What Is an Executable NFT (xNFT)?
NFTs are tokens with unique metadata stored on a blockchain, which represent ownership of a digital asset. xNFTs are explained as combining NFTs with applications in one asset.
By definition, xNFTs contain executable tokenized code that can run applications directly without requiring any third-party software to access and use their assets. Rather than static images or documents, xNFTs are interactive programs.
How Do xNFTs Work?
xNFTs are minted or created on the Solana blockchain as SPL tokens, which are equivalent to the ERC-20 standard for tokens on the Ethereum blockchain. But while SPL tokens can be traded, transferred, or stored in any compatible wallet or platform, the executable code in an xNFT is stored in Solana’s program store with an associated ID.
When a user opens an xNFT, the program ID is retrieved from the blockchain, and the code is executed inside a browser sandbox, which is an isolated online environment that prevents the spread of malicious code.
As xNFTs are built using the React programming language, the React xNFT framework that Coral has created allows the sandbox to communicate with the host environment securely.
How Are xNFTs Different From NFTs?
The first generation of NFTs are unique, tradable tokens that represent unique digital assets and provide a way to verify ownership via an immutable smart contract. The xNFT standard takes the capabilities of NFTs further by adding code to the asset, allowing Web3 protocols and applications to run inside a digital wallet.
The primary difference between NFT and xNFTs is that the ability to execute code inside the token means that xNFTs can function as protocols or applications that can interact with users, other xNFTs, or external data.
For instance, to stake a traditional NFT, a user must connect their digital wallet to a third-party website, which can pose a security risk. But an xNFT can be staked from within the Backpack wallet, which is a new Solana-based crypto wallet and operating system that Coral built to handle xNFTs and the decentralized applications (dApps) they contain.
Any dApp built on the Solana blockchain using the xNFT standard can create an xNFT and execute inside Backpack. Backpack manages a user’s private wallet keys and allows them to access dApps, similar to the way an app store provides access to apps for mobile devices.
So far, xNFTs only run on the Solana blockchain, using the React xNFT framework. NFTs on other blockchains use other standards, such as ERC-721 or ERC-1155 on Ethereum.
NFTs vs xNFTs: A Summary of Similarities and Differences
|Definition||Unique digital assets||Programmable and interactive digital assets|
|Core Function||Prove ownership and authenticity||Perform specific functions and interactions|
|Blockchain||Built on blockchain technology||Built on blockchain technology|
|Interoperability||Can be transferred or traded between compatible blockchain platforms||May require specific smart contract platforms or protocols to execute the embedded code|
|Scarcity||Limited supply, unique traits||Limited supply, unique traits|
|Value||Value determined by market demand||Value determined by market demand|
|Programmability||Non-programmable, static assets||Programmable, dynamic assets with code execution capabilities|
|Interactivity||Limited or no interactivity||Interactive and responsive to user inputs|
|Functions||Cannot perform functions||Can perform specific functions or trigger actions|
|User Experience||Mainly passive viewing experience||Enhanced user engagement and interactivity|
|Use Cases||Collectibles, digital art, gaming items, virtual real estate, etc.||Interactive gaming items, dynamic artworks, decentralized applications (dApps), etc.|
|Potential Risks||Mainly associated with ownership and provenance of the digital assets||Additional risks associated with executing code, including security vulnerabilities, bugs, or unintended consequences|
|Adoption||NFTs have gained significant popularity and adoption across various industries||xNFTs are a relatively newer concept and have a more limited adoption, with potential for growth in the future|
Note that xNFTs are a concept that is still evolving, and specific implementations and functionalities may vary. The table above provides a general overview of the main similarities and differences between NFTs and xNFTs.
xNFT Use Cases
xNFTs have a wider range of potential uses than regular NFTs as they can communicate with each other through messages or events to enable features – such as an xNFT gallery changing the appearance of a piece of xNFT art or playing music from an xNFT media player at the start of a game. They can also update automatically based on external events or information from data sources.
Regular NFTs are primarily used to create artworks, gaming collectibles, and limited-edition music files. xNFTs enable a wider range of uses within one programmable Web3 token.
Backpack launched the Mad Lads xNFT collection as one of the first xNFT examples to showcase the standard’s features. The collection contains 10,000 PFPs, with each minted for 6.9 SOL.
The first xNFT Collection ever ⚡️
The Madlist claim
The Mad Lads experience, all in Backpack 🎒 https://t.co/s81Si2GvAb
— Backpack 🎒 (@xNFT_Backpack) February 1, 2023
Holders have access to extra functionality without having to access multiple websites, as it is all contained in the Backpack wallet. The developers were also able to overcome a malicious attack during the collection’s launch, which increased interest in the security of the project and drove up secondary sales.
The ability to manage xNFTs from within the Backpack wallet makes decentralized finance (DeFi) applications more convenient.
An example is Solend, a DeFi protocol on the Solana blockchain for lending and borrowing. Users can put up the assets in their wallet as collateral for borrowing funds or earn interest from lending them directly from the Solend xNFT without having to connect their wallet to another website or app.
This also applies to trading protocols – for instance, the Mango Markets DeFi platform on Solana has launched an xNFT that enables users to access and manage their account and trading positions from inside Backpack.
Gamers can play blockchain games using xNFTs directly from their wallet.
Sporting F1 is one of the first xNFT games to launch on the Backpack platform. Users mint and trade F1 cars and customizable traits and then stake them within the xNFT before each Grand Prix race to earn points and the chance to receive SOL tokens if they rank among the top players.
The ability to send messages between xNFTs allows communities to interact from within the Backpack wallet. For example, Solcial is a decentralized, permissionless social network that allows anyone to share content and earn rewards. It has introduced a social-to-earn (S2E) mining program that rewards users with tokens for staking and engaging with the community.