Understanding NFTs

What is NFT 2.0?

NFT 2.0 refers to any NFT that goes beyond what NFT 1.0 can do. All that NFT 1.0 can do is sit on the blockchain and be appreciated by collectors. In the beginning, this was enough to ignite the inferno of NFT adoption. But this is just the surface. NFTs can do a lot more than sit on the chain. To see just how much, let’s consider the characteristics of NFT 2.0.

Characteristics of NFT 2.0

Extensibility — For an NFT to be regarded as a 2.0 variant, it needs to be extensible, meaning it needs to be able to connect to other NFTs or projects in a meaningful/useful way. Thus,
An NFT can be linked to another NFT,
An NFT can ‘hold’ fungible tokens
An NFT can be linked to any other arbitrary data set
There are no limits to the layers of ownership, meaning that there can be as many nested layers as the creator wishes. An example is below. Kindly note that ‘>’ means ‘owns’.
NFT 1 > NFT 2 > NFT 3 > … NFT 50 > NFT 51 > … NFT 100 > ad infinitum
Don’t worry if this doesn’t make sense now, when we get to the abilities of NFT 2.0, it will acquire greater context.
Upgradability — This feature ensures that an NFT can be updated far into the future. The updates can be to the artwork, select metadata, the addition of new resources (will make sense in the abilities section), etc.
Dynamism — This feature equips the NFTs with powers to do more than existing. Now they can issue commands, equip other NFTs, change their look, and a lot more, as determined by the builder or owner.
Put these three characteristics together and you have NFTs that are far beyond anything you have experienced so far. To help you understand better, let’s explore the most advanced implementation of NFT 2.0 tech in the world.

abilities of NFT2.0.png

Abilities of NFT 2.0 as powered by RMRK

Binding together all three characteristics,
has built the most advanced NFT protocol in the world. The NFTs in the RMRKverse possess 4 distinct abilities.

1. Nested NFTs

With the nesting ability, NFTs can own and be owned by other NFTs. Although this concept is ridiculously simple on the surface, you will be blown away by the new possibilities it affords creators (of art and technology). With RMRK’s nesting, the chain of ownership can go on forever, such that an NFT can own other NFTs, who own other NFTs, that own other NFTs, on and on until infinity. This has applications in gaming, art, metaverse, exhibition, and much more.

2. Multi-resource NFTs

NFTs no longer have to be doomed to a singular fate for eternity. Now, NFTs can have different resources to switch between. A resource is simply the image, video, or other media that is the NFT. Thus, instead of having one picture, an NFT can have 2, and the holder can choose which one to display. But this isn’t the only application of this ability. A book NFT can have 3 resources of differing formats — a pdf, an audiobook, and a jpeg cover. Each of these resources can be set to load only when the user is interacting with the NFT on the relevant platform. Thus, if viewing from a book reader, you see the pdf; from an audio player, you listen to the audiobook; and on a marketplace, you see the jpeg cover.

3. Reactive NFTs

Reactive NFTs are made possible by conditional rendering. This means that an NFT changes its resource based on certain criteria being met. For example, an NFT of a landscape alternates between 2 resources (nighttime and daytime variants) based on the time of day. When it is night, the NFT shows the nighttime variant, and when it is daytime, the NFT switches to the daytime variant. For this to work, it means that the NFT must have 2 resources (pictures in this instance) and the condition for prioritizing one over the other.


With this ability, an NFT can be fractionalized into a DAO. Some NFTs are too expensive for one collector to afford, and so by using the DAO functionality, many collectors can put their money together to get the NFT. Once done, that NFT will have tokens attached to it, shared amongst the collectors according to the weight of their investment. Thus, when it’s time to make decisions, the collectors can all vote with their tokens on what to do with the NFT. Again, this is an idea that has many applications beyond its primary description.

5. NFTs with Emojis

With RMRK, NFTs can receive emojis (🤙🏾❤️😂) on-chain. This can be used for price discovery, game mechanics, and whatever else the mind can imagine.

NFT 2.0 in glorious action — Kanaria

A Kanaria bird and its nested NFTs (items + gems)
Kanaria is an NFT project built by the RMRK team as a proof of concept for RMRK functionality. They began as a set of 9,999 eggs of varying rarity that were available for claiming for two months. Upon the expiration of this claiming period, unclaimed eggs were burnt in the , and claimed eggs were .
Now, the really fascinating thing about the hatching process was that the look of the birds that hatched was influenced by the emotes that were sent to the egg on-chain. This means that if an egg got an overwhelming amount of 🧟‍♂️, it hatched into a zombie-type bird. This was the first instance of conditional rendering ever executed on-chain.
Each bird owns various items and gems. The items are nested NFTs that belong to the bird. Bird holders can choose to equip or unequip any item they choose. They can also choose to sell the items. Already, some legendary items have been sold by their owners. A natural consequence of this setup is that bird holders can customize their birds however they wish.
The gems, on the other hand, but are non-transferable. Thus, no bird holder can sell a gem without selling the bird. Some gems give discounts, others a portion of revenue, and others waive certain fees.
You can explore Kanaria for yourself


Other possible applications of NFT 2.0

1. Robust NFT Storage

Using the multi-resource functionality, an NFT’s storage can be made more robust. , most NFTs are stored on IPFS. Meaning that the NFT has a link to the resources which are hosted on IPFS. But the thing about IPFS is that, unless your content is constantly being interacted with, you have to pay to pin your content to nodes (another way of saying you incentivize storage providers to host your files for x amount of time).
Using the RMRK protocol, you can add other resources to the NFT (which are just duplicates of the same NFT). These new resources, rather than be pinned to IPFS, will use another service (Crust, Arweave, etc.), thus further decentralizing the storage of the NFT and ensuring its future availability with greater redundancy.

2. Music Label DAO

The way most modern music is made today is by a collaborative effort from creators all around the world, who often turn on each other once the money & ‘middle men’ come in. Using RMRK-flavored NFT 2.0, a record label DAO can create a whole new way of working together that doesn’t devolve into bickering and severe exploitation.
Imagine a record label DAO made of music talent and enthusiasts, split into groups based on which creative process they’re part of (sampler, drummer, songwriter, artist, mix engineer, graphic designer, etc). Sample producers would create samples (melodies), drum producers would add drums, songwriters would make a demo, artists would record, and so on until the song is finished. A decentralized NFT single can be created by letting the DAO vote on which addition to the single is fire or trash. Based on total votes, the most fire additions will make the song. In this way, a decentralized NFT album can be made one song at a time. This has the benefit of having royalties baked into the core protocol.
(This idea was originally submitted to the by Peter.Mahne95).

3. Dog Rescue NFTs

Dog Rescue NFTs are NFTs representing a pup in a shelter you cannot physically adopt, but can take care of remotely — at least financially, until adopted. Even in kill shelters, a pup who’s been bought as an NFT is basically having its “rent” paid by the owner, who will also continuously pay “tax” on the NFT covering medical costs and food, and in return get progress photos as additional resources on this NFT. This pup NFT can evolve until adopted, at which point your “mission” as the NFT owner is complete, and you add a saved pup to your collection of digital pets, while the real counterpart is hopefully in a new loving home.
(This idea was originally submitted to the by BtcMacroecon).


Despite covering 3 possible applications, we haven’t even scratched the surface of what is possible with NFT 2.0. Recall that we said that each ability was a lego that can be combined with the others to build entirely new projects across any industry. Thus, when it comes to innovation and implementation of NFT 2.0, the only limit is your imagination.
What will you build with this new powerful tool?
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