How do NFTs work?
Ev Tchebotarev avatar
Written by Ev Tchebotarev
Updated over a week ago

A smart contract is a piece of code, usually written in solidity, a language that's native to the Ethereum blockchain. Every smart contract is a batch of code, usually with file names like...



Initializable.sol, and etc.

Most of these are open-source code, often provided by Open Zeppelin — in fact, many if not all platforms use Open Zeppelin or alternatives as a base for their own code.

A smart contract is the sum of all these code snippets. The more code you deploy on a blockchain, the more gas fees you pay. So to make contracts more effective, all platforms store core logic separately.

This is important, because this is how a platform can change the royalty fee or other core features that creators depend on, all without the express permission of a creator. Knowing which parts are "centralized" and which are baked into your part as a creator is critical.

We can visualize an NFT as having three parts:

  1. Storage (usually IPFS)

  2. Creator contract

  3. Platform logic

Some of the biggest platforms use centralized storage and content delivery networks (CDN), so it's easy for them to ban/remove accounts. It is crucial to only pick platforms that give you the "keys" to keep your NFTs safe.

So when you mint on Sloika, you will see an IPFS link to your NFTs. Safe this link. You can get a free IPFS-provider account (like Pinata) or IPFS desktop app and “pin” that link. Your computer will act as a server to deliver your content.

Decentralized storage needs to be paid for by platforms, so if the platform/marketplace goes out of business, your NFTs will eventually be broken. You need to have the control over survivability of your NFTs, and pinning an IPFS link is a key to that.

Lastly, all platforms decouple the creator contract from the platform logic, but none of them talk about that. You need to know which parts are local and which are global (ie royalty fee for many platforms is a global switch, so a platform can squeeze creators for profit anytime).

Understanding these aspects and asking under-the-hood questions will help creators to really hold the power over platforms in a meaningful way.

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