Non-fungible tokens or NFTs have gained much popularity in recent years. It has made the dream of owning an asset come true. A person can gain ownership of an asset that could be artwork, virtual, or even physical items using NFTs. As the name suggests NFTs refer to tokens that cannot be replaceable and these tokens cannot be exchanged with anything else.
Nowadays most creators, collaborators, and investors have largely embraced non-fungible tokens. NFTs of a specific digital asset are stored on the blockchain network for extreme security. Even though NFTs offer many positive benefits, they are also prone to various challenges and restrictions. Autonomous NFTs were created to resolve this issue and make the NFTs fully potential.
The article aims to introduce Autonomous NFTs and their uses. The further section of the article includes the pros and cons of Autonomous NFTs to understand the concept in a better manner.
What Are Autonomous NFTs?
Autonomous non-fungible tokens are a type of NFTs that does not need the help of human interventions to carry out their functions. They can operate and function according to the predetermined conditions. Autonomous NFTs are powered by smart contracts which is why they are also called smart NFTs. In many ways, they are more beneficial and effective than NFTs.
Nowadays, most creators and investors have started choosing autonomous NFTs because they require less effort. An autonomous NFT is programmed to perform the function of selling itself when the market prices are up to the expectations.
One of the main reasons why autonomous NFTs became a favorable choice for many investors is that it redistributes a portion of value to the original owner of the asset.
Autonomous NFTs have been gaining much popularity because of the functions they are able to carry out without the help of human intervention. They have also been considered as one of the suitable ways of enhancing decentralized applications.
Working Mechanism Of Autonomous NFTs
Smart contracts are considered the magic source that powers and operates autonomous NFTs. The smart contract technology allows aNFTs to function according to the predetermined rules and conditions. Smart contacts are automatically deployed in the blockchain network while an NFT is created.
They enable autonomous NFTs to perform various tasks and functions like accurate decisions or transfer ownership. In traditional NFTs, all these functions are carried out by humans themselves. In the case of autonomous NFTs, the work becomes much simpler.
Smart contracts even allow autonomous NFTs to interact with the blockchain network on which they were created. In simpler terms, smart contracts can be considered like a rule book that directs the functions of aNFTs.
Uses Of Autonomous NFTs
Token Farming: Autonomous NFTs are one of the most essential ways to generate new tokens. A large number of tokens can be generated in a single day by creating an aNFT.
Decentralized Autonomous Organizations (DAO): Autonomous NFTs can be used as governance tokens that help users propose their ideas or opinions in the decision-making process of a project.
Collateral: In Decentralized Finance (DeFi) ecosystems, aNFTs can be used as collaterals for taking loans. aNFTs are programmed to sell themselves according to the market prices.
Royalty Payments: Digital creators often program smart contracts of autonomous NFTs to automatically pay the original creators or artists when certain conditions are met. This is one of the most common uses of autonomous NFTs.
Pros And Cons Of Autonomous NFTs
Pros
- Autonomous NFTs automate the process without the need for any human interventions. They are also capable of making accurate decisions which are vital in complex processes like crypto trading.
- They are programmed to remain flexible and perform many functions. This offers them a wide range of opportunities.
- As autonomous NFTs are created and operate on a secure blockchain, the duties they carry out remain transparent and can be publicly checked.
- They are less vulnerable to security threats and hacking attempts as they operate on blockchain networks with advanced protocols.
Cons
- People need to have technical knowledge to understand and use the technologies of autonomous NFTs. technical knowledge is vital in being able to program smart contracts.
- In most cases, autonomous NFTs might require custom back-end applications. These applications might not be easily available to everyone thus causing a barrier.
Conclusion
It is true to say that autonomous NFTs played a major role in transforming the NFT ecosystem. Compared to the traditional NFTs, autonomous NFTs are much more beneficial. It uses advanced smart contract technologies that enable the NFTs to work by themselves without the help of humans. Autonomous NFTs have much more utility compared to the traditional NFTs.
Apart from utility, they are much more transparent and secure than the latter. Autonomous NFTs play a promising role and have the capability to influence larger blockchain networks and markets.
