So far, NFTs have thrived mostly on Ethereum. A new release shows that may be changing.
On Jan. 31, 0x, a four-year-old protocol that facilitates token trades, rolled out a swap feature for NFTs compatible with any chain compatible with Ethereum Virtual Machine (EVM). This may help NFT marketplaces, as well as general NFT developers, expand to other blockchains and change the landscape for the unique digital tokens, which Ethereum currently dominates.
The EVM is, in essence, a set of rules that determines a smart contract’s code. Blockchain’s like Avalanche, Fantom, and Optimism, also a Layer 2, are EVM compatible, meaning they stand to benefit from 0x’s new standard, which will be released as part of the protocol’s v4, pending a vote in February.
0x is a protocol generally known for facilitating trades of fungible ERC-20 tokens, but the project has actually been involved with ERC-721 tokens, more commonly known as NFTs, since 2018.
“By having a single swap protocol that behaves in a consistent way, it makes it possible for a marketplace to support NFT communities regardless of whichever chain they happen to form onto,” Will Warren, co-founder at 0x, told The Defiant.
Warren added that because OpenSea, the dominant NFT marketplace to-date, only runs on Ethereum, Polygon and Klaytn, projects started on other chains are cut off from a critical piece of infrastructure.
OpenSea actually uses a set of smart contracts called Wyvearn for its Ethereum deployment, but uses 0x’s contracts for its Polygon deployment, according to Warren. If OpenSea were to be able to use one standard for both chains, in addition to any others, it could significantly reduce overhead.
Warren declined to speculate whether OpenSea would adopt the standard to deploy on other blockchains, but added that 0x’s v4 update, which includes the new NFT swap functionality, would benefit a marketplace like OpenSea.
The standard’s features include on-chain listings, which neither OpenSea or LooksRare offer, 0x said in its announcement post. On-chain listings will allow multiple marketplaces on a given blockchain to list an NFT because the data is openly available. This contrasts with off-chain listings, where users will cryptographically sign a message allowing a specific marketplace to list an NFT with certain parameters.
“I think a lot of these projects are fairly siloed, even on the same chain,” Brent Oshiro, head of customer experience and communication at 0x, told The Defiant. “Imagine a world where the moment you create these awesome NFTs they’re available on any marketplace that is looking for these on-chain listings on 0x.”
Other features of 0x’s v4 NFT swap standard include gas optimizations, which the 0x team says make it up to 41% cheaper to buy and sell NFTs, and what the project calls collection orders. This means a person could easily sweep the floors of a collection or set a bid for a specific trait, for example, a CryptoPunk with a cigarette.
0x doesn’t stand to gain financially, at least directly from the releases and bills the new standard as a “public good,” in its announcement post.
“Y’all don’t understand what a chad move this is,” tweeted Jinglan Wang, Co-Founder and CEO of Optimism, which has also made moves to direct profits towards public goods. “0x team built purely this to reduce friction for NFT builders. It’s completely free and open source, 0x does not profit from this.”