Why is the success of the NFT collection impossible without a smart contract?
5 August 2022next article
The NFT phenomenon in recent years can be compared to the effect of the explosion of a powerful bomb. The Internet is simply abuzz with reports of high profits for the authors of NFT collections, who have gotten rich quickly by selling their own works of art. Many people are surprised: the pictures do not seem complicated at all, but others are ready to pay thousands of dollars for them. Of course, now everyone dreams of drawing something of their own and counting money somewhere in the Maldives. But wait: behind every successful project is a little more than just a selection of images. And the smart contract plays almost the most important role here. Let's figure out what's going on here.
Briefly about NFT
First of all, it should be reminded once again that NFT is a non-fungible token. We wrote about tokens in detail in the article "What should smart contract users know about ERC20 tokens?" of our blog. Tokens are not a cryptocurrency, but transactions with them also take place on the blockchain and can benefit their owners. A distinctive feature of NFT is its uniqueness, that is, each individual token cannot be completely replaced by another equivalent. This makes it possible to tokenize virtually anything that is also unique in the real world. For example, your diploma of education: it is issued to you, with your own number and date — there are no other such diplomas, because you are unique yourself. So it's quite possible that in the near future, all of our important documents will have their NFT counterparts in the digital world.
In general, anything can be tokenized, but currently NFT is widely used in art. And this is logical: each work of art is unique and unrepeatable, which means that it fully corresponds to the idea of NFT. Therefore, we can take a specific work of art, for example a painting, photograph it and tokenize the image indicating our ownership of this drawing. All that remains is to burn the physical original and enjoy ownership of a unique and unique image that will forever remain in the virtual world. You can, of course, leave the physical picture — the NFT now has nothing to do with it, as it is a separate digital asset and has its own value.
And here people who know how to collect works of art were incredibly happy. One picture is good, but if the author has several works at once, their total value increases significantly. Since NFT allows you to clearly indicate the ownership of the token, it is profitable to digitize not one, but several pictures from the same series at the same time, in order to arouse the interest of collectors and increase the demand for tokens.
Of course, each card should be unique. But in the digital world, they decided to take a rather interesting path: the artist does not create each image separately, but a set of separate similar elements of the image, which are then combined together in an arbitrary sequence. This is called "Drop". In this way, a collection of several hundred or even thousands of images is generated, each one has a different set of elements and is unique. Also, the generator takes into account the frequency of use of various elements and their groups. Therefore, the character in the image in 995 cases out of 1000 can be dressed in a cap. The remaining 5 images, where the hero is without a cap, are of particular interest to collectors and cost more. These NFT are called “rarities”.
Smart contract for Drop
So if you want to sell just 1 NFT or several individual ones, you really don't need a smart contract. In this case, to get a real benefit, your tokens should be serious works of art and be really expensive. But if you want to launch a collection project using the Drop method, success will not come without a smart contract.
In the case of the release of your own collection, the smart contract takes over the functions of managing the entire process of automatic interaction with buyers of your artworks. At the same time, it is the buyers, not you, who will pay mint — the fee for creating NFTs in the blockchain. Agree, for several thousand tokens, the total mint for the author will be simply sky-high.
In this way, the author can create a collection of as many thousands of images as he likes. This will not be reflected in the associated costs. Also, the smart contract allows you to use the Ethereum blockchain itself, and not any other, which significantly increases the chances of reaching the audience and more profit.
But the most important thing is that you yourself can determine the logic of interaction with buyers and the distribution of profits between different wallets. It is simply physically impossible to implement an effective NFT collection project without a smart contract.
If you are an artist with a world-famous name and your own creative work, NFT collections are obviously not for you. Selling real works of art at regular auctions will ensure you a carefree life and a secure old age. But if you are an artist of the new age, who not only enriches our world with beauty, but also has an idea about new currents in the digital world, thousands of dollars with a minimal capital investment are guaranteed to you by projects of NFT collections. All that is needed is your idea and a smart contract that Avivi professionals will create. We take the complexities of the Web3 world out of your way so you can create freely and make the most of it.
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