Offline NFTs
Autonomous NFTs or aNFTs are a type of non-fungible token that is programmed to perform certain functions on its own (such as initiating transactions, distributing revenue, or creating other tokens).. These functions are typically built into aNFTs using smart contracts, allowing the tokens to perform actions autonomously without the need for human intervention.
Key features of aNFT
Trading: aNFTs are able to interact with wallets and applications. For example, an aNFT can be programmed so that the token sells itself when certain conditions are met.
Collateral: aNFT can be used as collateral for loans on DeFi platforms.
Real-world asset tokenization: aNFTs could offer automatic payouts when certain conditions are met in the real world. aNFTs may be tied to real objects or obligations. For example, aNFTs can represent a stake in a business. Then the token holder will be able to receive payments programmed by the smart contract.
Voting: aNFTs are capable of being used to represent voting rights in a company or decentralized autonomous organization (DAO). The holder of a token can program it to vote in a certain way, for example by repeating the decisions of another voter.
Advertising: Stand-alone NFTs can be programmed to display advertising, sponsorships or promotions. For example, when a digital artist creates a standalone NFT with the logo or product of the advertised brand. Moreover, advertising can change as new contracts are concluded.
Subscriptions: Offline NFTs can be used to provide access to exclusive content or services.
Royalty payments and profit redistribution: the good thing about aNFTs that generate income is that you can specify in their code how this income will be distributed. For example, the owner or author of a tokenized song using aNFT is able to determine that a portion of the proceeds will be donated to charity or to a third party.
This is not an exhaustive list. The functionality of aNFT, like the functionality of smart contracts in principle, is limited only by the imagination, talent and abilities of the developer on the one hand, as well as by the capabilities of the programming language and the virtual machine on which the smart contract will be deployed, on the other.
Main areas of application of aNFT
Despite the fact that the application of aNFT can be very different (like the function, it is limited only by the developer’s imagination and technical capabilities), the main potential of autonomous tokens is seen in the following areas.
Real estate and property rights
Autonomous NFTs can be used to create self-executing contracts in real estate and property. A smart contract is able to ensure that all participating parties receive automatic payments based on predefined conditions. This simplifies the buying and selling process, removes unnecessary intermediaries and reduces transaction costs. aNFTs can provide flexible and customizable asset titles. In this scheme, the NFT acts as a certificate of right (for example, ownership or lease), and the smart contract specifies the terms of transactions. For example, aNFTs could be used to represent fractional ownership of real estate assets, which would allow safe entry into the market even with a small portfolio.
Decentralized finance
Standalone NFTs could easily be integrated into DeFi, which could create new financial instruments and investment opportunities.. Thanks to smart contracts, NFTs are able to autonomously transact, generate income, and perform many other functions.
Art
Offline NFTs can be used to create programmable digital art, allowing artists to add interactive features to their creations. For example, an NFT is programmed to change appearance over time, respond to changes in ownership, or reveal hidden content under certain conditions. Yes, standalone NFT proponents are talking about the emergence of new genres and forms of digital art that will go beyond procedurally generated punks or monkeys. And of course, aNFTs can provide new ways for artists to monetize their work.
Music and video content
Offline NFTs are convenient to use to optimize fees and royalties. For example, an artist could create an aNFT that represents ownership of a song, programmed to automatically distribute revenue whenever the work is streamed or downloaded. In theory, this could eliminate middlemen and lead to market democratization.
In principle, these same mechanisms can work in the field of video content, for example, online courses.
Games and multiverses
aNFT can be used to create self-executing and customizable in-game assets such as items, environments, and Non-Player Characters (NPCs). Let's say an NFT is an item in a video game that a player can obtain. For example, an artifact, weapon or armor. The functionality of standalone NFTs will allow developers to program these items with certain attributes, such as damage or defense points, and specify special abilities, behavior or interaction with the game world.
Another example is that aNFT-based NPCs will be able to offer gamers a more interactive experience through dynamic storylines, different difficulty levels, and so on. Or standalone NFTs could be used to create cross-game compatibility, allowing users to use an NFT across multiple games and platforms simultaneously. In the context of tokenization and microtransactions, which play a big role in the modern gaming industry, aNFT solutions may be of interest to game developers who do not want to bother with publishers.
How standalone NFTs are created
To create an NFT, it is no longer enough to simply draw a picture and crumple it on the platform. Developing such a token requires some technical knowledge in the field of writing smart contracts. But the potential benefits are worth it. Firstly, you can turn to specialists (there are already separate proposals), and secondly, if aNFTs gain popularity, large platforms will probably soon begin to offer ready-made solutions for autonomizing tokens for pennies or for free.
Developing standalone NFTs isn't prohibitively difficult. The creation process consists of the following steps:
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Formulation of the problem. Determine what aNFT will do. For example, a token must trigger a specific action when buying or selling, or generate new tokens.
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Platform selection. After determining the functionality, you need to select a blockchain platform. Ethereum is the most popular platform for NFTs, but other platforms such as Binance Smart Chain and Solana may also be interesting.
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Writing smart contract code. The coding stage is the most critical. We need to teach the smart contract to perform the tasks that are expected from this particular autonomous NFT. The most suitable programming languages for this are Solidity and Vyper.
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Smart contract test. Before deploying to the blockchain, the smart contract should be thoroughly tested to ensure it behaves as expected.. There are several testing frameworks for this, such as Truffle, Waffle, Chai. Tests can be either automated or manual.
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Deployment of a smart contract: after all bugs are overcome and the smart contract passes tests, it is deployed on the blockchain.
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Mining an offline NFT: After deploying a smart contract, you can finally generate an offline NFT. A wallet that supports NFTs, such as Metamask, is suitable for this.
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Interaction with NFTs. The last stage is actually the autonomous operation of aNFT, when the token acts independently, according to its program.
How new is the idea?
Publications about aNFTs began to appear not so long ago, but the idea of linking NFTs and smart contracts is by no means new. NFTs are most common in the Ethereum ecosystem, where smart contracts thrive. And of course, unification in one form or another did not take long to arrive.
For example, back in 2021, a digital work called Everydays: the First 5000 Days was sold at auction for almost $70 million. The auction was conducted through an NFT smart contract on Ethereum. Once the auction was completed, ownership of the NFT was automatically transferred to the buyer's digital wallet according to the rules defined by the smart contract.
And yet, aNFTs are starting to be talked about and written about again in 2024. Perhaps this is some kind of paradigm shift that has been a long time coming. Conventional NFTs have long since lost popularity; it’s time for them to acquire more practical meaning, not remaining just a virtual certificate of ownership of a digital object.. It stopped being interesting as soon as the hype around collectible NFTs died down.
An unobvious advantage in combining smart contracts and NFTs may be a higher threshold for entry into the market, eliminating at least some of the seekers of easy profit, whose dominance in many ways led the market of traditional non-fungible tokens to decline.
Conclusion
aNFT is a type of non-fungible token with self-execution capabilities programmed by a smart contract. Such NFTs can perform actions autonomously, such as receiving and redistributing income or creating other tokens. Unlike regular NFTs, standalone ones can independently interact with the blockchain and other smart contracts, opening up scope for adoption. Perhaps now the NFT market will move into a “more mature” phase of development, becoming capable of offering interesting technical solutions.