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Weekly ARC Mtg: What should be the future of Algorand NFTs & tokens?
Recorded: Oct. 12, 2023 Duration: 0:28:07Space Recording
Full Transcription
So, welcome everyone.
We're just three or five for the moment, so I will wait a bit.
But basically last week we were talking about NFT token and why we use ASA for the moment
and why we can consider smart contract or application in the future.
So, I will just wait for people to tune in, but if anyone of you want to jump into the conversation, just ask and I will give the right to speak.
For those that are not aware, I did a post on the forum, so I will share the link to the convo.
So, just to describe the difference between using ISA and the application, so as a lot of you know, ISA are native on Algorand.
So, they were used to create NFTs and tokens in the first place, but we have also some limitations when using NFTs, when using ISA, sorry.
And by using the same thing, we can overcome those constraints, we can overcome those constraints, either with a full smart contract approach or with a mix between ISA and application.
So, we have, for example, some IRC that have been created, like IRC 18, which allow someone to add logic when selling or buying an NFT.
By that I mean, you can enforce royalties, for example.
You can enforce money, again, from one place to another place.
So, you have a lot of options if you mix an ISA with an application, but from a different point of view, some don't like to see cluback address, freez address.
So, another approach is to put everything inside an application, and here you are free to do whatever you want.
So, you don't have an ISA anymore, but you have just a key pair registry.
We used Box2Right for that, and your address will be mapped to the reference of your NFT.
So, this way, you can add a lot more features, so, if you want to enforce royalties, add some burning mechanism, add mutability on the URL, and if you are speaking about a token, you can change the decimals, you can change the amount of tokens, you can have this kind of evolutive tokens and NFTs.
We have some other options right now, if you use an ISA, you want to change, for example, the URL, you can use the random address with ARK19, and if you update the random address, the frontend on the other side, we understand that you want to change your metadata about your NFT.
So, that's also something to consider, and here you have a mutable NFT, but you still don't have NFT with logic when you want to do a transaction.
So, if you want to add that, you need to link your manager address to an application, and you need to keep the clawback and the free address to have the same power as the full smart content of the application.
So, Naj, I see you have a question, let me just reply to this.
I think we have some place where people sell NFTs from a physical place.
Although I am not really aware of where they are, but I am sure we have already some of them because it's quite easy to mint them.
And from a long time ago, I remember that we had NFT, real NFT gallery using Algon, so we might have also NFT linked to physical goods.
So, if you have any questions, if you have any questions, feel free to ask them in the comment section or just ask and read your own to speak with me.
So, because I would like to have some feedback.
I already have some feedback from Ludo and Love Pickle.
So, I know people are a bit afraid when we are speaking about application because you might encounter some weird behavior if you are not used to it.
And by that, I mean, if someone tries to talk to you, you will need to sign a transaction in order to interact with them.
And you will not see that you will just sign a transaction to an application.
And maybe for some of you, it is not clear what exactly you are doing.
And it's completely fair because I don't think that every one of you are developers and know how to write a contract, etc.
And there are always cases where there is a flaw inside the smart contract and people will abuse it.
And you might encounter some weird behavior.
So, that's one downside of choosing an application.
But it comes with the upside of having more flexibility when creating your token or your NFT.
I have also other complaint from Love Pickle.
So, creating an IFA move or do whatever you want with an IFA is fairly easy on the ground right now.
But I think that with a bit of work on the SDK and AlgoKit side, it would be quite easy to have the same
evenness to use a smart contract application for NFTs or token than using it for IFA.
Another thing is the opt-in feature.
The opt-in feature that prevents people to send you something you don't want.
So, you need to opt in an IFA in order to receive it.
And with an application as if we have the same format as ERC721 on Ethereum, you will not be able to refuse something that people want to send you.
But, for example, it's quite an easy task to just have an allow method inside an application in order to avoid this, I don't know if we say feature, but to add this possibility.
So, for example, you will have an allow function.
You will need to call it in order to allow this smart contract application to send you an NFT or a token.
So, it's some kind of opt-in, but it will be only for application.
It's not opt-in to the application.
It's really calling an allow function or an opt-in function inside the application in order to allow the smart contract owner to send you something.
So, that's something to consider, too.
So, I don't think that we lose a lot by using application instead of IFA.
The only thing that needs to be handled carefully is auditing smart contracts.
Because, and be sure that there is no flaws inside smart contracts that will use this new format.
That's the only downside of using a smart contract application.
So, I see that some people are joining right now.
Maybe because another space just finished.
So, I will just repeat what I said a bit earlier.
So, last week we spoke about NFTs and tokens.
So, for the moment we are using IFA.
And we can, we have also already standards that are aiming towards using application for that.
And so, I did a post that I've shared into the token into the comment section for you to understand actually what is the difference between using IFA and smart application.
And in order to reach the same flexibility, you will need at some point to use an application.
Even if you use an IFA, if you want to add some logic somewhere for transfer, you will need to add an application.
So, that's why maybe it's worth to consider using an application for the whole thing.
When you create your NFT inside an application, you add logic in there and you do everything from your application.
So, once again, if anyone wants to jump into the conversation, feel free to raise your hand and I will gladly give you the mic.
And if not, I will continue to speak about this topic.
And another thing to consider is for the moment, all the space has been built around NFTs and around IFA.
So, we don't have that much support for application, but once again, if people think it's more convenient to use application instead of IFA for specific topics or NFTs or tokens.
I am sure that platform, and marketplace and etc. will follow the trend and will allow you to buy or sell NFTs that have been created through a smart contract.
Again, I don't want to repeat myself for hours, but if anyone of you want to jump into the conversation, feel free to ask for the mic.
And I will let the space run until the end of the hour.
So, 13 minutes, and if I don't have anyone to jump in, I will just cut the space because I cannot repeat myself for 30 minutes.
And that's the thing.
But again, if you want to participate to the conversation, either do a tweet about it or jump into the forum and we can discuss there about what do you think is the best.
What do you think is the best.
I see Michael laughing.
So, if you want to jump into the conversation, Michael, keep free.
And if you are on your computer, I understand you will not be able to speak on stage.
That's also an issue for spaces.
I know it's quite hard for people to speak if you are listening from a computer and you need to use your smartphone to speak into a Twitter space.
I see one of our main influencers on the algorithm.
So, Angelo Fares, if you want to speak to the convo, feel free.
I was just speaking about the difference between using an application and AFA for NFTs and tokens.
So, I did a post on the forum and a lot of people have already commented about it.
Why they like AFA, why they think that the application might be an issue for this kind of topic.
But again, using AFA alone will not allow you to do whatever you want with an NFT or token.
And you will need at some point to link them to an application if you want to have some logic or a more flexible approach.
So, for example, you cannot further update an URL natively.
So, you need to use the ARK19 feature with the reserve address, update it in order to change the URL and the metadata.
But something you can't change is the number of tokens that you will emit.
So, something that has been created but has not been used by anyone, I think, for the moment, is the IRC20, where you create a blank ISA.
And with this blank ISA, you will link it through the manager address to an application that will have all the logic inside.
And you will need to read the information from the application itself.
So, if you want to have the unit name, if you want to have the URL, if you want to have the decimal or the amount, the number of NFTs, the number of tokens that have been created.
We need to query the application itself and not the ISA.
So, that's something to consider, too.
I don't know if anyone of you already know projects which have used ARK18 for royalties enforcement or ARK20.
I don't know a lot of projects.
I don't know any projects on my side, but I know standards exist.
And I also know that people are afraid when they see a clawback entry address.
But issues that I say with an application behind the scene, that's how it should work.
Because you need to have some right to move this thing around.
And that's where the logic needs to be.
Yeah, again, that's the topic I wanted to discuss today.
If anyone have a question about this or about another topic, feel free to comment the post.
And maybe we'll have a new conversation next week about your subject.
And if not, I will just go through the current ARK that are in PolyQuest state.
And that needs to be pushed forward at some point.
Something I can tell you on what we are working on right now.
We have this pull request from a job only about the logic-sig template to allow
more logic-sig inside our ecosystem with a more secure way.
I know that some wallet don't like to sign logic-sig transaction because it can
you have some risk.
If you don't know exactly what you are doing, signing this kind of logic-sig transaction.
So with this template, you will have a white list of credit smart logic signature that
what it can verify before asking you to sign a transaction.
So one well-known approach for that was the home gallery buying and selling system one year ago, where you sent your NFT to logic-sig
score and the buyer will need to buy from this logic-sig score.
That was how it has been done before.
But it was, I think at the time, only allowed with Mayago wallet.
So it's the only wallet you could use to sign this kind of logic-sig transaction.
And for example, if you go on Pera wallet, you will have, I think the first time you will not be able to sign anything.
And the second time you will have an app warning saying that you are taking some risk in order to sign this logic-sig.
So we are considering the standard and we are working with every wallet from our ecosystem to have this new
new thing implemented in order to basically use one of our native features.
So I would just like to do a quick poll based on what I have discussed today.
If you can just say a thumbs up or thumbs down based on what I will say.
So do you like, so do you prefer ISA for NFTs or thumbs up?
Or do you prefer application for NFTs for the future?
I mean, thumbs up for ISA, thumbs down for application.
So I can have a little grasp at what you are all thinking.
So we have one for ISA, one for application.
We don't have only two people in the space.
Why do you prefer, we have another, why do we have a, I know who you are, a creamer.
And why you prefer application.
I would love to, I would love to, to know it.
And yeah, I think the, the feeling we, how I know is people are still attached to ISA.
And I don't understand why because it's a lot of work to change from the current space to a new space.
And I know some of you went to Algorithm just for the ISA feature.
So again, it's a discussion we'll have for months, for maybe years in the future.
But we need to consider that both approaches are pros and cons.
And we need to balance that in order to have the best for our ecosystem in the future.
So anyway, so I will just cut the space.
If anyone of you want to participate, feel free to go to, to the forum, the post I shared into the comment section.
And, or if anyone of you have a question about that, feel free to send me a message.
So yes, Fred, I will ask you to, if you can cut the space.
And thanks to everyone for joining.
I wish you a great Friday and great weekend.
And, yeah, see you next week for a new topic on the art community.
Fantastic.
Thank you so much, Stefan.
Thank you very much, Augofem, to everyone who joined us live today.
And of course, to all of you who catch the recording later.
Always a pleasure to have this conversation.
See you all next Thursday.
Cheers.
Thank you. Bye-bye.
Thank you for hosting.
Thank you very much.
