Most inventions and innovations rarely work as expected right out of the gate—a fact especially true with technology.
It’s only after real-world consumers begin using the technology that flaws and shortcomings emerge.
To wit: ERC721, the standard by which the Ethereum-based NFT community operates. Despite its industrywide use, ERC721 is troubled by feature limitations that have become ingrained in the system and compounded as the use of the standard has expanded.
Building on its expertise, Callisto Network has designed a new NFT standard that works across the EthereumVM ecosystem to extend and improve upon the features inherent in ERC721.
The new standard, known as the CallistoNFT Standard until a formal proposal for an ERC number is submitted, improves upon three particular issues:
As it is today, NFT buyers and sellers must meet in a centralized location to trade, such as OpenSea, Rarible, and other similar NFT marketplaces. That introduces risks into the system.
Earlier this year, for instance, OpenSea, the largest NFT marketplace, was hacked for 254 NFTs valued at $1.7 million. The risk here stems from listing an NFT on a third-party marketplace, taking that NFT out of the owner’s wallet, and putting it into the marketplace’s escrow wallet. If that escrow wallet is hacked, then the assets held there are at risk of loss.
With the CallistoNFT Standard, that risk goes away.
Through this new standard, an NFT owner can set within the NFT itself a price at which the seller is willing to part with that particular NFT. If a buyer comes along and sees this NFT and wants it, the buyer can immediately find the price at which that NFT can be purchased directly from the owner. If the price is right, the buyer buys, and the transaction clears instantly between buyer and seller, with no third-party marketplace involved. As such, a seller always maintains asset control and doesn’t need to trust a third-party marketplace.
Moreover, buyers and sellers avoid paying fees for transacting on a particular marketplace. That, in turn, has the benefit of moving transactions away from centralized marketplaces and both reinforcing and highlighting the decentralized nature of Callisto’s new standard.
There’s a scalability benefit as well. NFTs using the ERC721 standard can only be listed on a single marketplace. If a potential buyer is not searching that particular marketplace, then that buyer will not find an NFT listed elsewhere. With the CallistoNFT Standard, a buyer could find an NFT anywhere and place a bid on it … and if that bid meets a seller’s price, the transaction completes.
Built-in Monetization for NFT Creators
This has become a huge issue in the NFT space these days.
Until recently, NFT creators/teams/artists were collecting royalties each time an NFT was bought and sold. Recently, however, several marketplaces have begun circumventing these legal agreements and have allowed buyers and sellers to set royalties at 0%, meaning teams and artists are being cut out of the projects they created.
CallistoNFT Standard addresses this by allowing creators to build the royalty structure into the contract itself.
The unique arrangement offers two primary benefits:
First, it prevents marketplaces from subverting the royalty structure since the fees are embedded in the NFT contract itself.
Second, it allows creators to scale or adjust their royalties. An artist could, for instance, set a royalty structure that evolves based on time, meaning the royalty might decrease based on the length of time since mint, or it could evolve based on the number of times an NFT trades.
As such, CallistoNFT Standard has the potential to become the standard operating procedure across numerous blockchains where NFTs are popular.
Every NFT is comprised of various properties, whether that’s the color of the background with a profile picture NFT like a Bored Ape or statistics that define a “card” used in an NFT-based game. The problem is: Data formatting for such information is not standardized across the ERC721 user base.
Thus, each NFT collection is effectively a one-off asset.
That, in turn, makes it difficult for wallets, blockchain explorers, and others to manage these assets efficiently since the wallets and blockchain explored have no predefined data points they can call up and refer to.
CallistoNFT Standard standardizes the format for storing the unique properties that define each NFT. The result is that NFTs can be more easily implemented by developers in a product, extending the use cases of the NFT and its potential adoption/reach.
A game developer may want to include an NFT asset that is useable across multiple gaming universes and possesses a particular trait. Implementing that asset on a piecemeal basis and researching its specific characteristics would be exceedingly time-consuming. But with data standardization, that same search could be completed in seconds on a blockchain explorer, which is clearly the direction the NFT space will head in the very near future.
An enhanced standard for non fungible tokens (NFTs) with advanced capabilities.
The CallistoNFT Standard builds a stronger, better, and more efficient infrastructure for the burgeoning world of NFTs based on EthereumVM architecture and, thus, useable across all Ethereum-based blockchains.
And while this might not seem as big as, say, Ethereum’s recent move to proof-of-stake validating, the reality is exactly the opposite.
The CallistoNFT Standard arises just at the moment NFTs are set to explode into the mainstream, invading all facets of social and monetary life over the remainder of this decade and beyond.
The existing ERC721 standard—with all of its limitations—is going to be a significant and annoying hurdle for many would-be NFT users and adopters, whether they are consumers or creators.
By eliminating those hurdles, the CallistoNFT Standard becomes the bridge that connects the masses to the blockchain.