Problem Statement
Last updated
Last updated
The concept of owning digital assets took the world by storm in late 2017, when Cryptokitties collapsed Ethereum. This event triggered widespread experimentation about the opportunities for on-chain digital ownership.
However, lack of blockchain scalability failed to meet industry requirements to propel its mainstream adoption (*). As an example of poor throughput's consequences, Ethereum consumed nearly $1Bn in gas fees during 2022 in NFT minting alone, leaving room only for use cases based on extreme scarcity, premium selling prices, and purchasers speculating on the possibility of reselling the same item for a greater profit.
The 2023 NFT bubble burst prompted builders to explore scaling solutions like Layer-2s and new Layer-1s to enable utility over speculation. However, these solutions have downsides, such as the hassle for users to bridge currencies, the need for centralized components like Data Availability Committees, or proof generating parties, or the migration to less mature, often non-EVM compatible ecosystems.
Besides scaling and cross-chain connectivity, other important aspects keep preventing mainstream adoption, including the need for users to acquire crypto and execute TXs themselves, lack of incentives for DApps to push asset interoperability, and risks related to legislation compliance.
Centralization further impacts bridges, often targeted by hacks, and NFT metadata storage. When assets are mutable, their attributes are typically stored on private company servers, preventing users from querying a decentralized system about what they own. Legislation is catching up, potentially deeming .
