advocate for games built fully on-chain, harnessing "log in" with just one transaction
blockchain's transparency and decentralization
• Pioneering a paradigm shift away from supplementary
blockchain features to core, integral on-chain gaming
components
• Starknet is partnering with innovative game-building
teams such as Topology, pioneers of strategy-based
games (e.g., Shoshin) and Cartridge, who introduced
economic-based strategy games (e.g., Roll Your Starknet, an Ethereum L2 network
Own). innovating in on-chain gaming

Source: https://www.bankless.com/building-an-onchain-gaming-oasis

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Session: NFTs: Fundamentals and Applications
Challenges in gaming NFTs
● We are still early in the NFT gaming phenomenon, including P2E games.

● It has proven to be very challenging to create a self-sustaining in-game economy

• Dual-layer (fungible and non-fungible), multi-token (governance, utility, NFTs) structures have been used, but
a proven token economics mechanism that is successful in the long-run is yet to emerge

● Some analysts claim that monetary rewards may prove to be bad for player retention, as they can
weaken intrinsic motivation
• Still, most games today seem to emphasize tokenomics more than game design

● There are also technical challenges in creating 100% decentralized games, stemming from the
characteristics of blockchains: lack of speed, ability to front-run publicly visible transactions, etc.
• Hence, most games are still only partially decentralized.

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Session: NFTs: Fundamentals and Applications
Transforming industries and consumer experiences
NFTs serve as the bridge between digital innovation and artistic expression creating
the potential to redefine consumer experiences

● Fashion Industry
• NFTs offer unique digital fashion pieces for exclusive ownership
• Exclusive digital fashion collections are launched via NFTs with limited-edition value
• Virtual fashion shows offer immersive global audience engagement
• Metaverse stores serve as hubs for exploring and buying digital fashion

● Film & Television

• NFTs safeguard creators' unique works from unauthorized copies
• Creators directly profit, bypassing traditional systems for more revenue
• Film and TV distribution is streamlined, benefiting independent creators

● Music Industry
NFTs can transform
• NFTs ensure artists, especially independents, get direct and fair compensation industries and the
• Artists bond directly with fans via exclusive tokenized content, enhancing relationships consumer experience
• Musicians gain creative and financial autonomy, lessening dependence on
intermediaries

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Session: NFTs: Fundamentals and Applications
The rise of digital wearables
• Digital Wearables
• Digital wearables offer exclusive, innovative designs for
virtual expression, with brands creating unique items for avatars
and metaverse users
• Users can showcase their unique style through NFT wearables,
enhancing personal expression in digital spaces
• Digital wearables allow fashion brands to engage with their
audience in innovative way RTFKT x Nike Dunk Genesis ANGL
CRYPTOKICKS sold in OpenSea

• Digital Twins of Physical Products

• “Phygital” NFTs are virtual versions of physical items, enhancing
the shopping experience by offering both digital and tangible
products
Tiffany and Co
• NFTs validate the authenticity of their corresponding physical Cryptopunks pendant
items, acting as proof of ownership and authenticity sold as part of the
• Exclusive clothing and accessories are designed for virtual NFTiff collection
avatars. E.g., Nike and RTFKT have launched collections like the
Nike Dunk Genesis Crypto Kicks, offering unique digital sneakers

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Session: NFTs: Fundamentals and Applications
Examples of luxury brands in the NFT space

"circle interference study (sunrise)"

Hublot X Takashi Murakami NFT NFT by Zach Lieberman
Prada Timecapsule NFT Collection
In Gucci X Christie's Digital Art
Each NFT is connected to an Auction
exclusive physical product

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Session: NFTs: Fundamentals and Applications
From film scenes to musical high notes
● Film & TV
• NFTs unique avenues for content creators to monetize their work
• Provides fans with opportunities to engage and own content
• Fans attain a new level of interaction and ownership with their
favourite films or series

● Music & Concerts

• Entities like GUTS Tickets and YellowHeart pioneered in
implementing NFT ticketing "Falling Angel" Movie scene as an
• NFT tickets provide blockchain-based event access with unique NFT by Erdem Cetinkaya
benefits for holders
• Artists tokenize songs or albums
• Artists create and market unique NFTs on platforms respecting
copyright laws
• Tokens are sold to fans, providing ownership and access to exclusive
content
• Music NFTs offer artists direct revenue and closer fan connections NFT Concert Ticket for "Godmother"
sold in NFT Concerts

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Session: NFTs: Fundamentals and Applications
Sectors poised for NFT disruption
In the dynamic digital landscape, NFTs are having a transformative impact, revolutionizing different domains.

• Intellectual Property Protection • Supply Chain Management

• NFTs offer enhanced protection for intellectual properties • The integration of NFTs into supply chains ensures product
by establishing proof of ownership authenticity and traceability from manufacture to delivery
• They provide a transparent and unchangeable ledger of • This application is particularly impactful in the luxury goods,
ownership history, helping in efficiently tracing back to the
pharmaceutical, and food industries where verification of
original creator, which is crucial in resolving disputes and
product origin and handling is crucial
verifying authenticity

• Decentralized Finance (DeFi) • Insurance

• NFTs are increasingly integrated into the DeFi space, • NFTs enable the creation of unique tokenized insurance
offering novel financial products and services policies, offering customizable coverage for various assets
• They can act as collateral for loans or represent ownership • Users can instantaneously obtain insurance policies by
in fractionalized real assets, creating new investment and specifying coverage amount and duration, simplifying the
trading opportunities within the ecosystem
traditional process
• Insurance policies as NFTs can be easily transferred,
bought, or sold, providing flexibility to policyholders

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Session: NFTs: Fundamentals and Applications
Revolutionizing event ticketing with NFTs
● Tokenized Tickets
• Tickets for games and events can be tokenized and sold as NFTs. Smart contracts embedded in these tokens can facilitate
secure and straightforward transfers between buyers and sellers, ensuring authenticity and access
• With tokenized tickets, secondary market transactions are streamlined and secure, with automatic royalty payouts to the
original issuers on each resale

● Exclusive Fan Experiences

• Token holders might access unique experiences like meeting players, accessing VIP areas, or receiving signed merchandise,
fostering deeper engagement between fans and athletes
• Fans may unlock special rewards and experiences by holding or trading specific tokens, enhancing the gamification aspect of
fan interactions and encouraging active participation in the community

● Membership & Loyalty Programs

• With the rising popularity of NFTs, early collectors of these iconic moments have seen significant appreciation in the value of
their asset
• The value of these moments fluctuates based on player performance, rarity of the moment, and market demand, providing
dynamic investment opportunities for collectors

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Session: NFTs: Fundamentals and Applications
SI Tickets innovating with strategic partners
● World’s First Complete NFT Ticket Service • Rare sports Illustrated covers as NFTs
• Box Office is the result of a collaboration between • SI also partnered NFT platform One Of and Authentic
Sports Illustrated (SI) Tickets and Ethereum software Brands Group facilitating the release of anticipated
firm ConsenSys, offering a novel NFT ticket service NFT drops featuring SI covers
• Offers a full suite of NFT ticket services for event • The collection features digital versions of iconic SI
owners, organizers, and promoters, serving as a magazine covers, highlighting career-defining
one-stop solution for NFT-based event ticketing moments of superstar athletes
• Box Office’s “Super Ticket” allows for the integration of
highlights, collectibles, and special offers into tickets,
enhancing the value and experience for ticket holders
• The technology transforms used barcodes into
content, maintaining engagement with guests long
after the event, fostering sustained customer relations
and loyalty

"The Unstoppable Emmitt Smith"

Box Office by SI Tickets and ConsenSys SI Sport cover as an NFT

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Session: NFTs: Fundamentals and Applications

5. Conclusions
Session: NFTs: Fundamentals and Applications
Conclusions
• NFTs represent unique digital assets on blockchains, enabling ownership of both digital and,
with the right technology, physical assets.
• Ethereum serves as a foundational platform for NFTs, supporting standards like ERC-721,
with other blockchains such as Binance Smart Chain and Solana also contributing.
• PFPs serve as virtual identities within online communities, where their impact is shaped by
quality, innovation, and community engagement.
• NFTs are expanding beyond art, with applications in tokenized land titles, in-game assets,
educational content, digital fashion, and entertainment.
• The future success of NFTs hinges on originality, utility, and seamless integration into diverse
industries.
• NFTs are paving the way for tokenizing real-world assets, which could revolutionize ownership
and provenance in multiple industries, from real estate to luxury goods.

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Session: NFTs: Fundamentals and Applications

6. Further reading
Session: NFTs: Fundamentals and Applications
Further Reading
How Non-Fungible Tokens Work
https://www.investopedia.com/non-fungible-tokens-nft-5115211

What are NFT profile pictures and why do people use them?
https://cointelegraph.com/learn/what-are-nft-profile-pictures

What Is Tokenized Real Estate?

https://chain.link/education-hub/tokenized-real-estate

PFP NFTs: A Beginner’s Guide

https://builtin.com/blockchain/nft-pfp

NFT PFPs: The Rise of NFT Profile Pictures on Social Media

https://learn.bybit.com/nft/nft-pfps-profile-pictures/

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Session: NFTs: Fundamentals and Applications
Further Reading
Non-Fungible Tokens: Use Cases of NFTS and Future Research Agenda
https://virtusinterpress.org/IMG/pdf/rgcv12i3p1.pdf

2023 NFT Market Analysis: An Insider Look

https://coinmarketcap.com/academy/article/2023-nft-market-analysis:-an-insider-look

Application of non-fungible tokens (NFTs) and the intersection with fashion luxury industry
https://www.politesi.polimi.it/bitstream/10589/182823/1/2021_12_Umer_Kishan.pdf

Educational applications of non-fungible tokens (NFT)

https://www.mdpi.com/2071-1050/15/1/7/pdf

Demystifying NFTs: Understanding the true meaning of Non-Fungible tokens

https://guardian.ng/news/demystifying-nfts-understanding-the-true-meaning-of-non-fungible-tokens/

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Session: NFTs: Fundamentals and Applications

7. Appendix: NFT Creation Mechanics

Session: NFTs: Fundamentals and Applications
The process of creating a new NFT

1. Idea 2. Digital 3. Tokenization

Conception Creation

5. Smart Contract 4. Metadata and

Configuration Attributes

6. Listing on 7. Sale
a Marketplace and Transfer

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Session: NFTs: Fundamentals and Applications
Step 1 - Idea Conception
● Identify the Asset
• Determine the kind of digital item you want to
mint, whether it's an art piece, a musical
composition, a video clip, or something else
entirely
CryptoPunks

● Figure out its Value Proposition

• Assess what makes your asset special Lecture Video as NFT from NFTs
✓ Is it a one-of-a-kind piece? and the Metaverse MOOC

✓ Does it belong to a limited edition?

✓ What is its intrinsic or perceived value?

• CryptoPunks offers 10.000 limited-edition,

algorithmically generated avatars that are
stored on the Ethereum blockchain,
NBA moments minted as NFTs Adapted
providing provable ownership and scarcity from nbatopshot.com

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Session: NFTs: Fundamentals and Applications
Step 2 - Digital Creation
● Design the Asset
• Now that you know what you are creating and
why it is valuable, proceed to design or craft
your digital piece that will eventually be minted
as an NFT

● Ensure its Originality and Compliance

• Be sure your creation is unique to avoid
copyright issues. Also, ensure you have the
legal right to mint the asset Design the Asset

Mona Liza
Painting by Leonardo da
Vinci

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Session: NFTs: Fundamentals and Applications
Step 3 - Tokenization
● Choose a Blockchain
• Popular blockchains for minting NFTs include Ethereum,
Binance Smart Chain, and Polygon. Your choice may depend
on various factors such as network fees, popularity, and
supported standards

● Utilize NFT Standards

• Select an NFT standard that fits your needs. ERC-721 is
commonly used for unique assets, while ERC-1155 allows for
both fungible and non-fungible tokens in a single contract

● Mint the NFT

• Finalize the creation process by "minting," or converting your
digital asset into a non-fungible token.
• This action is usually done through a platform interface and
commits your asset and its metadata to the blockchain

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Session: NFTs: Fundamentals and Applications
Step 4 - Metadata and Attributes
● Define the NFT Metadata
• Input key information to identify and describe
your NFT
• This includes the title for easy recognition, a
descriptive summary to capture its essence,
the creator's name for attribution, and various
attributes (like colour, edition number, or genre)
that provide more context

● Embed Special Properties

• Go beyond basic information by adding unique
features or traits
• This could be unlockable content,
limited-edition labels, or even interactive
elements that deepen engagement and
potentially add to the NFT's value

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Session: NFTs: Fundamentals and Applications
Step 5 - Smart Contracts Configuration
● Set up a Smart Contract
• Create a blockchain-based smart contract that
acts as the legal and functional backbone for
your NFT. This contract enforces how the NFT
can be used, sold, or transferred

● Define your Rules

• Within the smart contract, outline specific
provisions for how ownership is handled, the
percentage of royalties that go to the original
creator upon resale, and the conditions under
which the NFT can be transferred or interacted
with

Setup smart contract and define your rules

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Session: NFTs: Fundamentals and Applications
Step 6 - Listing on a Marketplace
● Select a Marketplace: Choose where to list the NFT (e.g.,
Blur, OpenSea, Rarible, etc.,)

● Upload and Set Metadata: Verify the set metadata (title, Choose the marketplace to list your
NFT
description, creator, attributes)
My Super
NFT
● Set Pricing Parameters: Set a specific price for the NFT

● Review and Confirm: Before publishing, double-check all

details to ensure accuracy and completeness

● Publish the NFT: Once satisfied, publish your NFT on the Setup price parameters
for your NFT
marketplace, making it available to potential buyers
Review and publish your NFT
on a marketplace

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Session: NFTs: Fundamentals and Applications
Step 7 - Sale and Transfer
● Monitor Bids
• Regularly check the bidding activity on your
NFT. Keep an eye out for incoming offers
and evaluate them based on your set criteria
for selling the asset
Monitor offers received for your NFT

● Complete the NFT Sale

• Accept a bid or reach the auction deadline,
then transfer NFT ownership to the buyer
• Collect your funds in the chosen Complete sale for your NFT
cryptocurrency

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Questions?
Contact Us:

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