xNFTs are critical to powering decentralized EVM services, says Mathew Sweezey, Chief Strategy Officer at Smart Layer.
Posted: February 12, 2024 10:16 AM Updated: February 12, 2024 10:16 AM
Correction and fact check date: February 12, 2024, 10:16 AM
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Mathew Sweezey, Chief Strategy Officer of Smart Layer Network, shared how ERC-5169-backed xNFTs can transform digital and physical experiences.
Decentralized service network Smart Layer Network (SLN) recently surpassed 3 million tokens and 10 million blockchain transactions. Additionally, SLN’s growth has been significant, starting with its proof-of-concept Smart Cats, which recorded 2.62 million transactions on Polygon over the past seven days.
Moreover, this trading volume surpassed other popular platforms such as Base and Optimism during the same period. Smart Cats has been the #1 dApp on Polygon for the past 60 days.
Smart Layer also introduces an ERC404 optimization implementation that merges ERC-5169 and TokenScript into ERC404 tokens. This enhancement simplifies ERC-20 and ERC-721 token transfers for holders, providing improved visibility and control. It also provides tokenization versatility by facilitating advanced features such as ERC404 membership and accounts.
@SmartLayer Improvements announced #ERC404 An implementation that enhances security and UX while expanding use cases beyond collectibles.
The enhancements build on ERC404 V2 and integrate ERC-5169 and TokenScript as token frontends to ERC404 tokens.
It will give…
— Smart Layer (@SmartLayer) February 12, 2024
Mathew Sweezey, chief strategy officer at Smart Token Labs, which is building a smart layer network on infrastructure for viable tokens on EVM-compatible chains, said in a conversation with Metaverse Post that as token utility explodes in the next few years, all EVM chains will be A decentralized service network is needed to host and process large amounts of off-chain data, logic, and functionality.
He claims that this is being enabled by ERC-5169 and the concept of executable NFTs (xNFTs).
“ERC-5169 facilitates decentralized services for hosting and processing off-chain data and logic by enabling executable tokens (xNFTs) that integrate on-chain and off-chain data. Polygon’s game, Smart Cats, exemplifies this revolution by embedding gameplay directly into tokens, increasing utility and value while providing a seamless user experience,” Sweezey told Metaverse Post.
He added that executable tokens enabled by protocols such as ERC-5169 are revolutionizing digital and physical experiences by facilitating the integration of smart contracts in a variety of web scenarios. It provides tokenized representation of rights and services, enabling endless possibilities beyond the limitations of centralized systems. The real change comes in embedding utility into tokens, making them not just assets, but self-contained applications.
By combining on-chain and off-chain logic, the company aims to improve the practical applicability of tokens, making them a part of everyday life. The token becomes a tool for direct communication, providing comprehensive price discovery and enabling its own interactive experiences.
Executable tokens could revolutionize digital and physical interactions
Executable tokens can operate independently to carry data and instructions, enhancing user-centric interactions across digital and physical realms. It could integrate a variety of services to streamline experiences like travel, potentially hinting at a future where users control digital interactions enhanced by AI.
“Executable tokens can automate processes and improve user experiences across industries by managing interactions based on embedded data and instructions,” Sweezey told Metaverse Post. “For example, automotive tokens can streamline ownership processes such as unlocking and tracking, while tokens in other industries can streamline supply chains, strengthen identity verification, automate royalty payments, and improve pharmaceutical tracking.”
It is important to understand that in a token-centric ecosystem, the elimination of intermediaries and integration of transactions offers significant advantages.
Sweezey explained this aspect: “To overcome privacy, compliance, and scalability issues, smart tokens distribute logic between user agents and server-side logic. “This creates new opportunities to program tokens in a way that protects privacy and optimizes functionality at scale.”
“The smart layer network ensures operational integrity through continuous uptime, redundancy, and load balancing, while managing the lifecycle of smart tokens and maintaining user privacy and security.”
Viable tokens can also reshape financial markets by introducing new asset classes and investment strategies that focus on intrinsic utility rather than speculative value. Tokenizing existing assets can provide benefits such as real-time asset management, enhanced liquidity, regulatory compliance, and democratizing investment access.
According to Sweezey, executable tokens can help usher in a new era of interactive experiences.
“Executable tokens are self-referential. That is, it contains its own data, user interface, and instructions for interaction and programming within the token itself. This allows us to interface directly with everything around us, effectively connecting the digital and physical realms,” he told Metaverse Post.
“For example, there are brands like BMW that are already considering digital twins of their vehicles, so they can bring their actual IRL vehicles into the virtual world. “This expands the definition of ownership and layers of new opportunities for interaction within digital experiences.”
Therefore, it is undeniable that xNFTs can anchor digital assets to physical assets, enriching user experience through dynamic content creation and real-world interactions.
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About the author
Kumar is an experienced technology journalist specializing in the dynamic intersection of emerging fields including AI/ML, marketing technology, cryptocurrency, blockchain, and NFTs. With over three years of experience in the industry, Kumar has established a proven track record in crafting compelling narratives, conducting insightful interviews, and providing comprehensive insights. Kumar’s specialty is producing high-impact content including articles, reports and research publications for prominent industry platforms. With a unique skill at combining technical knowledge and storytelling, Kumar excels at communicating complex technical concepts in a clear and engaging way to diverse audiences.
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Kumar is an experienced technology journalist specializing in the dynamic intersection of emerging fields including AI/ML, marketing technology, cryptocurrency, blockchain, and NFTs. With over three years of experience in the industry, Kumar has established a proven track record in crafting compelling narratives, conducting insightful interviews, and providing comprehensive insights. Kumar’s specialty is producing high-impact content including articles, reports and research publications for prominent industry platforms. With a unique skill at combining technical knowledge and storytelling, Kumar excels at communicating complex technical concepts in a clear and engaging way to diverse audiences.