RippleX today invites the developer community to provide feedback on their suggestion to improve NFT support in the XRP ledger.
The widespread use of digital tokens to represent ownership of assets on a blockchain – or tokenization – is changing the way people buy, sell, track, and manage assets of all kinds. As everything from art and real estate to intellectual property, stocks, supply chain goods and more is tokenized, this innovation opens up a wide range of new efficiencies and new possibilities.
In fact, the World Economic Forum (WEF) estimates that 10% of global GDP will be tokenized by 2027. That’s only six short years left. The breadth of this transformation – which will be an important pillar of the future Internet of Value – means that more people will have more access to more equitable ways to use different kinds of values to their advantage.
However, in order to achieve a comprehensive effect with so many asset types, the interaction of different blockchains and existing internet and financial infrastructures is necessary. This presents a unique opportunity for the XRP Ledger (XRPL): a blockchain built with the design and performance features necessary to handle any type of currency or asset with high efficiency and at low cost.
NFTs and today’s friction points with the introduction
Non-fungible tokens (NFTs) are an important subset of tokens with the potential to greatly accelerate the burgeoning creator economy while opening up access to broader participation in today’s modern financial system. To achieve this wide adoption and vision, however, developers need new and better platforms on which to build NFTs.
The first phase of NFT’s growth and development requires providing the right infrastructure to deliver an accessible, integrated, affordable, and open user experience for developers, developers, marketplaces, and consumers alike. For some, the difficulty of navigating the patchwork of new technologies is a major obstacle, while for others the cost of an NFT transaction due to high gas fees is the major obstacle to entry, while for others the high environmental cost is still the major obstacle to creating NFTs on some blockchains. While there is already tremendous interest in and growth in NFTs, all of these points of friction stand in the way of a fully modernized and generally accessible way of creating, sharing, and monetizing NFTs.
XRP Ledger: The blockchain of choice for NFTs
We believe the XRP ledger is ideally suited to provide a superior user experience for NFTs and tokenization in general. Combined with a robust suite of tools and resources, the innate performance benefits of XRPL and its native digital asset XRP allow developers a seamless experience for NFTs.
Cost effective NFTs
Minting NFTs today causes a considerable amount of transaction work. In fact, gas fees – the markup that covers the computational energy required to process Ethereum-based transactions on NFT platforms – can add hundreds of dollars to the final price of an NFT (fees vary based on user traffic and congestion on a particular network). Fortunately, the XRP ledger was designed as a more cost-effective, scalable blockchain, and its upcoming federated sidechains are aimed at preventing the potential risk of network clogging when NFT transactions are started.
Green by nature
The XRP Ledger also offers another significant advantage over other platforms that are all-in on NFTs: sustainability.
Current methods of minting NFTs are extremely inefficient in terms of the environment due to the carbon footprint of many cryptocurrencies. Because the XRPL uses a novel consensus process to validate transactions, it consumes negligible amounts of energy and is 120,000 times more efficient than proof-of-work networks.
Building on the XRP ledger offers developers a unique opportunity to run more sustainable NFT apps and marketplaces while avoiding a heavy burden on the planet. XRPL’s approach to sustainability also results in cost-effective NFT projects that are more profitable for makers and accessible to mainstream consumers.
Integrated token advantage
To date, more than 5,400 currencies have been issued and traded in the XRP Ledger via its integrated decentralized exchange (DEX). XRPL’s DEX includes built-in autobridging and pathfinding functionality that finds an efficient way to make a payment and possibly uses XRP as a neutral bridge asset. Pathfinding also provides a standard for making payments in a single transaction, even if the sender has a different token than the recipient.
In addition, the custom token functionality of XRPL – Issued Currencies – enables the seamless and secure settlement of tokens of all kinds without a central intermediary. These include “IOUs”, such as fiat currencies or stablecoins, which are available today on the XRPL for buying and trading with XRP on the DEX.
Since 2013, the fully functional DEX of the XRPL has enabled asset owners and recipients to issue, buy or sell any token.
The XRP Ledger developer community is already working hard to suggest features and provide tools and documentation to make XRPL the go-to place for NFTs. For example, XRPL Labs proposed a standard for the use of existing functions for outputting NFTs on the XRP ledger and began work on an embedded xApp in the XRP wallet XUMM for embossing NFTs on the XRPL.
Building on the standard from XRPL Labs, the RippleX team today proposed additional features that would provide improved NFT support on the XRP ledger. Pending implementation and 80% approval for enabling the change, developers could support more NFTs at lower cost, offer to buy or sell NFTs, use the auction functionality, and cut secondary sales to the original issuer’s XRPL.
There is tremendous room for growth and exploration with NFTs and tokenization, and we are excited to see what lies ahead. Together, through a better and more sustainable approach to NFTs, we can create the tipping point for mainstream blockchains adoption.
Developers, we’d love to hear your thoughts on our proposed standard for the XRP ledger! Head over to GitHub to comment and start building today.