What can I do with an NFT?
There is more to an NFT than just buying and selling.
Whether an NFT is part of a crypto=game or an art collection NFTs can be used to create an experience. An NFT can also be burned, and in certain cases where the NFT was backed with crypto then this burning can be used to deliver value!
As more and more uses of NFTs are being invented there will always be these three basic uses we should be familiar with: I call them the three delicious B’s: backing, blending and burning.
Backing an NFT with Crypto
An NFT can be a container for crypto currency and on the WAX™ blockchain we refer to such an NFT as being WAX-backed.
Simply put what backing means is the NFT becomes a piggy bank, but instead of physical coins you back the NFT with fungible-tokens (or crypto currency). Like a glass piggy-bank the only way to get the fungible tokens (FTs) back out is to smash the piggy bank open–aka burning (more on burning to come).
As long as that NFT remains unburned the fungible tokens stay safely contained inside the NFT, which then becomes what is called a cNFT, or container-NFT.
If you sell or trade the cNFT that fungible token stays safely backed as ownership changes, so a WAX-backed NFT in your wallet is as good as WAX safely locked in your piggy-bank!
It is important to realize that a cNFT has real value but since the value is locked it has no liquidity. Everyone on the blockchain has different strategies and thoughts, some people need liquidity and some people are looking for long term value.
What are you after?
Backing an NFT with WAX is as simple as a few clicks, as you can see with this live clip from twitch.tv/jakegarnphoto locking $750 in value onto an Inglorious Blend Reward for Collectors.
Trading WAX-backed NFTs
WAX-backed trades are a technique savvy traders use to buy and sell NFTs. This is because a WAX-backed NFT not only retains the WAX backed to it in a trade but the amount of WAX backed is also clearly visible to others!
The value backed to the NFT is visible to traders, so wax-backing becomes an easy way to trade NFTs for WAX, when you are not allowed to send crypto for an NFT trade.
The idea is take an NFT with little value, and back it with crypto.
Then with that wax-backed NFT offer a trade on a dAPP like AtomicHub where both parties can see the NFTs (and WAX backing) before accepting a trade.
Be careful though, nefarious traders have been known to photoshop a screen shot of a WAX backing onto the trade… this is rare, but thorough inspection is necessary!
On AtomicHub look for the secure lock symbol next to “Backed Tokens” in the NFT attributes to ensure the backing is legitimate.
*This saves the seller paying market fees that are normally charged for sales on the open market, and while these savings can be passed onto the buyer you are also not paying the original creator a royalty for the sale. So this sort of trading isn’t encouraged if you are the type that enjoys supporting creators of original works!
Blending an NFT
Think of blending an NFT like blending a smoothie.
The best smoothies start with amazing ingredients like fresh fruit, sorbet, yogurt and maybe vitamins!
After you put all the ingredients into a blender, if all goes well, you end up with something better than you started! Yet, in the process, all the amazing ingredients you started with are destroyed.
For our collection I laid out my plan in the white paper and took the idea of backing an NFT beyond trading and used the feature of NFTs to add tangible value to our collection by loading our blender with a chance at WAX-backed cNFT.
You start with some amazing ingredients, like a Common, an Uncommon and a Rare from our Chameleons collection and you blend that into an exclusive, limited edition reward in three pre-minted rarities. The best of which are backed with WAX!
Trading in some delicious ingredients for something more delicious!
Why Should I Blend?
Creators get to decide how their recipes and results work and owners of the NFTs get to decide whether the blend is worthwhile.
For the Shoot for Love™ NFT collection we pre-minted limited edition packs as rewards, these packs contain an exclusive limited edition NFT and a chance at a rarity backed with WAX.
Blending provides a rewarding opportunity to engage with collectors and create an experience with the collection beyond just HODLing
Our first blend event was live-streamed and a lot of fun!
Why Burn an NFT?
*Disclaimer–Do NOT burn an NFT unless you do NOT want it anymore because burning an NFT forever destroys the NFT! However, there are situations where burning an NFT can work to your advantage.
Sometimes collectors burn excess NFTs they don’t want, other times burning an NFT can release value if the NFT is backed with WAX, still other times folks burn an NFT as their own flavor of performance art or to help increase the rarity of a collection!
Whatever the reason, as the owner of the NFT you can choose to burn it!
Burned NFTs Are Still Recorded on The Blockchain
You can see the mint number is clearly displayed inside the NFT data. There is also as a number with a fire icon next to it, this is the number of people that have owned and burnt this NFT!
Although the destruction of art is never encouraged, burning increases the rarity of the remaining NFTs… and in the case of an NFT backed with WAX the temptation to release that liquidity when WAX is soaring will always be real!