Cudos, the decentralized cloud computing network, will be the first running nonfungible tokens (NFTs) on Cosmos natively. Beyond being an important development for the company, this has broader significance across the whole blockchain ecosystem.
What’s the news?
Cudos will be the first network supporting NFTs natively on a Cosmos chain. This means that it’ll be recognized on the protocol level as a primitive on the network.
Essentially, users won’t need to set up a new smart contract for each new NFT. They’d be able to mint, approve, transfer and burn directly on their accounts. Consequently, all of these transactions will be much cheaper, as they won’t need to run on the Wasm VM.
This would allow Cudos to easily integrate transactions into the Gravity Bridge for asset migration to other chains such as Ethereum. The decentralized cloud network intends to open-source all the code so that other Cosmos chains can also benefit in the future.
Why is this exciting?
There are several advantages to this approach and why this is huge news for the industry.
- Cost-efficiency: NFT minting and transfers will be far more affordable. Typically, these can get quite pricey, especially with Ethereum at an all-time high and during periods of market volatility. Moreover, this would benefit the artist community that may not have the speculative cash to spend on this.
- Sustainability: Cudos will offer environmentally friendly minting, thanks to being a carbon-neutral, soon-to-become carbon-negative network.
- Adaptability: The code will be easy to implement from the developer side, allowing easy integration with marketplaces and other custom smart contracts.
- Safety: The risk of malicious smart contracts that could drain users’ accounts is substantially lowered because they are built natively on the network.
- Transferability: Cudos’ built, with bridging in mind, would allow easy transfer of assets to Ethereum for access to unique markets.
“The Cudos network has been designed from the ground-up to support NFTs (or more simply – unique digital assets) natively. This means that any account can mint, own, or transfer an NFT without having to deploy a new smart contract every time and spend a ton on gas. This dramatically reduces operational cost and allows the network to integrate NFT bridges with other chains like Ethereum easily,” commented Ethan Illingworth, blockchain product manager at Cudos.
NFT is short for a nonfungible token, which means that it’s unique. Both fiat and digital currencies, as well as other crypto tokens, are fungible. You can trade or exchange one for another and they will represent the same thing carrying the same bartering power. An NFT, on the other hand, is one-of-a-kind.
Anything digital can be “NFT-ized,” a drawing, a song, or a piece of code can become digital art in the form of an NFT.
How big is it?
According to an EY report, the total market cap of NFTs stood at $338 million with a 187% compounded annual growth rate in the period 2018-2020. Interestingly enough, the most expensive piece of digital art was sold on March 11, 2021, for 4,200 Ether (ETH) which, at the time of the transaction, was equivalent to $7.57 million.
According to Reuters, the market truly exploded in 2021 with approximately a billion dollars in revenue in Q1 and Q2 and over $10.7 billion in Q3. This is more than a 3,000% increase over the entire volume of 2020, and the year is not over yet.
What are the benefits of NFTs?
Artists may be interested in NFTs to create a new market for specific types of work and benefit from royalties-like features. Buyers show financial support by purchasing NFTs and enjoy additional privileges like posting the image online or using it as a profile picture. Finally, collectors can use NFTs like any other speculative asset – as a form of investment.
“We’re already working with NFT marketplaces and metaverses building on our Cudos network. Moreover, we give people the opportunity to try all this on our incentivised testnet, Project Artemis. Essentially, with this move, we plan to accelerate the adoption of NFTs in the Cosmos ecosystem. Ultimately, the most exciting thing is that with our mainnet launch in January 2022, we’ll be able to merge NFTs and decentralised cloud computing,” concluded Matt Hawkins, founder and CEO of Cudos.
The Cudos Network is a layer-one blockchain and layer-two computation and oracle network designed to ensure decentralized permissionless access to high-performance computing at scale and enables scaling of computing resources to 100,000’s of nodes. Once bridged onto Ethereum, Algorand, Polkadot and Cosmos, Cudos will enable scalable compute and layer-two oracles on all of the bridged blockchains.
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