Breaking Down an NFT to Its Atomic Level | Benny Giang - FUTURE PRIMITIVE

hello hello how's it going everyone Friday morning thanks for showing up I know some of the folks here are also speakers so welcome welcome um my name is Benny and I'm one of the co-founders of Future Primitive I come from Vancouver Canada so from the West Coast represent the teams up there with all their cameras so a little bit about me um as I said I'm a co-founder of Future Primitive and also the co-author of ERC 6551 AKA token bound accounts previous to to that I was part of the team that wrote the ERC 721 standard and the nft standard I was part of the team that launched crypto Kitty that if watero and then we launched Dapper lobs and then I worked on NBA top shots leading one of the main uh product teams so it's been an incredible journey from uh the cats all the way to basketball uh seven years since nfts came out when it was 12 people uh me and Gabby from Y and you have jho from axi you have Devin and Alex from open sea and we would kind of be like the circus Trope uh flying around uh to different you know to Denver and to different cities and you know spreading the word around nfts and people would look at us and give us a weird look so uh now 7 years later I think that Future Has uh come to fruition so um yeah I'm here to cool so and the other thing that's really special is uh this week is the oneyear anniversary for token bound accounts um many of you may or may not know I'm going to be talking a lot about token bound accounts or ERC 65 51 but we actually released and published the standard uh the ERC uh last year here at Denver we were hacking on a project so it's incredible to come back here and be invited back by uh the E Denver folks uh to talk about it so I'm going to bring us back to the '90s to the internet um the early websites I'm sure some of these look very familiar uh as a kid growing up uh I had a a pirated version of um of Photoshop and I was always like tinkering around with HTML CSS uh and uh I'm sure a lot of people share that you know similar experience in in our teens and what I find really fascinating is the web so you know the inter the internet the web um it kind of kickstarted this what we call the hyperlink error where you had uh dis dispers websites that are linked to each other via hyperlinks um and it enabled you to navigate websites you had search engine um and it really democ democratized the sharing and and the website launch I really think that nfts are moving into a phase where they'll increasingly resemble modern-day apps and websites uh and eventually autonomous agents offering a lot of new functionality right now we're kind of in this phase where nfts are static uh they're an asset that you put in a wallet um but it could be so much more so the way I like to think about it is you know as of any website or app there's a front end and there's a back end the front end of an nft uh for us is I think about it from the context of metadata traits and the renderer and then the back end of the nft is the onchain logic the smart contracts potentially token man accounts which I'll talk about or uh a a centralized database so if we're all assuming that the nft space needs to move forward that's part of the reason why I'm here giving the this talk uh well we have to imagine nfts becoming something else more than what it is such as something that's Dynamic and stateful and we're going to break down this onchain stack and talk a little bit about it so the front ends um the front end is composed of the media file so when you go to openc or any Marketplace or rable uh or uh Magic Eden Etc or wallet uh you see the actual image of the nft it could be a JPEG a video could be a 3D file um that's part of the nft the front end the second part is the metadata so that's the trait that's the metadata description um that's all the things that other people uh look at and evaluate uh value Etc and then the renderer so how is the image composed uh is it composed on an offchain setting on a server and then kind of uploaded to ipfs or is it live rendering um there's just a lot of different things happening here and there are already tons of standards and protocols and companies working on what I call the front end of an nft such as uh 4906 7496 blah blah blah there's quite a lot of them I I couldn't uh list them all but they heavily focus on changing the artwork or making the metadata updatable um making traits uh you probably heard of metadata trait swapping so all of those things are great Innovations for the front end of an nft but when you look at a back end of nft um and what do I mean by the back end well um things like on crypto kitties when you breed the kitties together the breeding contract is what I consider sort of the back end uh it has logic around like hey these two tokens together they create they merge and they create a new a new crypto cutie right and so you can kind of see things like moonbird nesting or or Doodles space Doodles that all of those are custom contracts that are not composable at all um you can't simply just Fork the breeding contract and then plug and play it into your own nft project you have to write it from scratch so if you are a developer well you're going to have to write that contract if you're not a developer well you're going to have to pay a lot of money to hire a developer to write that contract not only that nobody else can use it besides yourself um or projects opt for no utility at all so they just launched the nft and then they walk away and the third one is they use a centralized database which uh I think as we all know uh has its pros and cons but uh ultimately we are here because nfts should be an onchain asset that's Dynamic and so that's kind of how I Envision um the back end of an nft now a lot of people ask like how do you kind of think about token bount accounts where would you place it is it the front end or the back end and as you can see in this visual I the token Mount account is actually complimentary to erc721 um I think a common misconception is that people think token Mount accounts are replacing 720 1 that's entirely not true at all uh 6551 is not a token standard it's an account standard and so it works really well with 721s and for the first time ever we're imagining a future where an nft has a universal account and identity layer across the entire evm um that's kind of a mouthful of words but as of right now I think everyone in this room everyone in the Stream when you buy an nft you buy it on a singular chain and to move that asset from one chain to another it's not impossible but it's not ideal it's quite actually broken and we're going to talk about that in a second so altogether this is how we imagine the atomic level of an nft onchain stack it has the front end and the back end and this is a such an important thing to really think about um as people are building in this space or people who are um participating or buying nfts is you know where are nfts going it's already been seven years we went from a very static 10K pfp with the punks and then we went into breeding and battling with axes and web 3 games and then we went back into 10K pfp which was happened about two years ago then if you're a a person of patterns maybe the next pattern is going back into the dynamic future uh for nfts which I truly do believe in so the way to think about token man accounts is we all know with metamask or any EA wallet or any wallet um is you or your own bank account which I think uh is incredible and an amazing thing number two is you have Innovations like the multisig or nosis safe or safe where your online community or your internet Community uh has its own bank account uh that's super awesome the way to think about token bound accounts is your objects now have a bank account and I know this analogy is kind of like mind-blowing but you can imagine this chair has a bank account it's kind of weird right where like imagine this B this you brought this chair into uh Chase Bank and you're like hey I I would like to open up a checking account for this this chair and the first thing they're going to be like yo you're crazy what are you talking about there's like do you have ID for this this chair well you know in crypto we we we usually bend and and break rules like uh quite often actually I'm sure at e Denver there's already been so many new on so uh this is kind of like a simple way to explain it to you know your friends and family of how token Mount accounts work is hey imagine this chair has a bank account uh and I think usually that you know causes one eyebrow to raise up but I do think that there are three problems of nfts and I'm going to you know go through them and kind of talk about what is happening um and how TBA is kind of come into play the first I think is very very obvious um and you know I get a lot of mixed feelings here right where speculation is both good and bad it's good because it brought new people into the space it created new communities in this last wave but at the same time uh it also causes issues too right where if everything relies on the whole pumping and The Dumping and the floor prices it's not good I think we all can attest to it uh we're in a good spot now to really look at the data and be like yeah actually uh it's not ideal and the other thing is the nft space is very uh unequal in some ways right um the top 10 top 20 projects they made incredible amounts of money they've uh raised even more money and they've hired an army of devs they even acquired companies I'm sure you know in the last few weeks um and so they have the Firepower but somehow in in some weird way they're kind of slow in shipping things even with 300 developers or 200 developers um but what's really unfair is that the 99% of the other NFD projects um simply because they may not have the technical talent to write custom contracts simply because there are no nothing that's available for them to add on chain logic they're kind of dead in the water they they end up with no utility but token bound accounts because it's retroactive it actually uh links to every nft that has ever existed since crypto kitties and Beyond um that that's kind of the amazing thing is actually we're trying to raise all boats and have all nfts become uh incredible assets that are Beyond just speculation fungibility so this one's a fun one uh I like to use this scenario so uh you have your your grandfather's camera that he has kept and babied and and owned and he's like hey I want to give this to you as a as a way for you to safekeep and then you have a water cash or a bank account that you keep in your pocket um and inherently these assets are very different I think we can all attest to this this is not a a a surprising thing right they both have value but they're fungible in different way waste but I don't know why for the last four or five years people have been trying to like slice up an nft into pieces and like FR fragment frag created into fragments and make it liquid and make something nonf fungible fungible and and you have like weird things like 404 where hey you got to own these five balls it's erc2 but I I like to just play with the scenario you got to own these five balls and if you have them you get the camera but if you sell one ball while the camera's gone all these kind of trickery things that you you're trying to introduce to make nfts hence the word non-fungible tokens into fungible tokens which to me kind of like makes no sense um and so you know I I I personally think your grandfather's camera uh does not equal the W of cash and we shouldn't try to like slice it up and cut it up and do weird things with the nft in fact we should actually make it more non fungible um and so you know to make it more non-fungible we have to consider all the parts that make make up the camera that includes the film that's in the film R the film rolls in the camera and there's also all the mechanical pieces that are part of the camera so not only if it is it your grandfather's camera but you have all of these different parts and so with token Mount accounts we actually go the entirely opposite way instead of trying to slice up an nft to make it liquid we're actually making nfts more nonf fungible it's kind of ironic but it is true you can see the moonbird actually owns a clone X which owns a shirt yes you can nest nfts in an nft and an nft and an nft to infinite time uh so that's kind of what's going to make nfts extremely non-fungible and hard to assess the value identity so I have another scenario for you uh Amelia she lives in the US she's a US citizen she wants to open a bank account in Japan but the these are fictitious laws so don't take this as legal advice it's kind of there's a statement down there but let's just pretend that it's required by Japanese law that she needs a Visa in order to open the bank account and so she goes into the Chase Bank in the US and they're like yeah you know we can work with the government give you the Visa but you got to freeze all your assets on in the US side your car your bank accounts let's just kind of lock it up um and then you can safely you know move to Japan the really weird thing is that Amelia still has to pay us tax and J Japanese tax every single year because technically she's still a US citizen so one day she wakes up and she's like uhoh well seems like the bank decided to confiscate um the car the her grandmother's ring and her storage unit and her bank accounts all of that and she's really really really sad let's replace Amilia with isuki so isuki lives in ethereum and now isuki wants to go to optimism and right now this is extremely difficult um it's very costly to do it uh you either lock up your isuki hence locking up the assets or you burn the assets and you mint like a clone on the other side and right now you have to use third party Bridges or native Bridges where then you have to kind of you it's kind of like the Chase Bank you got to lock your things there and then trust that it's all good that uh all your stuff's going to be there at all times but this problem gets even bigger when you're thinking about hey how does this Suzuki uh transport across the entire world and across the whole L2 Network when there are hundreds and thousands and tens of thousands of l2s in the future this problem becomes really really really big and this is where token B accounts become extremely magical uh tbas are going to be the central point where it is a decentralized registry that's deployed on every single uh L2 and you have a a single address that's the same across the board so you have a singular address that's Associates with your mainnet nft across all l2s and so it's imag you could kind of imagine this for yourself imagine that just on one day you snap of a finger you get access to any country in the world you get the passport you can get up to like a 100 passports if you want uh and you can stay there as long as you want uh we all know that's impossible but TBA that's the magic trick that uh I I think will be world changing for the NF asset class so a few other things that I want to touch on I have three more minutes is talk about more on the technical side so token bound accounts version two this is what we launched last March so uh it's been almost a year now so version two was really early there was no uh cross-chain connection so you the whole idea was that all the nft on mainnet or on other chains had a a TBA account address then we built version three where now uh this is the current state of things is uh if you have an asset on Main net you can actually execute a transaction on polygon and optimism and the thing you cannot do right now is have a polygon nft executed mainnet uh transaction so this is not possible uh at the moment and so we're actually uh we have announced earlier this week but we're we're having we're forming a partnership with layer zero and they've been incredible partner in opening up uh you'll see the next slide it's going to be mind-blowing uh the the amount interconnectivity that's just going to mindblow every nft that's out there so now we're in a reality where we have token bound version three with layer zero version two where now you have announ on NF uh on ethereum and you can effectively transact not only to an L2 but an l22 back to the main net or L2 to L2 you can see how crazy those arrows are uh and it's about to get really really fun uh with this new so this thing's going to be pushed V3 plus layer zero version 2 very shortly I think I think in the next week or so um and so anyway we think that tbas are a fundamental evm Paradigm it's here to stay um it's a staple I I think the way I think about it is chapter one of nft started seven years ago and it was the idea of a unique digital asset that you can own now chapter 2 of nfts is thinking about nfts as onchain you know assets that you can interact with and has a universal account and then we didn't even get into the other things around onchain agents which Jaden my CTO co-founder talked about earlier this week you should definitely watch that talk cuz um TBA is actually open up access to onchain agents and I would kind of put tbas in this realm of like you know amazing innovations that have really drastically changed the ethereum environment ZK proofs flash loans reaking Mev nfts itself tbas all of these are fundamental Primitives that have essentially created um you know you know billions and billions of dollars of value many many companies it has changed the entire way of thinking and so that is my presentation thank you everyone for your time really appreciate [Applause] it