NFTs — Non-fungible token, Word of the year 2021. What more can I say 🤷?
NFT: a unique digital certificate, registered in a blockchain, that is used to record ownership of an asset such as an artwork or a collectible.
As NFTs continue to mature, there has been an increased demand for technologies and tools that can ease their mass adoption. At the time of writing, the most pressing issue is Ethereum’s high gas fees which currently places a very high barrier to entry into NFTs for both creators and collectors.
As a result, many people are currently seeking alternative blockchains that can remedy this situation. The Algorand blockchain is one of these emerging solutions and in this post, you will discover NFTs on Algorand.
This guide is to help you understand all the moving parts of NFTs on the Algorand blockchain. We will talk about:
- NFT Tokens
- NFT standards on Algorand: Similar to ERC-1155 or ERC-721 on Etheruem
- Storage: Where to store media (images, audio, video) and metadata
- Minting an NFT on Algorand
- NFT marketplaces/tools on Algorand
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Why Algorand?
Algorand positions itself as an environment-friendly blockchain that allows for the simple creation and launch of NFTs. In contrast to EVM-compatible blockchains like Ethereum and Polygon, there are multiple ways to create an NFT on Algorand. We will discuss some of them later down the road including some best practices you can adopt.
Understanding NFTs on Algorand
On Algorand, you create an NFT using an Algorand Standard Asset (ASA) — You do not need a smart contract for a simple NFT, but customized behavior like royalties and others will warrant one. An ASA is characterized by :
- ID
- Creator (required)
- AssetName (optional, but recommended)
- UnitName (optional, but recommended)
- Total (required)
- Decimals (required)
- DefaultFrozen (required)
- Asset URL (optional)
- MetaDataHash (optional)
This is the information you provide when creating an ASA (except for the ID which is generated for you) and it cannot change after creation.
Note: For a more detailed explanation of each attribute, check out the official site.
With this in mind, a Pure NFT is designed as an ASA or asset that has the Total number of units set to 1 and the Decimals set to 0. When you create this special type of ASA, you are minting an NFT.
Notice, that I use the word Pure NFT. This is because it is possible to create Fractional NFTs on Algorand too. But the latter is seldom used and out of the scope of this guide.
Algorand NFT Standards: ARC03 and ARC69
NFTs are fairly new to Algorand and constantly being improved. Currently, Algorand supports two frameworks for creating NFTs, ARC03, and ARC69. Think of these as guidelines that allow your NFT to be compatible for viewing and trading on marketplaces.
ARC03 was the first NFT standard and it allows for NFT metadata (name, description, link, traits) to be stored off the Algorand blockchain. The way this works is that you upload your metadata json file to a server (centralized storage) or IPFS (decentralized storage) and then you put this link into the Asset Url field when minting the NFT.
This way, any website displaying the NFT knows to get the media link from the external_url field of metadata.
However, the very first implementations of NFTs on Algorand did not look like this. This is because Algorand allows for one very easy way to mint an NFT by putting the NFT media link (e.g jpg) directly into the Asset Url field when minting the NFT. As you might have guessed this method has some drawbacks. For example, no means of adding attributes or any type of metadata as a matter of fact.
This was one of the greatest motivations for ARC69. ARC69 complements ARC03 by allowing assets to have metadata that is stored on the Algorand blockchain. For a full read on the specification, check out the official doc here.
I also came across this nice piece that explains step by step how to add metadata to an existing NFT asset. And I believe, going through it will give further clarity on the ARC69.
Now, a question on your mind could be - What standard do I use ? My short answer will be that you do both. Remember, that the two standards are not mutually exclusive. However, ARC69 is gaining a lot of ground at the moment and looks to be the preferred option for many creators.
NFT Storage
When working with NFTs, it is primordial to understand where to store what. But before we delve into it, let’s talk a bit about what needs storing in the first place. As I already mentioned, an NFT is an Algorand asset (sometimes with a smart contract) and hence lives on the Algorand blockchain. With NFT metadata and media, storage is more flexible.
Your metadata which describes the characteristics of your NFT can be on-chain (with ARC69 for example), on a centralized server, or on decentralized storage like IPFS. Media files like images, audio, or video for their part, are a little heavy for the blockchain and as such generally go on a server or IPFS.
Note: IPFS is by far the most popular storage option for both metadata and media, simply because it is decentralized.
Minting an NFT on Algorand
Now, let’s talk minting. There are quite a few ways to go about minting an NFT. No matter how, the basics are the same, and that will be my focus. Hopefully, after understanding those, you will be confident enough to mint your own NFT on Algorand.
So let’s imagine your friend, Brenda who is a digital artist reaches out to you for help with setting up an NFT. Of course, you are happy to help her and decide to set up her NFT on the Algorand ecosystem using the following steps.
- You set up an Algorand wallet for Brenda — ideally, she will do this herself for security reasons.
- Then, you get information on the art and prepare an ARC69 metadata json document.
- Next, you upload the image to IPFS.
- Finally, you mint Brenda’s NFT on a marketplace.
Taking into consideration everything we have discussed, this should make complete sense. I can understand if there are still a few gaps but that will no longer be an issue after you check out these resources.
- Mint your first NFT with AB2 Gallery (Non-technical approach)
- Minting NFTs on Algorand programmatically (Technical approach)
What are NFTs without marketplaces 😎
Since NFTs are relatively new on Algorand compared to Ethereum, NFT marketplaces/tools are new as well. In spite of that, it is amazing to watch these projects grow and mature in the space. Here are a few worth checking out.
- NFT Explorer— https://www.nftexplorer.app/
- AB2 Gallery — https://ab2.gallery/
- Algomart— https://github.com/deptagency/algomart
- Rand Gallery— https://www.randgallery.com/algo-collection/
This section is definitely one that I will have to update from time to time. So feel free to drop any Algorand NFT tools that you have across and find useful.
With this understanding of NFT standards, Storage, Minting, and tooling you have all the knowledge to start navigating the waters on Algorand 🙂. There is still a lot that I didn’t cover in this guide but understanding those wouldn’t be a big issue once you are okay with everything we discussed here.
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This wraps up NFTs on Algorand in a nutshell. You can leave any questions you have in the comments below and don’t hesitate to connect 👋 with me on Twitter as well.
Thanks!
