Wrapped NFTs: The next phase in crypto-collectibles

Part 1 of a 3-part series on wrapped tokens

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Wrapped Gen0

Background

Since then I’ve been advising on some great projects in the space, notably Avastars — but I’ve also been looking for a fun project of my own, so the NFT Hackathon is a great opportunity to explore an area I’m currently fascinated by: Wrapped NFTs.

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What are NFTs and why ‘wrap’ them?

The non-fungible part means that every token is unique. So CryptoKitty #8036 is completely unique compared to CryptoKitty #9484. In a sense, they are not interchangeable (fungible) compared to cryptocurrency where 1 BTC in my wallet is the same as 1 BTC in your wallet.

This is where wrapping comes into play.

Wrapping a token is exchanging one set of standards for token interaction with another set of standards.

In this case, most NFTs are defined using a standard called ERC-721, which maintains each token as a unique id and defines how to exchange them individually. Compared to the standard for cryptocurrency tokens, ERC-20, which allow tokens to be sent as multiples and fractionalized.

NFTs being unique is an advantage in some ways– you can have one CryptoKitty worth a few dollars, while another might have more rare qualities that make it worth a few thousand.

However, what if you wanted to take a collection of 1,000 CryptoKitties and exchange them for their ‘floor value’ — that is the minimum value that someone would buy them for on the open market. Normally you would have to list each individually and sell them one-by-one. Wouldn’t it be easier to have more liquidity around the market for a base value CryptoKitty so that you could trade them all in one transaction?

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wrappedkitties.com

Enter Wrapped Kitties

List of Projects Wrapping NFTs for ERC-20 Tokens

What’s Next?

Part 2 — Different Flavors of Wrapped Tokens

If you’d like to help out, find me on Discord kai#1369

Written by

Experience Design at Netflix • Follow @kaigani

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