Non-fungible tokens (NFTs) have become an emerging trend in the crypto space, and Chainlink has contributed to their adoption.
Chainlink has helped to produce dynamic NFTs that are being used for multiple activities in blockchain today. To further analyze the contributions of Chainlink to the evolution of NFTs, it is important to understand the concept of NFTs.
Concept of Non-Fungible Tokens (NFTs)
NFTs are blockchain-based tokens that represent ownership of a particular asset. With NFTs, tokenized ownership can be claimed on a variety of digital assets, such as unique digital trading cards or digital art. Besides, NFTs vary from fungible tokens due to their uniqueness.
Bitcoin, as a fungible token, can be traded for another BTC. In the case of NFTs, each one is unique and has a representation of digital scarcity. This implies that multiple types of a particular NFT can hardly be found. These unique items can be stored as data on the blockchain. These NFTs are listed and traded on the blockchain to make them globally accessible, more liquid, and transparent.
Chainlink’s Contribution to the Evolution of NFTs
NFTs are gradually evolving from static NFTs to dynamic NFTs. Therefore, it implies the use of oracles by smart contracts to interact with systems and data. Through such oracles, NFTs can use these systems and data as a means to promote peer-to-peer trading, burning/minting of NFTs, etc.
Through Chainlink oracles, developers have been able to link their NFTs to web APIs, IoT data, and other data providers. Developers can also leverage on the Chainlink Verifiable Randomness Function (VRF) to achieve verifiable randomness, promote cyber-physical systems, and connect to back-end systems.
These connections can be used in the creation of dynamic NFTs. These dynamic NFTs interact with data and can be integrated with infrastructures that already exist on blockchain. Chainlink uses off-chain data sources to enable dynamic attributes to NFTs. One of these attributes is the creation of randomness using NFTs.
Leveraging Chainlink VRF to Create Random Numbers in NFTs
Chainlink VRF helps to create dynamic NFTs that seek a secure source of randomness. Chainlink VRF “utilizes verifiable random functions to generate randomness that is verifiable on-chain.” Unlike other random number generator (RNG) solutions, Chainlink VRF is both auditable, secure, and also accessible on-chain to all users.
It has a system of operation which goes thus: the NFTs will send requests for randomness. Then, Chainlink will generate randomness and send proofs to the VRF contract. In turn, the VRF contract will verify the randomness before the NFT will receive verified randomness.
When smart contracts submit an NFT to Chainlink, Chainlink nodes will use that seed to generate a random number. After that, the result will be published on-chain. Alongside the result will be an associated cryptographic proof which will verify the accuracy of the computation.
This computation will undergo verification by using the oracle’s public key. Not only that, the NFTs will also be employed in the verification process. With Chainlink VRF, accessing random numbers in NFTs has become very easy and secure. Some online gaming platforms and conflict resolution processes have leveraged on Chainlink VRF to promote fairness.
Leveraging on NFTs for Rewards
In addition to achieving randomness, Chainlink oracles also leverage on NFTs in reward systems. Therefore, NFTs can now be used to reward customers with digital tokens. Companies can decide to mint special coupons as NFTs for their users instead of giving out paper or digital coupons.
As a means of reward, these minted NFTs can be linked to the participation of the customer. This is where Chainlink comes in. Chainlink uses IoT data in minting these coupons, according to verifiable attendance. Also, NFTs can be used to represent unique digital assets that interested hobbyists can collect, such as rare cards, digital media, etc.
Chainlink also helps in utilizing NFTs for verification of authenticity. Once NFTs are interfaced with existing systems, they can be used to track and verify unique assets. This shows how well dynamic NFTs can be used in different use cases.
Overall, Chainlink has been very instrumental to the evolution of NFTs to become dynamic NFTs, capable in carrying various purposes. To this effect, Chainlink always calls on developers to come build dynamic NFTs on its platform.
Before now, Fuse Network entered into a strategic partnership with Chainlink to guarantee secure, reliable. and efficient minting and auditing of its collateralized stablecoin, FuseDollar (fUSD).
LINK Price
As of the time of publication, Chainlink (LINK) price was $28.20 with a 24-hour trading volume of $869,214,274. LINK price also dropped by 0.1% over the last 24 hours. Besides, it has a circulating supply of 416 million LINK coins and a max supply of 1 billion.
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