Speaking at the 14th World Blockchain Summit MARVELS, the Chairman of BigONE Exchange Anndy Lian said that key to success for NFT startups was a supportive community and a compelling user case. As a guest speaker at the event on February 22, under the theme of ‘NFT META Korea 2022’, Lian agreed that the global market for NFTs was very active currently but wanted to share his thoughts on how NFT projects can be successful in the longer run. One key factor that should be with a team from the outset is to ensure the NFT has utility, which is closely tied to the importance of community.
Lian illustrated the importance of getting this relationship between the NFT and its community, between creators and fans, with the example of starting a NFT around a well-known soccer player. While on paper the fans of a soccer player appear to be automatically part of the NFT community you are building, that isn’t necessarily the case. What was needed was a strong bond to be created between the fans and the soccer star and the platform for it to work. This was related to the importance of ensuring that when you see a new project in the NFT space you should as an investor consider whether it has utility. Lian added that for NFT creators it was important to be transparent about their offering to investors, not only to better convey its value, but also to ensure that when regulators start to enter the space in 2022 the quality of the NFT industry stands up to scrutiny.
With so much money, energy and creativity going to NFTs its clearly going to throw up some significant issues, and mistakes will be made. Just recently there was a legal battle over CryptoPunks, sparked by an issue with the original version of the code. The makers Larva labs attempted to ban the faulty V1 version, which had been replaced due to faulty programming code, and had the NFTs removed from OpenSea. While LooksRare, the rival to Opensea, was recently reported as experiencing significant wash trading.
But perhaps more worrying was the recent Wormhole bridge attack, when hackers managed to steal more than $320m from the bridge which connects the Ethereum blockchains. A ‘bridge’ is a protocol which allows crypto and NFT holders to move their assets across different blockchains. Wormhole’s bi-directional NFT highway provided a portal between Solana and Ethereum was only launched a few months ago, was designed to connect both communities and enable them to trade each other’s assets with ease. As reported in CNBC, analysis shows a hacker exploited a vulnerability on the Solana side of the bridge to create 120,000 so-called ‘wrapped’ Ethereum tokens for themselves. It appears that they then used these tokens to claim ETH that was held on the Ethereum side of the bridge.
This is indeed troubling on several fronts, not least because these bridge vulnerabilities have long been known about. Indeed, no less a figure in the crypto world than the inventor of Ethereum, Vitalik Buterin, posted early this year that so-called cross-chain devices such as bridges had “fundamental security limits”. The first reason is down to the fact that if a native blockchain suffers a 51% attack, which reverses a cross-bridge transaction (involving a transaction to another blockchain) then the asset could be left stranded in the non-native blockchain. Moreover, this vulnerability could potentially mean a successful 51% attack could threaten an entire crypto ecosystem. Clearly, the issue is as these handy bridges grow in volume, with the growth in DeFi and NFTs, that these issues will only increase. “Your data layer must be your security layer,” summarized Buterin in a tweet thread accompanying the Reddit post.
One neat solution to the threat posed by bridging hacks to NFT transactions was unveiled on February 18 by Ethereum-based platform Harmony, with a Bored Ape Yacht Club Passport. This allows users to import their NFT into play-to-earn game DeFi Kingdoms, which is also built on Harmony and boasts over 120,000 monthly active users. VP of Engineering at Harmony, Leo Chen, explained in a post in late 2021 that the wider importance of this new cross-chain bridge, as part of the Horizon bridge: “It is an important step of the cross-chain infrastructure provided by Harmony to enable a multi-chain ecosystem and one step closer to the upcoming metaverse. The multi-chain world and the metaverse require inter-connected blockchains, not just the fungible tokens, but also non-fungible tokens.” The advantage is that the bridge does not move assets, but rather establishes asset ownership. The second advantage is that it enables artists and creators, put off from participating due to high gas fees, to mint and collect NFTs as a result. A third benefit is that it allows creators to try out their art on Harmony first, and then when demand increase, to bridge to multiple blockchains.
Anndy Lian commented: “I welcome innovatory solutions to NFT cross-chain transactions such as that provided by Harmony, which not simply a safer solution, but which allows creators to get involved in the space without undue costs. It backs up my thesis that NFT projects need to be as transparent as possible when creating their offerings and grow a viable community as they progress.” The market in NFTs boomed in 2021, with total sales globally totaling $25 billion, up from just $94.9 million the year before, according to DappRadar. “Not surprisingly social media is awash with tales of get rich quick NFT success, from CryptoPunks to Bored Apes, and everything in between, but the fascination with digital art is going to change in 2022, with more use cases around utility. At its core of course NFTs are a great way for creators and artists to contact directly with their fans, with their community. And that’s probably the most compelling use case to date that’s going to sustain the growth of NFTs into the future,” Lian added.
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.