NFTs
8 NFT Primitives You Should Know
If DeFi has “legos of money”, then NFTs have “legos of culture”.
Another way to put it? NFT Primitives.
In cryptography, a primitive is a fundamental building block that can be used to create more complex systems or applications.
NFT primitives are important because they pave the way for new innovations and new use cases around NFTs, allowing developers to create more sophisticated and versatile experiences.
To give you a better idea of the programmable possibilities here, let’s look at 8 examples of some of today’s most notable NFT primitives.
1. Zora Protocol Rewards
by Messari
When a creator selects the “Free + Rewards” pricing option when minting their NFTs on Zora, they become eligible for Protocol Rewards by splitting the Zora Mint fee of 0.000777 ETH.
Upon new mintings, these rewards are accumulated in an escrow contract and can be withdrawn by the creator at any time.
Developers or platforms that facilitate the creation of NFT collections or refer collectors to mint NFTs also receive rewards. This includes “referral creation” rewards for those who bring creators to the platform and “mint referral” rewards for those who bring collectors.
Hence, Zora Protocol Rewards introduces a fundamental reward mechanism that can be leveraged to create new applications, for example, alternative self-funded Zora front-ends. It can also be easily integrated into existing NFT projects and platforms.
2.ERC-6551
ERC-6551 introduced a fundamental change to the NFT space, allowing NFTs to function as their own smart contract accounts.
By allowing NFTs to own assets, interact with web3 applications, and act as onchain identities, ERC-6551 has significantly expanded the basic properties of ERC-721 tokens. The composable nature of ERC-6551 means it can be combined with other protocols and applications to create innovative NFT utilities.
For example, the original architecture of the AI-based simulation game Parallel Colony was inspired by ERC-6551, as the standard allowed the game’s AI agents to act as wallets and manage their own token assets.
3. Boosts
Boost is a distributed incentives protocol. It allows for the deployment of incentives, i.e. tokens, to encourage targeted on-chain actions, and recently we have seen more and more incentives deployed to drive engagement for new NFT mints.
For example, you can set up a boost so that the first 100 minutes of your latest NFT drop will receive 2$OP each as a reward. How you configure the parameters is completely arbitrary and up to you.
That said, Boost’s open and composable design allows it to be easily integrated into other applications, allowing it to serve as a lever for anyone looking to take advantage of its features.
4.DN-404
DN-404an optimized version of the ERC-404 experiment, helped popularize a new way of creating hybrid tokens that act as both fungible (ERC-20) and non-fungible (ERC-721) tokens.
Consequently, DN-404 can be used in a variety of applications, such as enabling fractional ownership of NFTs, increasing liquidity for NFT projects, and creating new trading mechanisms that leverage fungible and NFT properties.
5. Noun Protocol
One of the most popular NFT primitives is the Noun Protocol.
With this system, Nouns pioneered a complete model for continuous NFT generation, auctions and community governance. This foundation has inspired and been modified by many dozens of spin-off projects to date, leading to the phrase “substantive DAOs.”
The fully on-chain nature of the Nouns Protocol also means that developers can build new applications around Nouns as they please.
6. Net Delegates
Created by the team of Delegates, Net Delegates introduced a new mechanism that allows delegation rights to be bundled into tradable NFTs.
By allowing NFTs to delegate rights, Liquid Delegates have added the ability to trade those rights, claim airdrops, access token-gated communities, and more, all without transferring ownership of the underlying asset.
Projects can use this feature for a variety of purposes, but we’ve generally seen it integrated so that people can safely mint or claim tokens in their vault wallets.
7. Non-Fungible Vaults (NFVs)
Developed by Open Dollar, Non-Fungible Safes (NFVs) link collateralized debt positions (CDPs) to transferable NFTs instead of protocol accounts.
This primitive makes ownership of stablecoin loan positions liquid and transferable, improving capital efficiency and flexibility.
In other words? NFVs pave the way for the first secondary lending markets in DeFi and can be integrated into DeFi in new ways thanks to the existence of NFTs.
8. Net Listings
One of the latest NFT primitives is Flayer Net Listingswhich allows rarer non-floor NFTs to be deposited into collection pools in exchange for “Floor Tokens”.
These tokens, for example ƒMILADY, represent the minimum value of the NFT and can be sold to provide immediate liquidity, with the remaining listing value realized in the final sale of the NFT.
Notably, this primitive uses Harberger fees to ensure fair pricing, making it easier to sell NFTs off the floor and access liquidity quickly and smoothly.