Text in the image: Oh, look, FTX hosted all the NFTs minted on its platform with the Web2 API, and now the metadata for all of those NFTs has been corrupted and linked to a reorganized website.
This shouldn't have happened. But this is certainly possible for any NFT project that doesn’t consider metadata and how to store it.
In the past year or two, NFT has been very hot, and everyone is eager to launch or produce NFT series. But the vast majority of projects focus on the audio-visual design of NFTs and ignore how to store and process metadata.
However, if NFT projects want to endure and provide long-term value to the ecosystem, they should improve the level of metadata archiving and choose the best storage and processing methods.
ERC-721 and NFT’s metadata issues
NFTs are inherently unique. However, within the larger context of Web3, their uniqueness does not apply to visual or tangible assets.
Images can be copied and saved as .jpg for free, replicas of designer handbags can be made cheaply, and in both cases, the difference between the replica and the original is indistinguishable – it’s actually the data behind the scenes that makes them unique.
The ERC-721 token standard makes NFTs possible and changes the way we handle asset ownership. It allows creators, issuers, and validators to record a project’s unique metadata on the blockchain.
This permanent inscription allows users to easily check a token’s backend data to confirm uniqueness or detect anomalies, keeping counterfeits out of the market.
ERC-721 is one of the main pillars of the NFT ecosystem and is an important cornerstone of multi-billion dollar NFTs including Mutant Ape Yacht Club (MAYC) and Unstoppable Domains (Web3 domain names). But it also has disadvantages...
URI localization
NFTs are distinguished by their unique identifier—a kind of ID number. In addition, every NFT has a smart contract address. Therefore, most people basically identify NFT by ID and contract address.
The ERC-721 metadata standard also includes a URI (Uniform Resource Identifier, a string used to identify the name of an Internet resource).
Using a URI, you can locate or retrieve an additional metadata file that is too large to be stored on-chain. Typically, it contains data, images or videos, as well as attributes such as series number, author, release date and time.
But there's a problem. Metadata URIs can be stored and saved anywhere.
For example, a MAYC NFT can be worth tens of thousands of dollars, but what about its data? It's just a URI that can be stored anywhere - even on a centralized server like AWS (Amazon Web Services, the world's most comprehensive and widely used cloud platform owned by Amazon)...
This means that users do not have complete control over the data, and metadata is also at risk of being tampered with. And most importantly, this shakes the foundation of what makes NFT an NFT.
Metadata updateability
In addition to URI positioning, the option to update metadata is also essential, especially in games, where in-game NFTs can reflect game updates and player status.
In order to improve the interoperability and flexibility of NFT, someone proposed a new EIP-EIP-2477 a few years ago (although it has not yet been approved). It introduces a feature so that the NFT metadata hash can be updated every time the metadata URI changes.
However, similar to other metadata update methods, this will bring some unnecessary expenses and high costs.
NFT metadata storage should be decentralized
Many NFT projects choose to use Arweave (Arweave is a tool that helps people store data permanently. The way it works is to distribute the stored information in a computer network called nodes or miners) or IPFS (IPFS generally refers to the Interstellar File System, It is a network transfer protocol designed to create persistent and distributed storage and shared files) to solve the URI storage problem.
This distributed method of storing NFT metadata does have some protection. But it also has disadvantages.
For example, based on Arweave, each file has a unique URI, which means that each newly created NFT corresponds to a URI. This drives up the cost of NFT transactions and makes it very difficult to airdrop NFTs on Ethereum.
Let’s talk about IPFS. IPFS can handle pre-generated URIs (each newly uploaded folder in the URI will have the same hash but contain different metadata file names).
This allows cheaper NFTs to be launched on Ethereum, but it may also result in the loss of NFT features. Additionally, IPFS is difficult to use, and it does not provide an easy way to integrate IPNS for metadata file editing.
Most NFT projects then take a hybrid approach to storing NFT metadata, where the written metadata is accessible through a centralized Web2 API, while the visual content is stored on Web3 IPFS.
This way, the owner can change the metadata as needed and update the NFT based on their own situation or real-world context. This helps prevent the problem of missing NFT features and allows delayed NFT projects to be relaunched, while NFT metadata is also easy to update.
However, Web2 API access to centrally stored metadata is exactly why FTX-based NFTs are broken…
IPFS+IPNS = decentralized updates
For NFTs to achieve value, security, and flexibility, they should store metadata in a decentralized manner and support easy and affordable updates.
As far as decentralized storage goes, the best approach is indeed to use IPFS.
Although services like Pinata do provide a gateway to IPFS (also known as an Internet connector or protocol converter) for NFT metadata storage. The gateway implements network interconnection above the network layer and is a complex network interconnection device. Only used for network interconnection between two different high-level protocols), but they do not provide IPNS, which is a basic feature of in-game and other upgradable NFTs.
The full name of IPNS is Inter-Planetary Naming Service, interplanetary naming system. This system can map the URL addresses we use to access the Internet today into a series of hash values in the IPFS system.
In this way, when a web page or file we visit is stored in the IPFS system, we do not need to enter a string of hash values to access it, but only need to enter the URL address of the web page as we do now, and this address passes through IPNS The mapping can point to the web page we ultimately want to visit.
It allows users to update metadata without changing the URI in the NFT contract, thus saving transaction fees and time.
summary
Let’s sort out some of the storage methods used by NFT projects. URI positioning puts the data at risk of being tampered with, and the owner cannot fully control the data; EIP-2477 can easily bring high costs; Arweave is not conducive to NFT airdrops; simply use IPFS Inconvenient to operate; Web2 API+IPFS causes NFT on FTX to be destroyed. The tragedy of FTX proves the importance of comprehensive decentralized storage, and the best method is IPFS + IPNS.
Source:medium
Compiled by: [email protected]
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