Blockchain

Your token isn’t just about storing value – it’s a powerful tool that can supercharge engagement, build a loyal community, and even bring in more revenue. If you’re looking to take your token to the next level and attract more holders, staking is a proven way to do just that. It’s all about getting everyone on the same page, aligning the interests of your holders with the long-term success of your project.

Here’s the deal: when people stake your token, they’re locking it up for a bit, showing their commitment to your project. This not only makes them feel like they’re part of something bigger, but it also helps your token by reducing its supply, potentially boosting its demand and value. Plus, it gets the attention of serious investors who are looking for projects with a solid foundation.

Let’s explore how a well-designed staking program can elevate your token’s value and transform it into a dynamic force within your ecosystem.

## What is Staking?

Staking means keeping a certain amount of cryptocurrency in a wallet to help run a blockchain network. In return, participants earn rewards, usually more tokens. This process helps secure the network and encourages people to invest and stay loyal over the long term.

![staking.png](https://strapi.suprabit.eu/uploads/staking_3391f0237d.png)

## Why Staking Matters for Your Project

Below are some ways staking can benefit your project:

### Enhanced Token Utility

Staking turns your token from a passive investment into an active part of your ecosystem. It encourages holders to lock up their tokens, showing their commitment to the project's long-term success. When people stake your token, they’re essentially saying, “Hey, I believe in this project.” This builds trust and attracts more people who want to be part of a strong community with a promising future.

### Increased Demand & Scarcity

Staking generates excitement and momentum around your project. As more individuals stake their tokens, it reduces the circulating supply, creating a sense of scarcity. This scarcity, coupled with increased demand from potential investors, can significantly enhance the value of your token. By strategically implementing staking, you can not only drive up the price but also position your token as a sought-after asset with long-term potential.

### Active Community Building

Staking fosters a sense of ownership and shared purpose. Your token holders become more than investors; they become active participants, ambassadors, and champions of your project. This engaged community can provide invaluable feedback, support, and advocacy, driving your project’s long-term growth.

### Attracting Institutional Investors

Staking signals a mature and well-managed project, enhancing your credibility and attractiveness to institutional investors. By demonstrating stability and long-term viability through staking, you open doors to potential partnerships and investments.

### Additional Revenue Streams

Depending on your staking model, you can create new revenue streams through transaction fees, validation rewards, or other activities within your ecosystem. This additional income can then be reinvested to fuel further growth and innovation.


## Crafting Your Ideal Staking Program

Here’s the thing about staking – it’s not a one-size-fits-all kind of deal. The best staking program is like a tailor-made suit: it’s got to fit your business perfectly. So, before you dive in, let’s think about a few things:

- **What are your goals?** Do you want to pump up your token’s value? Build a super engaged community? Maybe even create a new revenue stream? Your goals are the compass that will guide your staking program.
- **Who are your token holders?** Think about what motivates them. What kind of rewards would really get them excited? The better you understand your audience, the more effective your staking program will be.
- **How does staking fit into your token’s big picture?** Consider how staking will affect the supply and demand of your token, and how it fits into the overall health of your token ecosystem.
- **What kind of rewards are you offering?** Make them attractive, but also make sure they’re sustainable for the long run. It’s all about finding that sweet spot between short-term gains and long-term value.
- **Do you have the tech know-how?** Staking involves some serious technical stuff. Make sure you’ve got the right infrastructure and expertise in place to make it happen smoothly and securely.

To guide you through this exciting landscape, our team at Suprabit is ready to offer the support you need. We specialize in creating staking programs that fit your specific needs. Whether you’re starting from scratch or aiming to improve your current program, we’re here to help you succeed.

So, are you ready to take your token to new heights? Let’s team up and build something amazing together!

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Discover how staking can boost your token's value, build a loyal community, and attract serious investors. Learn to craft the perfect staking program.

Boosting Your Token Value with Staking

## The Importance of Governance in Blockchain

Governance is vital for blockchain protocols and Decentralized Autonomous Organizations (DAOs). It ensures transparent, fair, and inclusive decision-making, giving all stakeholders a voice. Effective governance keeps the protocol's integrity, prevents centralization, and manages disputes. These processes are essential for adapting to changes, implementing upgrades, and resolving conflicts.

However, traditional governance models often face inefficiency, lack of enforceable rules, and poor dispute resolution. As a result, these issues can lead to governance attacks, where bad actors exploit loopholes, weakening the protocol's stability. To tackle these challenges, [Q Blockchain](https://q.org/about-q) offers innovative solutions.

## Introducing Q Blockchain

Q Blockchain is designed to go ["beyond code is law"](https://q.org/blog/the-future-of-dao-governance-on-blockchain#:~:text=Beyond%20“Code%20is%20Law.”%20Some%20Examples), offering a comprehensive governance framework. It includes enforceable rule sets and strong dispute resolution mechanisms. Unlike conventional blockchain governance, which relies solely on immutable code, Q adds flexibility and human oversight.

Q's governance model involves multiple stakeholders: Q Token Holders, Expert Panels, Root Nodes, and Validators. These participants ensure decisions are made together and transparently. Q Token Holders have voting rights, Expert Panels provide specialized knowledge, Root Nodes serve as the network's backbone, and Validators ensure transaction integrity.

## Shared Governance Security

One of the core innovations of Q Blockchain is its [Shared Governance Security](https://q.org/about-q#what-is-shared-governance-security) model. This model enhances governance security by spreading decision-making authority across multiple stakeholders. Consequently, it reduces the risk of governance attacks by making it unprofitable and impractical for malicious actors. Shared Governance Security ensures no single entity can control the protocol, thereby promoting resilience and decentralization.

## Q Governance Opt-ins

Q Blockchain introduces the idea of [Governance Opt-ins](https://q.org/blog/delivering-on-qs-vision-introducing-q-governance-opt-ins). This approach allows projects to choose from a range of governance features that best fit their needs. Thus, this modular approach enables projects to customize their governance frameworks.

Common Governance Opt-ins include:
- **Protected Code:** Safeguarding critical parts of the code from unauthorized changes.
- **Expert Decision Making:** Using the expertise of qualified individuals for decision-making.
- **Treasury Oversight:** Implementing mechanisms for transparent and accountable fund management.

These opt-ins provide flexibility and security, allowing projects to adopt governance structures that match their requirements and risk profiles. For more information, visit [Q Blockchain's page on Governance Opt-ins](https://q.org/about-q#how-can-projects-use-q).

## Economics of Q

Additionally, Q Blockchain's economic model supports its governance framework by incentivizing participation and ensuring sustainability. Q Token Holders are rewarded for their involvement in governance processes, thus promoting active participation and aligning interests. Therefore, these economic incentives encourage long-term commitment and stability, which are essential for the protocol's success.

## Our Contribution

In collaboration with Q Blockchain, we have played a key role in refining and implementing its governance framework. Our team has worked closely with Q's developers and stakeholders to ensure robust, inclusive, and adaptable governance mechanisms. Moreover, by leveraging our expertise in blockchain governance, we have helped Q create a model that addresses current challenges and anticipates future needs.

## Conclusion

Q Blockchain represents a significant advancement in blockchain governance. It offers a flexible and secure framework that goes beyond traditional "code is law" principles. By incorporating enforceable rule sets, expert decision-making, and strong dispute resolution, Q addresses critical challenges in conventional governance models. With Shared Governance Security and Governance Opt-ins, Q provides projects with tools to build resilient and adaptable governance structures. Thus, our collaboration with Q has shaped a governance framework that sets new standards for the blockchain industry.


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Explore how Q Blockchain revolutionizes governance in blockchain protocols and DAOs with enforceable rule sets, dispute resolution, and shared governance security. Learn about Q's innovative solutions, including Governance Opt-ins, and our role in refining its robust governance framework.

Case Study: Governance in Blockchain Protocols and DAOs

Development

We've all become acquainted with cryptocurrencies like [Bitcoin](https://bitcoin.org/) and [Ethereum](https://ethereum.org/en/). Some of us have dived into the crypto market, exploring and investing in various digital currencies, familiarizing ourselves with the array of options available. Crypto investors are often drawn to volatile cryptocurrencies with fluctuating values, but ultimately, many end up converting their funds into stablecoins via pools on decentralized exchanges (DEXs). 

*Have you ever wondered how stablecoins maintain their equal value to the dollar on a distributed ledger?* USDT and USDC are two of the most talked-about stablecoins. These coins are not fully decentralized or algorithm-based, but they play a significant role in the cryptocurrency market. They are considered centralized because they are issued by specific authorities who ensure each coin is backed one-to-one by dollars, for which they charge a fee.

USDT, for example, claims to always be worth exactly one US dollar. However, there are some doubts about the actual cash reserves backing each USDT, as the issuer, Tether, sometimes lacks transparency in this area. On the other hand, USDC is known for its openness and regular audits of its dollar reserves. It's issued by Circle and Coinbase and also maintains a one-to-one value with the US dollar. Despite this transparency, the control over issuing and managing USDC remains centralized.

Now that we've briefly examined how centralized stablecoins operate, let's delve deeper into our topic.

## What are Decentralized Stablecoins?

Unlike centralized stablecoins backed by assets like fiat, gold, oil, or real estate, decentralized stablecoins are algorithmic. No central authority backs or controls them.

Blockchain technology operates on a decentralized ledger, creating a natural demand for decentralized stablecoins. These coins offer an innovative solution in the cryptocurrency world. They combine the stability of traditional currencies with blockchain benefits. Decentralized stablecoins use algorithms and smart contracts to keep their value stable, no matter the external influences. Let's explore how these principles work and how they ensure stability.

## Understanding MakerDAO: The Backbone of Decentralized Finance

In the vast landscape of decentralized finance (DeFi), MakerDAO stands tall as a pioneer, offering a unique solution to the volatility conundrum inherent in cryptocurrency markets. At the heart of MakerDAO lies a symbiotic relationship between two tokens: MKR and DAI. MKR, the governance token, empowers holders with voting rights, allowing them to actively participate in shaping the future of the MakerDAO ecosystem. On the other hand, DAI serves as a stablecoin, meticulously pegged to the value of the US dollar. But what sets MakerDAO apart is not just these tokens; it's the ingenious mechanism behind them.

The core concept revolves around maintaining the value of DAI in relation to the USD through a decentralized framework, achieved with the assistance of collateral and vaults - smart contracts that oversee collateralization.

### Here's how it Works:

A user deposits ETH or ERC-20 tokens as collateral into a vault. Based on the collateral, the user can mint new DAI tokens. However, there's a catch - the system imposes a minimum collateralization ratio. For instance, if the minimum ratio is set at 150%, the user must have at least $150 worth of collateral for every $100 worth of DAI generated. If the collateralization ratio falls below the minimum (e.g., 150%), the user must either add more collateral or face liquidation.

### Let's Illustrate this with an Example:

Imagine a user possesses 5 ETH, each valued at $200, totaling $1000. Assuming a minimum collateralization ratio of 150%, the user can generate a maximum of 667 DAI. However, for safety, the user decides to mint only 500 DAI, maintaining a comfortable collateralization ratio of 200%. In this scenario, the user secures their position, safeguarding against potential market fluctuations.

![img_1.png](https://strapi.suprabit.eu/uploads/img_1_09d996442e.png)

If the value of the collateral increases, the user can generate additional DAI tokens. The system mints an over collateralization buffer of 500 DAI. In our example, if the price of ETH rises to 300 USD, the user can generate an additional 250 DAI tokens (if they wish to maintain a 200% ratio).

![img_2.png](https://strapi.suprabit.eu/uploads/img_2_5983846dd7.png)

On the other hand, if the value of the collateral falls to $500 (or below), the user can deposit additional collateral into the vault. The collateralization factor stands at 150%, allowing a maximum loan of 1,000 DAI, calculated by dividing 1,500 by 1.5. Another user, known as the keeper, can liquidate the contract. The actual loan amounts to 500 DAI, resulting in a collateralization ratio of 300%.

The keeper sells enough collateral to gather the DAI tokens needed to repay the vault. The keeper keeps a certain fee and returns the remaining collateral to the user's vault.

![img_3.png](https://strapi.suprabit.eu/uploads/img_3_fb5574ba73.png)

Conversely, if the price of ETH drops to $150, with the collateral now valued at $750 and the ratio standing at 150%, the keeper will sell 3.33 ETH for 500 DAI and return it to the vault. They will retain 0.2 ETH as a fee, while the remaining 1.47 ETH will be returned to the user's vault.

![img_4.png](https://strapi.suprabit.eu/uploads/img_4_2e38eb663e.png)

## Ensuring Stability and Sustainability in MakerDAO

As MakerDAO continues to revolutionize the landscape of decentralized finance (DeFi), it uses various mechanisms to maintain stability and foster sustainable growth within its ecosystem. Let's explore these mechanisms:

- **Stability Fee:** This fee has a variable interest rate applies to all vault users who generate DAI tokens. It serves to regulate the DAI supply and is crucial for keeping its value stable relative to the pegged currency (USD).
- **DAI Savings Rate (DSR):** On the flip side, the DAI Savings Rate offers a variable interest rate that DAI token holders receive. To earn DSR, holders must deposit their tokens into a specific smart contract. Note that the DSR remains lower than the stability fee, motivating users to borrow DAI instead of holding it.
-  **Debt Ceiling:** To prevent excessive expansion of the DAI supply, MakerDAO imposes a debt ceiling. This ceiling limits the maximum amount of DAI that one can generate in a particular vault, depending on the collateral type. This control helps keep the system within safe limits and protects against risks from too much issuance. If liquidation fails to cover the outstanding debt of DAI tokens, the system covers the shortfall using the collected stability fees. This mechanism keeps the system solvent even in adverse market conditions, bolstering confidence among users and investors alike.

## Governance and Initiatives within MakerDAO

At the core of MakerDAO's decentralized governance model lies the MKR token, serving as the mechanism through which stakeholders influence the protocol's parameters and direction. Let's explore the role of MKR token holders and other participants within MakerDAO.

### MKR Token Holders:

MKR token holders wield significant power within the Maker protocol. They actively participate in governance decisions, ranging from adjusting protocol parameters to voting on the distribution of surplus funds. In the event of a failure of debt repayment mechanisms, MKR token holders can mint new tokens and sell them to cover outstanding debts. However, this dilutes the ownership stake of existing MKR holders.

Additionally, in the event of system malfunctions or emergencies, MakerDAO has provisions for an emergency shutdown, ensuring the protection of user funds and the integrity of the protocol.

### Motivations and Initiatives:

MKR token holders are incentivized to manage the platform effectively, as the value of their holdings correlates with the success and stability of MakerDAO. They have a vested interest in maintaining the integrity of the protocol and making decisions that foster long-term sustainability.

Keepers, on the other hand, play a vital role in the ecosystem by executing liquidations and earning fees for their services. Users also play a crucial role by utilizing the platform for various purposes:

- Users may choose to collateralize their assets (such as ETH) rather than selling them, anticipating future appreciation in value.
- They may leverage the platform to access additional liquidity, either by minting DAI against their collateral or utilizing financial leverage to increase their exposure to assets.

###  Maintaining the DAI-USD Peg:

To ensure the stability of DAI's peg to the USD, MakerDAO implements various strategies:

- If the price of DAI exceeds $1, users can lock additional collateral to mint new DAI tokens, subsequently selling them on the market. This increases the supply of DAI, driving its price back towards $1.
- Conversely, if DAI's price falls below $1, existing users may buy DAI from the market and return it to the vault reducing the supply. MakerDAO may also increase the stability fee to incentivize users to return DAI to the vault, thereby stabilizing its price.

Through these mechanisms, MakerDAO endeavors to maintain the stability and integrity of the DAI stablecoin, ensuring its usability and reliability within the broader cryptocurrency ecosystem.

![img_5.png](https://strapi.suprabit.eu/uploads/img_5_f31607726b.png)

## Conclusion

In conclusion, MakerDAO pioneers decentralized finance (DeFi) with innovative stablecoin solutions and governance.
Through decentralized governance, empowered by MKR token holders, MakerDAO ensures protocol resilience. With collateralized debt positions and smart contracts, MakerDAO maintains DAI stability while fostering liquidity and risk management. Incentivizing responsible participation and upholding the DAI-USD peg, MakerDAO commits to stability and sustainability. Leading DeFi with collaboration and innovation, MakerDAO sets standards for decentralized governance and stablecoin mechanisms, shaping finance's future.

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Explore MakerDAO's impact on DeFi and decentralized stablecoins, ensuring DAI's stability and robust governance .

Decentralized Stable Coins

A cross-chain bridge is a decentralized solution that connects different blockchain networks, allowing assets and data to be transferred between them. It acts as a crucial connection point, enabling communication and interaction between blockchain ecosystems that would otherwise be isolated from each other.

Unlike a general blockchain bridge, which can refer to various types of interconnecting solutions, a cross-chain bridge is specifically designed to facilitate the transfer of assets or data across different chains. Its purpose is to overcome the limitations of individual blockchains. It aims to enhance their capabilities by enabling the movement of assets between them.

This blog will cover a high-level overview of the Hyperlane protocol. This protocol allows us to develop cross-chain DApps using their permissionless interoperability layer. This layer works across various blockchain environments.

## Importance of Cross-chain Bridges

The primary characteristic that sets a cross-chain bridge apart is its ability to establish trust and ensure secure transfers of assets or data between diverse blockchain networks. This is accomplished by employing a combination of cryptographic techniques, smart contracts, and other protocols. These measures guarantee the integrity, security, and transparency of cross-chain transactions.

Cross-chain bridges are essential for expanding the potential applications and adoption of blockchain technology. They facilitate the seamless exchange of assets, such as tokens or NFTs, between different chains, thereby enhancing interoperability and enabling new possibilities within the blockchain ecosystem.

## Hyperlane

Hyperlane is a permissionless interoperability layer. It enables smart contract developers to send arbitrary data between blockchains. This allows developers to create interchain applications. These applications can move tokens, execute function calls, and perform other tasks. Thus, making them accessible to users on any blockchain.

Users interact with the Hyperlane protocol through **Mailbox** smart contracts. These contracts provide an on-chain messaging interface for sending and receiving interchain messages. Hyperlane offers a modular approach to security. It allows applications to choose from a selection of Interchain Security Modules (ISMs). This customization helps in securing their integration with the Hyperlane messaging interface.


![hyperlane_overview.drawio.png](https://strapi.suprabit.eu/uploads/hyperlane_overview_drawio_8f183e44c6.png)


### Mailbox

The Hyperlane **Mailbox** smart contracts provide an on-chain API for sending and receiving interchain messages. A Mailbox contract is deployed on every chain supported by Hyperlane.

Moreover, the network of Mailboxes serves as the connective tissue between blockchains. Developers leverage this network to create interchain applications and integrate interchain functionality into their existing applications.

### Interchain Security Module

Hyperlane secures its operations through **Interchain Security Modules (ISMs)**. ISMs, which are smart contracts, verify that interchain messages delivered on the destination chain originated from the correct source chain.

Furthermore, ISMs are fully customizable. Developers have the flexibility to craft their own ISMs according to the specific requirements of their applications.

For instance, application developers can design ISMs to adapt security models based on message content. They might implement a security model prioritizing safety over latency and gas costs for high-value and infrequent messages (e.g., governance). Conversely, for lower value and more frequent messages, a security model favoring latency and gas costs over safety can be utilized.

One of the most commonly employed ISM types is the **MultisigISM**. These ISMs validate that a specified number, denoted as *m* out of *n*, of validators have endorsed the validity of a given interchain message.

## Agents

The Hyperlane protocol relies on decentralized off-chain agents to observe, sign, and transmit messages actively.

For convenience, Hyperlane implements these agents as a set of binaries written in Rust, ensuring smooth operations.

1. Validators play a crucial role in attesting to the validity of Mailbox messages that use the Multisig ISM, making their signatures available to a relayer for further action.
2. Relayers, on the other hand, take charge of aggregating off-chain metadata for the Interchain Security Module interface and efficiently delivering messages to their designated recipients.

![blog-Page-2.drawio.png](https://strapi.suprabit.eu/uploads/blog_Page_2_drawio_23e9b7d766.png)

### Validators

Validators observe the Mailbox contract and sign a Merkle root, if required, to facilitate message transmission to remote chains.

In contrast to many other protocols, Hyperlane lacks a dedicated validator set. Instead, anyone is free to run their own validator, provided that the receiver contract specifies a Multisig ISM that includes their validator.

### Relayer

A relayer ensures the delivery of messages to their recipients. Relayers play a permissionless but integral role in the Hyperlane protocol. Anyone can operate a relayer.

Relayers actively relay messages between two or more chains. They monitor the origin Mailbox contracts, detecting new messages. Upon detecting a new message, the relayer queries the destination chain to ascertain the recipient's Interchain Security Module (ISM).

Subsequently, the relayer gathers the required metadata for that ISM. The metadata collection process varies depending on the ISM and may involve obtaining signatures from one or more validators, Merkle proofs, and zero-knowledge proofs.

Finally, the relayer delivers the message to its recipient by invoking the Mailbox on the destination chain with the previously gathered metadata.

## Conclusion

Cross-chain bridges play a crucial role in expanding the potential applications and adoption of blockchain technology. They enable the seamless exchange of assets, such as tokens or NFTs, between different chains. Facilitating these exchanges, cross-chain bridges like the Hyperlane protocol not only enhance the interoperability between diverse blockchain ecosystems but also unlock new possibilities for developers and users alike. As the blockchain landscape continues to evolve, cross-chain bridges are pivotal in fostering a more connected and functional blockchain ecosystem, paving the way for a more integrated, efficient, and user-friendly blockchain future.

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The Hyperlane protocol allows us to develop cross-chain DApps using their permissionless interoperability layer. Read more to see how it works across various blockchain environments.

Building Cross-chain DApps with Hyperlane

Think about how excited you get when you collect points for buying coffee or earn a free pizza after a certain number of orders. Web3 projects can take a similar approach to create a thriving ecosystem and keep people engaged. Crafting a successful incentive program in the Web3 space is no small feat. It's not just about giving out tokens; it's also about keeping everyone interested and involved over time. These incentive programs are extremely important because they help keep the community active and ensure people want to stick around.

So, the big question now is, *"Which incentive program is right for my project?"*

With so many options out there, finding the right fit can be tricky, but it's crucial for the success of any Web3 project. In this blog, we will go over some of the different types of incentive programs one can adopt for their Web3 project.

![26857375_7233601.png](https://strapi.suprabit.eu/uploads/26857375_7233601_1d0396cc06.png)

## What are incentive programs?
Incentive programs do exactly what the name suggests: they offer rewards or perks to motivate people to take certain actions or behaviors. These programs are designed to encourage participation, loyalty, and engagement by providing something of value in return. Whether it's through earning tokens for participating in a platform, getting discounts for frequent purchases, or gaining access to exclusive content or features, incentive programs aim to create a win-win situation. Participants get rewarded for their contributions or loyalty, while the organizations or projects behind these programs benefit from increased activity, investment, or commitment.

Essentially, incentive programs not only drive the growth and sustainability of the ecosystem but also foster a sense of community around your token project.

![8610412_5943.png](https://strapi.suprabit.eu/uploads/8610412_5943_375f0a3b9d.png)

## Why Incentive Programs Are Useful
Incentive programs are invaluable tools for several reasons:

- **Encouragement of Participation:** Incentive programs motivate users to engage with the platform. By offering rewards for participation, users are more likely to use the platform actively, whether it's through trading, staking, or contributing content. This increased engagement helps to create a vibrant community around the project.
- **Bootstrapping Growth**: Incentive programs for new projects can boost growth by attracting early adopters and contributors. These individuals can turn into project advocates, spreading awareness and drawing in more users through word of mouth and social media.
- **Retention**: Rewarding continued participation and loyalty aids in maintaining user engagement over time. Incentive programs, including vesting schedules, bonuses for holding on to investments long-term, or rewards for regular participation, motivate users to remain actively involved with the project.
- **Price Support**: Although not the main focus of many projects, incentive programs can indirectly uphold the token's price. They can increase demand via utility or rewards and decrease velocity as tokens are retained for staking or earning rewards.


## Different Types of Incentive Programs
Incentive programs can take various forms, depending on the goals of the ecosystem and the behaviors they aim to encourage. Here are four common types:

### Liquidity Mining

Liquidity mining is a pivotal incentive program in the DeFi ecosystem. Users, often referred to as liquidity providers (LPs), deposit their assets into a liquidity pool, which facilitates decentralized trading, lending, or borrowing. In return for their contribution, LPs earn rewards, usually in the form of additional tokens from the platform. This not only incentivizes users to provide liquidity but also aligns their interests with the ecosystem's success. A good example is [Uniswap,](https://uniswap.org/) where users can earn UNI tokens by providing liquidity to various trading pairs.

### Staking Rewards
Staking is another incentive program, especially in proof-of-stake (PoS) and DeFi projects. Users lock up tokens as a form of *"staking"* to participate in network operations, such as transaction validation or governance. In exchange, they receive staking rewards, which are typically a percentage yield of the tokens staked. This system not only secures the network and ensures a decentralized governance structure but also encourages users to hold onto their tokens, reducing market volatility. [Cardano (ADA)](https://cardano.org/) and [Polkadot (DOT)](https://coinmarketcap.com/currencies/polkadot-new/) are examples of networks that offer staking rewards to incentivize network participation and security.

### Airdrops
Airdrops are a direct distribution of tokens to users' wallets, often used as a marketing strategy to increase awareness and distribute tokens widely. They can target existing users of a platform, holders of a specific token, or participants who perform certain actions, such as signing up for a newsletter or joining a community. Airdrops are effective for bootstrapping new token projects, rewarding loyal users, or even driving the decentralization of token ownership. Snapshot-based airdrops reward existing holders, while task-based airdrops require participants to complete specific actions.

![26857153_7194075.png](https://strapi.suprabit.eu/uploads/26857153_7194075_0043486bb8.png)

### Community Management and Engagement
This type of incentive program focuses on building and maintaining an active and engaged community. Rewards are given for contributions that benefit the community and project, such as content creation, bug reporting, social media promotion, and active participation in forums or chat groups. Platforms like [Galxe ](https://blog.galxe.com/galxe-loyalty-points-system-redefining-web3-loyalty-programs-135a159dcb4c) offer infrastructure to manage these types of incentive programs by tracking contributions and distributing rewards. Another example is [Zealy](https://zealy.io/), which focuses on rewarding users for engagement activities within a project's ecosystem, highlighting the importance of community in the growth and sustainability of blockchain projects.

![pasted_image_0_1.png](https://strapi.suprabit.eu/uploads/pasted_image_0_1_0944d79613.png)

## Turning token projects into thriving ecosystems
Through incentive programs, Suprabit helps token projects to transform into flourishing ecosystems. We pride ourselves on tailoring each program to address the distinct needs of every project, guaranteeing not only immediate engagement but also the nurturing of long-term value and sustainability within the ecosystem. 

Through a combination of strategies, including liquidity mining, staking rewards, airdrops, and community engagement initiatives, your project can also foster a loyal and active community around its token.



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Discover how to engage and retain your community in the Web3 space with effective incentive programs

Different Incentive Programs for Enhancing Web3 Project Engagement

As we step into 2024 with new resolutions, our team has been reflecting on the technologies that are poised to make a significant impact in the coming year. Among various innovations, Artificial Intelligence (AI) and Blockchain have particularly captured our attention. Let's explore what the future may hold for these transformative technologies.

## **Blockchain: Paving the Way for a Decentralized Tomorrow**

Several team members are enthusiastically shifting their focus towards Blockchain technology. They recognize its potential beyond cryptocurrency and envision Blockchain as a key player in creating secure, efficient, and transparent systems across various sectors. In 2024, their dedicated efforts will be focused on enhancing their full-stack development skills, with a particular emphasis on mastering design patterns relevant to Blockchain and other emerging technologies.

![BlockchainAgency2024.png](https://strapi.suprabit.eu/uploads/Blockchain_Agency2024_97d8580529.png)

## **AI: The Vast Realm of Possibilities**

When we asked one of our team members what he thinks, he simply replied with "AI stuff". The term "AI stuff" may sound simple, but it represents Artificial Intelligence's immense and mostly unexplored potential. Our team sees AI not just as a tech trend but as a game-changer in the making. From making everyday tasks easier to tackling complex challenges, AI is set to revolutionize our workplaces and daily lives. The real challenge and opportunity lie in turning theoretical AI concepts into practical and impactful business solutions. We're jumping on the bandwagon by providing our partners and clients with personalized AI experiences tailored to their business needs.

![AISolutionsAgency2024.png](https://strapi.suprabit.eu/uploads/AI_Solutions_Agency2024_d9a58bb83d.png)

## **AI and Blockchain: The Dynamic Duo of 2024**

The merging of AI and Blockchain technology is something that really gets us excited. The amazing analytical capabilities of AI have the potential to greatly improve the security and efficiency of Blockchain networks. On the other hand, Blockchain can provide a strong and transparent foundation for applications driven by AI. With the growing regulation and popularity of cryptocurrencies, we think that 2024 could be a big year for the widespread use of these technologies, changing the way we interact digitally and the overall tech scene.

![BlockchainAISolutions.png](https://strapi.suprabit.eu/uploads/Blockchain_AI_Solutions_9bf3a24948.png)

As we welcome 2024, these insights not only showcase our excitement for the future but also demonstrate our dedication to remaining at the cutting edge of technological advancements. If you're looking to enhance your business with innovative AI or Blockchain solutions, don't hesitate to reach out. Send us a message through our [contact form](https://suprabit.eu/contact), and let's explore how we can propel your business into the future together.

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Discover the Future of AI and Blockchain in 2024! Our team shares insights on Blockchain's role in creating decentralized systems and AI's untapped potential in transforming businesses and daily life. We also explore the exciting synergy between AI and Blockchain and how this powerful duo can enhance digital security and efficiency.

AI & Blockchain in 2024: Embracing the Future

## Motivation
Modern Smart Building Management solutions are fairly complex, comprising of a number of software modules supporting a variety of, often proprietary, protocols. When you add in all the front and back-end devices, automation stations, sensors and gateways, it can all seem like a real pain in the neck. But there is a clear economic benefit as functional smart building solutions are able to optimize energy consumption, provide better living environments and better security for building occupants, bringing your business closer to achieving that net zero goal. However, there are new issues regarding data security popping up every day, due to complexity, Internet integration and, more often than usual, slow adaptation to the newest technology stack. Traditional solutions relied on private networks where security was not such a big deal, but now, as every smart building solution provider offers Internet connectivity, the security paradigm changed. That left most solutions vulnerable to inside and outside attacks as well as data breaches. On the other hand, with the advancement of the Internet, many new use cases emerged that have the potential to significantly improve the ROI of smart building management solutions and enable more building automation in favour of building occupants and investors.  

This presents an obvious need to introduce a new data infrastructure layer to your solutions that will guarantee data security and data availability within a smart building management market. 

## Lavsa
Lavsa is a decentralized storage solution for smart building management, developed using blockchain and IoT technology. Our solution is taking in a stream of data and then replicating that data to every node in a private blockchain network. The newly added data sets are hashed and the hash is published on permissionless public blockchains like Ethereum, Polygon etc. By using blockchain(s) as an additional layer of security, we are improving integrity, immutability and availability. This is a step up from the traditional database model because, in Lavsa, every piece of data is distributed across a number of nodes and additionally hashed on a public blockchain, making it virtually impossible to fake, change or delete the data. At the same time, smart contracts are used to improve data relevancy, white and black lists and support new use case scenarios.  



![blockchain.svg](https://strapi.suprabit.eu/uploads/blockchain_ec6215de05.svg)





## Lavsa Goals
- Put the building data security, integrity and availability at the forefront of the Smart Building and IoT initiatives
- Establish trust among stakeholders of the building automation projects
- Enable higher level of automation
- Support integration with third-party building automation and business solutions
- Enable new disruptive business models 
 

## Lavsa Use Cases

Lavsa puts the data produced by a variety of smart building devices at the forefront of the Smart Building economy enabling new disruptive business models like 
- Data monetization and data markets
- AI solutions based on relevant building data
- Regulatory compliance
- Support for ESG initiatives 
- M2M payments
- Building Automation Infrastructure As a Service

If you have any questions regarding Lavsa, or if you are interested in discussing various Smart Building use cases - feel free to [contact us](https://suprabit.eu/contact) and let's give it a thought together.



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Back in 2018., the blockchain hype started to gain traction outside of the crypto scene and a number of enthusiasts proposed using blockchain for different business use cases. We had a vision to provide every party with relevant and tamper-proof data delivered by smart building sensors and devices. That data has to be so good that somebody wants to pay for it. Once you bought it, you want to have it ready at your disposal for further processing. And you want to be sure of its integrity.

Lavsa - a new kid on the Block

Internship

**First thing first: the team and the brainy stuff**

Before starting the internship, I wasn’t really feeling nervous as I felt I had a good understanding of the basics of both Solidity and blockchain. Also, my colleague shared some insider information with me regarding the atmosphere, so I wasn’t surprised by the openness of the team and their willingness to help me and the other interns.
Firstly, we slowly studied the stack and the task itself. Then we got familiar and learned to work with the new blockchain technology that enables easier management of smart contracts. We were excited to start developing our own solutions!

Since blockchain is still a quite new technology, you can learn something new about it every day, as long as you know what to search for. Us interns were involved in the whole development cycle starting from the very beginning. First, we went back and forth researching the technologies and deciding which ones would be the best for this project and the internship, before deciding on Scaffold-ETH.

**You’ve heard it several times already: tHErE aRe No STuPid qUEsTioNs!**

![mulan-mushu.gif](https://strapi.suprabit.eu/uploads/mulan_mushu_eea0c9c292.gif)

 

Well, I’m going to say it again, there really are no stupid questions in Suprabit. Around here, everybody is eager to help each other, be it solving a bug or replacing the coffee pod. Don’t waste your time asking yourself “What will they think of me asking many questions or the same question many times?” because nobody will turn their back or roll their eyes at you. They all know the common goal is gaining understanding and moving forward.
 
The atmosphere is chill and most enjoyable. Once you've had enough of the keyboard tapping, you can make your way to our local table tennis station situated inside the office. Ask away, someone will surely join you! (Beware of the boss, you have to let him win, otherwise...).
 
 
**Future opportunities**

The internship program was well planned and adapted to students with or without previous knowledge of blockchain technology. The people were great, and I enjoyed the entire experience. I'm grateful for the things that I’ve learned during the internship and I'm happy that I was able to stay at Suprabit as an employee after the internship had finished. I know that Suprabit will continue to support my growth and make me a better blockchain developer (and a better table tennis player)!
 
![DSC00401-min.jpg](https://strapi.suprabit.eu/uploads/DSC_00401_min_d756afe30c.jpg)



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This summer, I decided to spend my summer-break gaining as much knowledge on blockchain as possible. After a couple of hours of research, a few interviews and one solved solidity smart contract task, I landed my internship at Suprabit.

My Blockchain Internship at Suprabit!

## Introduction

In today's world trust is everything, but unfortunately, different parties, more often than not, do not trust each other. Therefore, it is crucial for one party to prove something to the other party - in that case, trust is not required, but only sophisticated mechanisms that would almost guarantee the truth. 

Data anchoring with Merkle tree when implemented correctly can make a zero-knowledge proof. To find out how, first you would need to get familiar with those three terms - Data anchoring, Merkle tree and zero-knowledge proof.

### Data anchoring

Data anchoring consists in creating a timestamped proof of existence for data and storing it to a tamper-resistant blockchain.

Key point is that having the data enables the recreation of the proof, but not the other way around. This way whoever is in possession of the data can verify if the data has been tampered with since its anchoring on the blockchain.


### Merkle tree

Merkle tree or hash tree is a binary tree in which every leaf is labeled with cryptographic hash of a data block, and every node that is not a leaf is labeled with cryptographic hash of the labels of its child nodes. 


![merkletree.png](https://strapi.suprabit.eu/uploads/merkletree_0f5f010ef6.png)
Source: [Wikipedia](https://en.wikipedia.org/wiki/Merkle_tree)

Similar to data anchoring, with knowing all data blocks it is easy to construct a Merkle tree and find the label of the root node or simply called root hash (top hash), but it is not possible to find data blocks knowing only root hash. That is why Merkle tree is used in data anchoring where root hash is the proof that the data is stored onto blockchain.

Another key feature Merkle tree has is that it can be partially created with only subset of data and a receipt for that subset. It is important to note that only those who possess all the data are able to generate such receipts. For example: if we only have L1 and L2 data blocks from the picture above, and we have "Hash 1" inside the receipt, we are able to construct the left side of the Merkle tree with data blocks, and with "Hash 1" from the receipt we are able to calculate root hash.

### Zero-knowledge proof

Zero-knowledge proof is a method by which one party (the prover) can prove to another party (the verifier) that a given statement is true while the prover avoids conveying any additional information apart from the fact that the statement is indeed true. The essence of zero-knowledge proofs is that it is trivial to prove that one possesses knowledge of certain information by simply revealing it; the challenge is to prove such possession without revealing the information itself. - from [Wikipedia](https://en.wikipedia.org/wiki/Zero-knowledge_proof)

## How is it done?

Now that you have gotten familiar with these terms, I am guessing you got a hang of it - how could Merkle tree be used to achieve data anchoring and zero-knowledge proof? First, to anchor your data you would simply order your data blocks and construct a Merkle tree. It is important to arrange data blocks in deterministic order because later data blocks will need to be ordered exactly the same. The root hash of this tree has to be stored on a public blockchain and that is it - you anchored your data.

Second thing you want to do is to ensure you are able to recreate Merkle tree with only subset of your data blocks and an according receipt. You would have to write two algorithms - first algorithm, based on the subset of data blocks and all data blocks, creates the receipt for the subset; second one, given the subset and an according receipt, recreates the Merkle tree. First algorithm is used internally when you want to share a portion of your data, and second algorithm should be open source that would be used by the receiver of the data to verify whether the data has been tampered with since its anchoring.

## Conclusion

Data anchoring is useful mechanism that finds its applications in various industries. There are a lot of ways to implement data anchoring, but in our case we used Merkle tree to do so. Merkle tree is a binary tree in which leaf nodes are labeled with hash of data blocks, and each non-leaf node is labeled with hash of its child nodes. Hence, Merkle tree algorithm can create a single hash (root hash) out of multiple data blocks. Also, root hash of a Merkle tree can be recreated either with all data blocks it contains, or with a subset of the data blocks and an according receipt. 

Data anchoring using the Merkle tree algorithm creates the ability to prove certain data is valid without sharing all the data. This makes it zero-knowledge proof.


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Find out what data anchoring is and why is it beneficial. This article will teach you basic principles and simple usage so you can start thinking of ways to apply data anchoring in your business.

Data anchoring and verification using zero-knowledge proof

## Introduction

In our introductory [NFT blog post](https://www.suprabit.eu/article/nfts-explained), we explained what NFTs are and what they are used for. In the meantime, we delivered [Suprabit Giant NFT](https://opensea.io/collection/suprabit-giant-nft) to our business partners and employees and hopefully opened a new era of NFT corporate gifts 👍. <br/>
Suprabit Giant was a small but very interesting project that included a digital artist, full-stack and blockchain devs, a business developer, and a legal officer who jointly delivered a unique experience to our partners.

This post will help you get into the technical details of the Suprabit Giant implementation. 

## NFTs

As a quick technical introduction to NFTs, we will compare fungible and non-fungible tokens with simplified pseudocodes for the most basic functions, keeping track of the account balance, adding funds to the account, and removing funds from the account. In the examples below, fungible tokens are on the left, and non-fungible tokens are on the right. Notice how we don’t distinguish individual fungible tokens on the left - we store balance as a number, while with the non-fungible tokens on the right, the balance of an account is defined as a collection of token ids - each token has its unique id. Transferring fungible tokens means just decreasing the sender’s balance, and increasing the receiver’s balance. Meanwhile, transferring non-fungible tokens means removing specific tokens from the sender’s collection and inserting them into the receiver’s collection.

<table style="font-size: 0.75em; display: flex; justify-content: center;">
<tr>
<td style="max-width: 50vw;">

```js
// Account balance - integer
account.tokens = 100;
// Add 10 funds
account.tokens += 10;
// Remove 10 funds
account.tokens -= 10;
```

</td>
<td style="max-width: 50vw;">

```js
// Account balance - set of token ids
account.tokens = [1, 3, 100, 200];
// Add tokens with id 99
account.tokens.insert(99);
// Remove token with id 99
account.tokens.remove(99);
```

</td>
</tr>

<tr>
<th>Fungible Token</th>
<th>Non-Fungible Token</th>
</tr>
</table>

<br/>

## ERC721

[Ethereum Improvement Proposals](https://eips.ethereum.org/) (EIPs) describe standards for the Ethereum platform, including core protocol specifications, client APIs, and contract standards. Among EIPs there are Ethereum Request for Comments (ERCs) which tackle application-level standards and conventions.

[ERC721](https://eips.ethereum.org/EIPS/eip-721) introduces a standard interface for the implementation of an NFT smart contract. It defines a set of methods that each smart contract needs to implement to be ERC721 compliant. Below we can see the simplified ERC721 interface, this is not a full ERC721 interface, we only extracted a few basic functions.


<table style="font-size: 0.75em; display: flex; justify-content: center;">
<tr>
<td style="max-width: 90vw;">

```solidity
/// @title ERC-721 Non-Fungible Token Standard
/// @dev See https://eips.ethereum.org/EIPS/eip-721
///  Note: the ERC-165 identifier for this interface is 0x80ac58cd.
interface ERC721 /* is ERC165 */ {
    /// @notice Count all NFTs assigned to an owner
    /// @dev NFTs assigned to the zero address are considered invalid, and this
    ///  function throws for queries about the zero address.
    /// @param _owner An address for whom to query the balance
    /// @return The number of NFTs owned by `_owner`, possibly zero
    function balanceOf(address _owner) external view returns (uint256);

    /// @notice Find the owner of an NFT
    /// @dev NFTs assigned to zero address are considered invalid, and queries
    ///  about them do throw.
    /// @param _tokenId The identifier for an NFT
    /// @return The address of the owner of the NFT
    function ownerOf(uint256 _tokenId) external view returns (address);

    /// @notice Transfers the ownership of an NFT from one address to another address
    /// @dev This works identically to the other function with an extra data parameter,
    ///  except this function just sets data to "".
    /// @param _from The current owner of the NFT
    /// @param _to The new owner
    /// @param _tokenId The NFT to transfer
    function safeTransferFrom(address _from, address _to, uint256 _tokenId) external payable;

    /// @notice Transfer ownership of an NFT -- THE CALLER IS RESPONSIBLE
    ///  TO CONFIRM THAT `_to` IS CAPABLE OF RECEIVING NFTS OR ELSE
    ///  THEY MAY BE PERMANENTLY LOST
    /// @dev Throws unless `msg.sender` is the current owner, an authorized
    ///  operator, or the approved address for this NFT. Throws if `_from` is
    ///  not the current owner. Throws if `_to` is the zero address. Throws if
    ///  `_tokenId` is not a valid NFT.
    /// @param _from The current owner of the NFT
    /// @param _to The new owner
    /// @param _tokenId The NFT to transfer
    function transferFrom(address _from, address _to, uint256 _tokenId) external payable;
}
```
</td>
</tr>
</table>
<br/>

But why is this even important for us? Can’t we create our own NFT smart contract without any fuss with standards? In theory, we can, no one forces us to be ERC721 compliant, in practice, a short answer - no. Now for the long answer, we need to enable interoperability between our NFT contract and other applications. A primary example of this interoperability is a wallet application. The general expectation is that users can see and manage their tokens in their wallet application - this is generally a mobile app. A wallet application can check which tokens the user owns only by reading the NFT smart contract directly. Now imagine what would happen if every NFT smart contract was implemented differently - a wallet application would need to develop an interface for each smart contract which doesn’t make sense. This is why we accept ERC721 and other EIPs and implement smart contracts accordingly. Any application can integrate with our NFT just by fetching the address of our smart contract as everything is publicly available.

Now that we have a better understanding of what we need to implement it’s a good time to introduce OpenZeppelin, an open-source library of standardized smart contracts that were developed following best security practices, and are extensively audited. Within the library, we have an implementation of the basic ERC721 compliant smart contract which tackles all the standard functionality of the NFT, minting, fetching balance, transferring, etc. As smart contracts are object-oriented, we can just inherit OpenZeppelin’s basic ERC721 contract and extend it with our business logic that is specific to our NFT.

At this point, we have a smart contract with basic NFT functionality - we have the tokens, but what differentiates them? Where is the uniqueness, the praised non-fungibility? This is where the token metadata comes into play, and if we consult the ERC721 interface we can spot the metadata extension which describes a way to attach metadata to the contract and each token individually. This allows us to attach some assets to tokens, like images, videos, and other media, or data in general. Below you can see the interface of the metadata extension. The main function here is the tokenURI which allows us to specify a distinct URI for a specific token. The idea is that the tokenURI points to a JSON file that contains all the metadata related to the specific token.

<table style="font-size: 0.75em; display: flex; justify-content: center;">
<tr>
<td style="max-width: 90vw;">

```solidity
/// @title ERC-721 Non-Fungible Token Standard, optional metadata extension
/// @dev See https://eips.ethereum.org/EIPS/eip-721
///  Note: the ERC-165 identifier for this interface is 0x5b5e139f.
interface ERC721Metadata /* is ERC721 */ {
    /// @notice A descriptive name for a collection of NFTs in this contract
    function name() external view returns (string _name);

    /// @notice An abbreviated name for NFTs in this contract
    function symbol() external view returns (string _symbol);

    /// @notice A distinct Uniform Resource Identifier (URI) for a given asset.
    /// @dev Throws if `_tokenId` is not a valid NFT. URIs are defined in RFC
    ///  3986. The URI may point to a JSON file that conforms to the "ERC721
    ///  Metadata JSON Schema".
    function tokenURI(uint256 _tokenId) external view returns (string);
}
```
</td>
</tr>
</table>
<br/>


Below is the example of the token metadata in JSON format, tokenURI should point to this data. In this example we modeled an NFT for a football player card, the metadata contains a URL to an image of a player, and a couple of attributes assigned to the token. Observant among you may have already noticed a link to an image hosted on the hns-cff.hr domain,  oh no. It’s completely valid to question the integrity of our NFT at this point, we promised you full control of your NFT, but then you find that someone else has full control of the essential part of the NFT - the digital asset it encapsulates. What happens when the owners of the hns-cff.hr domain decide they don’t want to host the image anymore a few months or even a few years after you received the NFT? They have the full right to do so, they don’t have any incentive to continue hosting the image for free. The NFT without the digital asset becomes just an id assigned to you in the smart contract, practically useless.

<table style="font-size: 0.75em; display: flex; justify-content: center;">
<tr>
<td style="max-width: 90vw;">

```json
{
    "name": "Luka Modric",
    "image": "https://hns-cff.hr/files/images/luka-modric.jpg",
    "attributes": [
        {
            "trait_type": "country",
            "value": "Croatia"
        },
        {
            "trait_type": "kit_number",
            "value": 10
        },
        {
            "trait_type": "position",
            "value": "midfielder"
        },
        {
            "trait_type": "captain",
            "value": "true"
        }
    ]
}
```

</td>
</tr>
</table>
<br/>


You might wonder why don’t just store all the metadata in the blockchain? Storing data in the blockchain is expensive, storing just 1MB of data to the Ethereum blockchain costs roughly 4 ETH which is, at the time of writing, equivalent to roughly $13,000. We won’t dig deeper into what is the reason behind this, but for anyone interested, a description of the Ethereum Virtual Machine (EVM) and its opcodes might be a good starting point. Nevertheless, don’t worry, we won’t stop here, there is a solution for the issue, this is where IPFS comes to save us.
<br/>

## IPFS

InterPlanetary File System is a protocol and peer-to-peer network for storing and sharing data in a distributed file system. It doesn’t sound like something that would solve our issues, but IPFS uses content-based addressing as opposed to location-based addressing which is a standard on the web today. If we look at the standard URL, let’s take an URL for the image of our football player as an example. Location-based addressing strictly defines on which domain is the image hosted, and where exactly is the image stored on that domain, in our example the domain is hns-cff.hr, and the image itself is located in the directory files/images/. Any change in either the domain name or the directory structure would result in this URL becoming invalid, alongside our NFT that depends on it.

![URL_example.png](https://strapi.suprabit.eu/uploads/URL_example_0846f7847b.png)


On the other hand, IPFS takes a completely different approach. As its name already says, content-based addressing addresses files based on their content. Imagine if the URL address for the image would be the hash of the image, it wouldn’t be convenient for humans as the URL wouldn’t be readable, and the links would be error-prone. But in our case we would greatly benefit from content-based addressing as we wouldn’t be vulnerable to any domain or directory changes, as long as someone has the original file, the URL can be resolved. Let’s try to check what would an IPFS URL look like. Content identifier (CID) is based on the hash of the file so for simplification, we can think of it just like a hash. A consequence of the CID is that any change in the file’s contents results in a different CID, which means that the file we are addressing with an IPFS URL is immutable. The file itself can be updated, but that would also update the CID so the original IPFS URL will point to the old version of the file. This is a great property for our use case, with IPFS CIDs we get addressing that preserves the integrity of the content.

![IPFS_URL.png](https://strapi.suprabit.eu/uploads/IPFS_URL_b99de9571f.png)

As IPFS is also a distributed file system, multiple peers in the network can host the same file, as the CID of the file would be the same there wouldn’t be any integrity violations. Multiple peers hosting the same file would only help others retrieve the file. If we try to retrieve the file from the peer that doesn’t have a file with that CID locally present, the peer will query neighboring peers if they have a file with that CID - this query propagates through the network until the file is found. A consequence of a peer-to-peer system is that the query for a file can take a long time to resolve as we need to propagate through the network until we find a peer that hosts this file.

Ok, now we know how to immutably address the metadata, but did we solve the issue if the original author stops hosting metadata? At least one peer in the IPFS still needs to host this file if we want NFT to work properly? True, at least one peer needs to host metadata for NFT to function, but now we at least have the ability to host data ourselves which is surprisingly easy as multiple cloud services offer us IPFS storage service - some of them even have free tiers that are more than sufficient to accommodate the storage of NFT metadata. This property comes from the fact that the metadata is not hosted by some server behind a domain, rather it’s hosted on IPFS, any IPFS peer should be able to find this file if at least one peer in the network hosts it.

You might be confused by some IPFS URLs looking like the example below. This link represents an HTTP gateway of an IPFS peer - ipfs.io in this example, it allows us to access IPFS files from the browser. You might wonder, didn’t we return to the beginning as we still need to use the HTTP gateway of some peer - what happens if that peer stops working? This is the exact reason why it’s strongly recommended to address IPFS files using ipfs://<cid> URL format as this allows consumers of that link to use any peer they want to access that file. We can even specify a list of IPFS peers that we use, so we have alternatives if one peer stops working.

![IPFS_peer_gateway_URL.png](https://strapi.suprabit.eu/uploads/IPFS_peer_gateway_URL_7970b8ebaf.png)


All in all, IPFS solves our issue of storing and linking metadata. Before deploying a smart contract we need to generate metadata, and media assets that will be linked with NFTs so that we can configure what the tokenURI method of the NFT returns. Below is the example of our metadata for one of our NFTs, we followed [OpenSea’s metadata format](https://docs.opensea.io/docs/metadata-standards#metadata-structure).

<table style="font-size: 0.75em; display: flex; justify-content: center;">
<tr>
<td style="max-width: 90vw;">

```json
{
    "name": "Suprabit Giant #0",
    "description": "This Suprabit NFT represents one of 100 unique frames of Suprabit Giant digital artwork.",
    "image": "ipfs://bafybeigp6cki2w7v26coqecxa5iohadhjg345n5b7ukkesbvq3kqeguvs4",
    "animation_url": "ipfs://bafybeig77wew3xfhejgatekmah5t46btoeteugaa2maynicyctl4zxwp6m",
    "external_url": "https://suprabit.eu/nft/giant/0",
    "attributes": [
        {
            "display_type": "boost_number",
            "trait_type": "Mobile",
            "value": 5
        },
        {
            "display_type": "boost_number",
            "trait_type": "IoT",
            "value": 10
        },
        {
            "display_type": "boost_number",
            "trait_type": "Blockchain",
            "value": 4
        },
        {
            "display_type": "boost_number",
            "trait_type": "AI",
            "value": 25
        },
        {
            "display_type": "boost_number",
            "trait_type": "Cloud",
            "value": 9
        },
        {
            "display_type": "boost_number",
            "trait_type": "Table Tennis",
            "value": 47
        }
    ]
}
```

</td>
</tr>
</table>
<br/>

The next step is to pick a blockchain network to where the NFT smart contract will be deployed to. As we used ERC721 which is an interface for Solidity smart contracts, we need to choose a network that supports Ethereum Virtual Machine (EVM). Naturally, Ethereum is the first network to be considered, but at the time of writing Ethereum’s high transaction cost due to high network traffic is not suitable for our case. Polygon is a few orders of magnitude more efficient than Ethereum at the moment so it was an easy decision to select it over Ethereum.
<br/>

## Minting

Lastly, we need to figure out an easy and intuitive way for users to claim their gifts. This is a hard task as the blockchain ecosystem introduced a new way of interaction with online services which is fairly complex for new users. We have to anticipate that a majority of users won’t even have a crypto wallet so we need to guide them through the whole process, not just the interaction with our smart contract. We utilized WalletConnect to help us connect users’ wallet applications with our NFT website where users redeemed their gift NFTs. The last thing we needed to do is to actually create and assign NFT to the user, this process is called minting. In order to mint the NFT, we need to call the smart contract and pass the token id we want to mint, and the address of the owner’s wallet. This operation is packed into a transaction that will require a small fee in order to be executed on the blockchain. As NFT is a gift we wanted to handle all minting fees ourselves which is why we created a small minting service that mints NFT at the user’s request - of course, we had to protect this service against unauthorized requests.

Along the way, we stumbled upon a hurdle of connecting a user’s wallet to the Polygon network which at the time of publishing NFT had to be manually configured in the wallet application, and this hurt the user experience a bit. Fortunately, this won’t be the issue for so long as there is already a [standard proposal](https://eips.ethereum.org/EIPS/eip-3085) that should fix this issue - the wallet applications just need to implement support for it.
<br/>

## Conclusion

To wrap it up, we successfully launched our first NFT and delivered it as a gift to our business partners and employees. It was awesome to hear positive feedback regarding the user experience of redeeming the NFT as we invested a lot of time to make it as easy, and as intuitive as possible. The general idea behind the gift was to give people first-hand experience with blockchain and introduce them to the concept of NFTs and help spark their ideas for NFT use cases. 

If you have any questions regarding this project, or if you are interested in various NFT use cases, and where can it be used in your field of work - feel free to contact us and let us give it thought together.



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Making of Suprabit NFT Giant

Even among cryptocurrency enthusiasts, non-fungible tokens (NFTs) aren't the most well-known or understood piece of the decentralized ledger system. 
NFTs may seem abstract and difficult to understand, but many applications for these tokens make them essential in the crypto space and beyond. If you're unfamiliar with this type of token, you came to the right place as this post breaks down everything you need to know about NFTs! Give it a read and discover what NFTs are and how they relate to blockchain and cryptocurrency technology.

### What are non-fungible tokens (NFTs)?

Blockchain and cryptocurrency are two buzzwords that have been thrown around for a while now. Although NFTs combine both of these emerging technologies, there's still a lot of confusion about what exactly they are. Keep in mind that even though the NFTs are based on the same blockchain technology as cryptocurrencies, they are not a currency. So let’s get right on it and let’s see what Non-Fungible tokens actually are.

The term non-fungible refers to something that another similar object cannot replace i.e they can only ever be replaced by themselves — or not at all. And that is precisely what makes them unique.  **A non-fungible token (NFT) is a one-of-a-kind digital asset that represents ownership of physical or virtual items such as art, video clips, music, and so on.**  

Simply put, NFTs are digital proof of ownership for any given item. NFTs are securely recorded on a blockchain — the same technology that lies behind cryptocurrencies — ensuring that the asset is unique. To shed some light on the whole thing, let’s have a look at some of the examples of NFTs.

![Picture2.jpg](https://strapi.suprabit.eu/uploads/Picture2_0e6539a5cb.jpg)
Source: [Instagram (@adamsackstoons)](https://www.instagram.com/p/CVK066CPshA/)

### Examples of NFTs

[Cryptokitties](https://www.cryptokitties.co/), [CryptoPunks](https://www.larvalabs.com/cryptopunks), [Rare Pepes ](http://rarepepedirectory.com/) are all examples of non-fungible tokens.  NFT was first introduced on the Ethereum blockchain protocol as a concept that allows you to mint and trade virtual assets that are unique, but now many other blockchains like Polygon, Cardano, or Kusama, to name a few, have also their own NFT implementations. 

Let’s have a closer look at Cryptokitties, digital cats that have unique genes. Think of them as crypto-collectables. Each is a one-of-a-kind digital asset built on Ethereum's blockchain and entirely owned by you. They can't be replicated, taken away, or destroyed. They can be, however, transferred from one digital wallet to another.

As defined by the Ethereum ERC721 standard, non-fungible tokens like Cryptokitties can be identified via a specific token ID - and only exist once within Ethereum blockchain. 

NFTs are today what football cards were back in the day - the latest collectables. While the latter was traded in person, NFTs are easily bought and sold online. Which, in turn, quickly made them a lucrative business. [The art world particularly profited from the sale of NFTs](https://www.nftsstreet.com/most-expensive-nfts-ranked/). Below are a few examples you probably heard about:

●	[Beeple](https://cryptoart.io/artist/beeple), a digital artist, sold the first purely digital work of art called "Everydays—the First 5000 Days" at Christie's for $69.3 million.
![Picture3.jpg](https://strapi.suprabit.eu/uploads/Picture3_2c5cd59b1e.jpg)
Source: [Wikipedia](https://en.wikipedia.org/wiki/Everydays:_the_First_5000_Days)

●	For $2.9 million, Twitter CEO auctioned off an NFT of his first tweet.
![Picture4.png](https://strapi.suprabit.eu/uploads/Picture4_4787a3af50.png)
Source: [Twitter (@jack)](https://twitter.com/jack/status/20?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E20%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.cnbc.com%2F2021%2F03%2F22%2Fjack-dorsey-sells-his-first-tweet-ever-as-an-nft-for-over-2point9-million.html)

●	At Sotheby's first curated NFT sale, a CryptoPunk NFT was sold for $1.8 million.
![Picture5.jpg](https://strapi.suprabit.eu/uploads/Picture5_d87e8575d8.jpg)
Source: [Twitter (@Sothebys)](https://twitter.com/Sothebys/status/1402996062474760193?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1402996062474760193%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fmarkets.businessinsider.com%2Fnews%2Fcurrencies%2Fcryptopunk-nft-covid-alien-draftkings-sothebys-auction-fungible-token-2021-6)

●	$208,000 was paid for 20-second footage of LeBron James' "Cosmic Dunk #29."

### How do NFTs work?
To understand NFTs, we could look at fungible and non-fungible items from a financial perspective. Today, most people think of cash as fungible—if I give you a $5 bill and you give me back another $5 bill, nothing really changed in terms of value as all the 5$ bills are the same. We don’t care about the dollar bill as a paper-based physical item, we care only about its value.
In contrast, collectables and antiques provide value as individual units; these kinds of goods aren't interchangeable with others with similar or even the same features (like dollar bills). 
Non-fungible tokens work on blockchains like Ethereum, but they are totally different blockchain assets with different features. 

### How are NFTs used?

There are three main ways NFTs can be used: as collectables, for identity, and ownership. 

**Collectibles** are non-fungible assets that can be owned and traded on NFT marketplaces. 

**Identity** refers to non-fungible personal information about an individual or business, such as educational history or employment background. 

**Ownership** refers to the possession of a physical or digital asset represented by an NFT. By trading NFT you’re actually transferring ownership of those assets. This could include things like real estate, art, intellectual property, etc. 

As time goes on, we will likely see many more creative uses for digital NFTs.

### Difference between cryptocurrency and NFTs

Cryptocurrencies and NFTs both rely on the same blockchain technology. As a result, NFT markets may also compel customers to use cryptocurrencies to acquire NFTs. 
Cryptocurrencies aspire to function as currencies by holding value or allowing you to purchase and sell items. Cryptocurrency tokens are fungible, and comparable to conventional currencies like the US dollar. 
On the flip side, NFTs are tailored to generate one-of-a-kind tokens that may be used to demonstrate ownership and communicate rights over digital products.

### Online exchange and marketplaces to buy NFTs

[OpenSea](https://opensea.io/) and [Nifty Gateway](https://niftygateway.com/) are widely known marketplaces to trade NFTs. With a user base of close to 2 million accounts on OpenSea, it is by far one of the biggest marketplaces for NFTs at the moment. 

**Foundation**: Foundation happens to be an NFTs marketplace, and in order to join the platform, a user must be invited by another user who is already a member.

**Nifty Gateway**: This is an art-focused NFTs marketplace that works with athletes, brands, and creators.

**OpenSea**: When you want to mention one of the largest marketplaces for a wide range of NFTs collectables, you can think about OpenSea.

**Rarible**: If you're looking for an art-focused NFTs platform, Rarible is an ideal choice that rewards members with its own token - RARI.  

### Key takeaways

When you think of cryptocurrencies, your mind surely jumps to Bitcoin and other alt-coins. But blockchain is more than just digital currencies; it's a protocol for creating unique data sets within a network that are time-stamped, cryptographically secured, and immutable. 
In other words, it is also about taking physical assets—diamonds, Picassos, gold, and digital assets like artwork and turning all of them into non-fungible tokens (NFTs). NFTs can be stored on an Ethereum or a number of other public ledgers. Each token would be identified by a unique ID number and tied to everything from value to ownership rights. 
In the future, the idea is that you'll have NFTs representing everything from your passport, driver's license, game collectables, real estate ownership, you name it! So, is there any reason we shouldn't extend the concept of NFT beyond its borders? We think not! Stay tuned and wait to see what the Suprabit team has been working on.

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We want you to enter the world of non fungible tokens! A new type of blockchain based asset is taking some of the well established markets by storm. Find out why and what is our stake in it.