Just like we say 2020 is the year of DeFi, we can say 2021 is the year of NFT and Metaverse. The adoption comes from not only crypto people. It also comes from sports league like NBA, to media company like the Times, from financial institution like the Visa, to fashion brand like the Adidas, traditional businesses are rushing into the NFT world.
Cross-chain NFT is the foundation and portal to the multi-chain metaverse. Cross-chain NFT will provide the opportunities for the long-tail artists to connect with their fans. It also provides the tool and infrastructure to empower builders to build various applications in the metaverse world.
Harmony launched a cross-chain NFT bridge on last Monday. It is an extension of our widely used "horizon" bridge. Horizon bridge originally supports ERC20 token standard, and we added ERC721 and ERC1155 token standard support. It provides high security via the decentralized multi-signature operators. Two out of the three operators are run by the community. It is a two way bridge. The HRC721 which is the harmony's mapping of ERC721 can be bridge from Harmony to Ethereum. From Ethereum to Harmony, the two popular NFT standard, ERC721 and ERC1155 are both support, with OpenSea verification API support.
How it works?
Users approve and lock their NFT tokens on the smart contracted protected by multiple signers. The bridge operators will mint the corresponding NFT tokens on the other side using the same metadata. The first time when you bridge one collection of the NFT from Harmony to Ethereum, it will cost a bit higher gas fee due to the deployment of the token smart contract, but the subsequent bridging process will cost much less.
I want elaborate a little bit more on why do I think cross-chain NFT is necessary and why it is the foundation for massive adoption.
Let me first ask you a question, how many photos do you have in your cellphone or on your cloud drive? thousands of them, right? However, it was like 20-25 years ago, taking digital photos is kinda a serious and professional hobby, at least for me. Nowadays, how many of you have minted a thousand NFT? Not much I guess. In the crypto world, we are still at the very early stage of the Web2 world. But, I believe in the next 2~5 years, if not 5~10 year, everything can be created as an NFT and everyone will be minting NFT on a daily basis as a tracking record of your digital and metaverse life. Thinking about billions of NFTs being minted and owned by everyone, any single blockchain may not be able to handle those requests.
As you may already know, for now, the high gas fee on Ethereum has effectively limited the liquidity of most NFTs, while communities in each blockchain are asking for NFT accessibility and utilities.
Admittedly, Ethereum still attracts the most prominent artists or NFT collectors. However, emerging artists globally had also created nice pieces and gathered attention already.
On the Opensea, you may find thousands of NFT projects have been listed, but many of them are not able to attract enough collectors or fans. They were minted and sitting idle. For those kind of long tail projects, one approach to expand the user base is to bridge those NFTs to different chains, so to attract different and wider audiences.
Based on the cross-chain NFT, there could be many new applications built on top of it.
What is Harmony's strategy? I have a few ideas that I can share with you. Hope we can get more builders interested in exploring those directions to build new projects.
One section is the NFT derivatives and lending protocol.
Expensive NFTs like the Cryptopunks can be used to generate many derivatives like comics, books, cartoon, or co-branded items. Those derivatives may attract more fans with a lower price. It is like a premium IP can reach wider audiences. Another example, a BoredApe can be deposited as a collateral in the lending protocol on Ethereum, while borrowing ONE tokens on Harmony. As a Bored Ape owner, I would be very happy if that's possible so that I don't sell my ape and in the meantime I can participate in the DeFi projects on Harmony. Some project ideas have already been explored, like the Vera Financial project was just launched last month to enable NFT lending.
Premium NFTs can also be fractionalized on different platforms, so that the ownership can be shared by a DAO or a fund using fractional tokens. There are projects already building the fractionalization on Ethereum already. Again, the high gas fee on Ethereum stopped smaller collectors, which was against the initial goal of make it available to wider audiences.
In terms of GameFi project, they are naturally cross multi-chain, such as the Ronin side-chain built by Axie Infinity is really the catalyst of the booming of the gamers with low tx fee and high throughput. Some new projects are planning to launch multi-chain metaverse as well, such as the GAMA project plans to launch different spaceships on different chains.
The cross-chain NFT is the 1st step and provides the infrastructure of those kind of new applications.
We are still at the DAY ONE of the cross-chain, and multi-chain world.
Harmony is keen to build the infrastructure of Web3. On our roadmap for Metaverse , we want to provide tooling and infrastructure for creatives and artists, like streaming loyalties, gated access using on-chain primitives. Multiple marketplace support, different assets support.
Additional bridges to support other layer 1 and layer 2 for cross-chain NFT.
We have a dedicated $13m NFT grant to support builders, artists, tooling, gaming, community.