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A Platform as a Service (PaaS) for NFTs
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LIBERLION

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A non-fungible token, or NFT, is a special type of cryptographic token that represents something unique. Unlike a cryptocurrency, which is a fungible token, or FT, such as bitcoin or ADA, NFTs are unique, indivisible, and scarce, but they are also transferable just like FTs.

The possible uses of NFTs are innumerable. Today, many NFTs are used for games or digital collectibles. Due to their rarity and uniqueness, they can become very valuable to their owners. The most common current use of NFTs is collectibles, i.e. digital art cards, for example of a famous sports figure, with limited existence and unique digital markings.

NFTs are digital objects that contain metadata, tagged bits of information. In the case of visual art NFTs, the image is an essential piece, and is part of the metadata.

From March 2021, when the feature to mint native tokens (Hard Fork Mary) was enabled until the time of writing, more than 4 million tokens have been minted on the Cardano blockchain.

Cardano supports user-defined NFTs natively, without the need for smart contracts, as is required on Ethereum.

The use of metadata in Cardano is another substantial difference from other blockchains. Metadata is a description of native assets that is stored using identifiers that are not readable. The readable version of this information, the image, can be in any format (JPG, JPEG, PNG, WebP, GIF, etc.), and is stored outside of the blockchain, not stored on the Cardano blockchain, and is It can be hosted on decentralized or centralized systems.

There are no restrictions as to what can be part of the metadata, however, in the Cardano ecosystem, CIP-0025 sets the standard for how metadata should be structured and what it should contain as a minimum. This includes a name and image attributed to the NFT.

Hosting services can be IPFS (InterPlanetary File System) or Arweave, accessing information through its unique asset identifier, the hash ID.

Both technologies run on the principle of decentralized storage (not controlled by an individual or group) and persistence (cannot be deleted), however web storage is now also an accepted solution and instead is centralized (controlled by an individual or group) and temporary (remains available until removed by the host).

NFT image file sizes can be large, averaging 4.7MB each. This requires a substantial amount of bandwidth when viewing multiple NFTs. Thus there is a cost to the service provider to deliver this content and a cost to the end user when viewing this content using mobile data.

Additionally, serving NFT image files efficiently requires a Content Delivery Network (“CDN”) to ensure availability and fast delivery around the world. A CDN is a group of servers strategically located around the world to provide end users with the fastest cached (i.e. temporarily stored) file from the nearest Point of Presence (“PoP”).

An NFT Content Service Provider (“CSP”) can pay up to several thousand dollars per month and this is why cost optimization is necessary to run a sustainable business model in the Cardano ecosystem.

While it is true that free CDN and image optimization services may exist, there are inherent limitations on bandwidth consumption within those pricing plans, severely restricting the scale of projects using such solutions.

There is also a cost to end users viewing the NFT images, particularly those using mobile data.

The cost burden of deploying, monitoring, and maintaining adequate infrastructure that delivers high-quality CDN performance will have a significant impact, both on CapEx and OpEx. This takes crucial time away from companies and/or app developers, delaying their time to market, because they should be focusing on activities around their product.

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