How RMRK is changing the game for NFTs

You might have heard the acronym ‘NFT’, and perhaps you even know it stands for ‘non-fungible token’. You might have heard that NFTs represent digital art, or digital collectibles, or something similar. You might have seen the eye-watering prices certain NFTs have been selling for, and wondered what could possibly justify them. What you might not know is that the collectible images you’re hearing about on the news (or reading about in Rolling Stone) are not the cutting edge in NFTs.

But let’s back up a moment. What does it mean for something to be non-fungible, and why should we care? Like other cryptocurrencies or tokens, an NFT is a digital asset that exists on a blockchain, meaning anyone can verify your ownership of it.

Cryptocurrency is valuable because it can be traded or spent. If you and I both have 1 RMRK token for instance, the value of each is identical and our two tokens can be freely interchanged. We can both trade or spend our tokens at the same rate at any given moment. The same holds for any currency; my $20 bill is changeable - or fungible - for your $20 bill or any of the other 11.7 billion $20 bills in circulation.

If a token is non-fungible, all it means is that it can’t be interchanged freely with other similar tokens that are in circulation. Lots of items in the real world are non-fungible- we might both have a cat for instance, but I doubt you’d accept that mine and yours were freely interchangeable. It has unique value to you that makes it one of a kind. Blockchains assign to NFTs a unique value too, and provide evidence of their uniqueness and their ownership.

Now that’s out of the way, we can get back to talking about cats. CryptoKitties was a major early NFT project on the Ethereum blockchain that gave players the chance to buy, sell and breed virtual cats. The attributes and transactions related to the cats were stored on the Ethereum blockchain, meaning players' cat tokens were provably rare with transparent and perpetual ownership, even if the studio that created them went under.

CryptoKitties was a sudden and major success upon release in 2017, so much so that related transactions accounted for 10% of activity on the Ethereum network in the days following its launch. But a major problem quickly became apparent- all of this frenetic cat trading and breeding was happening on a network that was not designed for it.

In the early days of the project, CryptoKitties made up 11% of all transactions and the number of queued transactions skyrocketed. This meant that anybody trying to interact with or send their CryptoKitties was stuck in a long tailback of transactions along with everybody else trying to use the network.

With the majority of NFTs today created on Ethereum, these limitations have had a major influence on NFT development more generally- or the lack of development. Most NFTs created today are static images, with the only functionality being the ability to buy and sell them. Doing anything else would be expensive for a user, who pays gas prices - essentially a service charge - on every transaction. How can we have more complex operations for our NFTs if all interactions are taxed in this way and the boundaries are so rigidly set?

The solution is a different blockchain- Kusama. There are some technical and non-technical differences between Kusama and Ethereum that make it ideal for NFTs, the main one being the multi-chain nature of Kusama. On Kusama, application-specific side-chains mean that your favourite NFT project isn’t competing against every other transaction for network capacity. This means that frequent interactions with your NFT become economically viable for you and won’t take hours to execute.

Now we come to RMRK. In simple terms, RMRK is a set of specifications on the Kusama chain that can be used flexibly to build an NFT collection. Different specifications can be used to make a collection of NFTs as complex or simple as the designer wants. The best way to explain these different specifications is with an example.

Imagine having a character in an online video game as an NFT, which you could buy and sell. Not that exciting? With RMRK, NFTs can own other NFTs, so you could buy weapons, clothes, or other items for your characters, equipping the ones you want and storing or selling those you don’t. The specification allows for arbitrary complexity - your character could have an NFT bow owning NFT arrows, for instance.

RMRK also allows for conditional rendering, based around sending emotes to NFTs. This is a great tool for discovering popular NFTs, but in our example it could be used to influence some visual change in your NFT - displaying a different look for your character based on the emotes it receives in a given time period.

NFTs can also be multi-resource - it no longer has to be a single format or file, it can be represented in different ways. You could have a 3D model of your character, an image, and a profile avatar all in one - and you can always add more resources to it. This means that your NFT character can be useful far beyond the original project it was designed for.

Through all this cool functionality, RMRK solves some of the core problems with NFTs on Ethereum. The mechanics of the Kusama blockchain means that the chance of congesting the network as you try and do something with your NFT is far lower, as you’re not in direct competition with completely unrelated transactions. The problem of high transaction fees is also greatly reduced- while users do pay a fee for interactions with their RMRK NFT, this is typically far smaller than gas prices on Ethereum - we’re talking single-digit cents rather than dollars - and a user can batch together interactions with a single transaction fee.

RMRK recently combined all of this functionality into a project called Kanaria. Users purchased egg NFTs and sent emotes to them, which influenced the appearance of the birds when they hatched, imbibing the collection of 9999 birds with a diverse range of visual characteristics of different rarity and value. Each NFT owns multiple other NFTs- different parts of each bird, and different accessories, which users can unequip, sell, and replace with other accessories. Birds can also own gems, which are non transferable NFTs giving some advantage for its owner. All of this functionality together transforms ownership of an NFT (or multiple NFTs) into a rich experience rather than a passive one.

RMRK is still in development with new functionality coming, including the ability for a group of users to govern NFTs as DAOs (a decentralised autonomous organisation), with users able to vote on equipped NFTs, which resource to display, and more. A metaverse is also planned for 2022, and technical work is underway to bring RMRK to the wider crypto ecosystem via other chains. These developments, combined with the existing system of specifications for building rich, functional, eternally-useful NFTs means that everybody from NFT enthusiasts to the casual observer should be taking note.