THE FLRDROPS ARC:
Before we get into Wrapped NFTs, let’s take a quick look into wrapped tokens as there are similarities in the ways in which wrapping expands their capabilities.
The best example of a wrapped token is wrapped ether (WETH), but seen as though Flare utilises the Ethereum Virtual Machine (EVM), we can substitute ETH for SGB or FLR as a more familiar example. SGB is the native token of the Songbird network and it is required to pay transaction fees. Beyond that and trading, it’s use is pretty limited.
The ERC-20 standard is a technical standard for issuing tokens like EXFI and SFIN on the Songbird Network. This token standard isn’t compliant with the native token standard for SGB, so providing liquidity to an SGB/EXFI LP smart contract would not be possible. To make SGB ‘smart’, it needs to be wrapped into the ERC-20 token standard to become compatible with ERC-20 tokens issued on the network. Essentially, wrapping a token is converting its interaction standards for another set of standards.
Wrapped NFTs can also expand NFT utility and functionality beyond that which is offered by the ERC-721 token standard and that of the Composable ERC-998 standard. The ERC-4799 standard enables designating ownership of a Wrapped NFT to someone else while the original NFT is held in escrow via smart contract. Similar to that of SGB when you wrap it, SGB is held in a smart contract and you are presented with a wrapped version of it which can be utilised in many more ways.
This enables the introduction of additional functionality to pre-existing NFTs, without having to give up the authenticity of the original. In effect, this means that all NFTs are composable and can be rented, used as collateral, fractionalized, and more.
Where NFTs are concerned, digital art may have the initial limelight, but each new token standard acts like a key which opens up into a corridor. Each new door presents new opportunities and use-cases for many different sectors — which may be flying under the radar, but it seems to be the digital art world who are constantly pushing those boundaries.