Article: risks of using cNFT

seriybeliy11 commented 3 months ago

Summary

This article explores the unique risks associated with using compressed NFTs (cNFTs) compared to standard NFTs. It begins by explaining the basics of NFTs and cNFTs, followed by an overview of the specific risks of cNFTs, including complexity, security vulnerabilities, regulatory uncertainties, and market liquidity concerns. The article provides strategies for mitigating these risks, emphasizing the importance of due diligence, collaboration with experienced partners, robust security measures, and continuous monitoring of the regulatory landscape. By understanding these risks, investors and enthusiasts can make informed decisions in the rapidly evolving NFT market.

Context

The rapid growth and popularity of non-fungible tokens (NFTs) and their various forms, such as compressed NFTs (cNFTs), have attracted significant attention from investors and enthusiasts alike. As a result, investment funds are increasingly exploring opportunities in the NFT market to diversify their portfolios and capitalize on this emerging trend.

To make well-informed investment decisions and effectively manage potential risks, it is crucial for funds to understand the unique risks associated with cNFTs. By creating or improving educational materials on this topic, investment funds can gain a deeper understanding of the complexities and risks associated with cNFTs, enabling them to:

Identify promising investment opportunities in the NFT space.
Develop strategies to mitigate risks and protect their investments.
Stay ahead of the curve in the rapidly evolving digital asset landscape.
Provide valuable insights and guidance to their clients and stakeholders.

In summary, creating or improving materials on the specific risks associated with using compressed NFTs (cNFTs) is essential for investment funds to navigate the complex NFT market, make informed decisions, and ensure the success of their investment strategies.

Learning goals

Upon consuming the educational materials on the specific risks associated with using compressed NFTs (cNFTs), consumers will learn:

Fundamentals of NFTs and cNFTs
Understand the basic concepts, functionalities, and differences between NFTs and cNFTs
Identify and comprehend the unique risks related to cNFTs, including complexity, security vulnerabilities, regulatory uncertainties, and market liquidity concerns
Learn how to mitigate risks through rigorous due diligence, collaboration with experienced technology partners, implementation of robust security measures, and continuous monitoring of the regulatory landscape
Develop the ability to weigh the potential benefits and risks of cNFTs, enabling consumers to make well-informed investment decisions in the NFT market.

By achieving these learning goals, consumers will be better equipped to navigate the complex world of NFTs, particularly cNFTs, and make informed choices regarding their investments and participation in the digital asset ecosystem.

References

http://blog.ton.org/understanding-compressed-nf-ts-on-the-ton-blockchain

Estimate suggested reward

500 USD in TON

ProgramCrafter commented 3 months ago

Thinking through the topic will show why the point of article is moot.

seriybeliy11 commented 3 months ago

@ProgramCrafter

The article's purpose is to educate and inform readers about the unique risks associated with cNFTs, ultimately enabling them to make more informed decisions in the rapidly evolving NFT market. Therefore, the point of the article is not moot but rather serves as a valuable resource for those interested in the NFT space 🙌🏻

and please help us release this material so it will be useful

Etimfon007 commented 3 months ago

Hi @seriybeliy11 is this assigned to anybody yet?

I'll like to take it up

seriybeliy11 commented 3 months ago

@Etimfon007

Already written, will release the material as early as this week, sorry, would like to do this assignment myself. Thank you for the offer🙌🏻

But I think we need to do a detailed review of the smart contract on cNFT. We can do this task together.

@delovoyhomie do you think we can accomplish this task in a separate bounty?

Etimfon007 commented 3 months ago

@Etimfon007

Already written, will release the material as early as this week, sorry, would like to do this assignment myself. Thank you for the offer🙌🏻

But I think we need to do a detailed review of the smart contract on cNFT. We can do this task together.

@delovoyhomie do you think we can accomplish this task in a separate bounty?

Okay.. depending on what @delovoyhomie says then we can move on from there although I'm not deeply rooted in smart contracts

seriybeliy11 commented 2 months ago

@delovoyhomie

The team is checking the material now, will we be able to confirm the application? This will help the user to become more familiar with the new standard

delovoyhomie commented 2 months ago

https://blog.ton.org/the-cnft-standard-and-associated-risks

ProgramCrafter commented 2 months ago

This article is wrong on factual level.

Another attack method involves exploiting the fact that ‘virtual’ tokens are not yet recorded on the blockchain. An attacker could alter a token’s metadata, such as its name, description, or image, misleading users into thinking they own a different token. Since these tokens aren’t on the blockchain, users can’t verify their authenticity, increasing the risk of scams.

Attackers cannot do so, for doing that would change hash of Merkle tree.

Additionally, if an attacker gains access to the system storing the ‘virtual’ tokens, they could alter or delete information about them. This could lead to users losing their tokens or facing other security issues.

To losing, yes. Should users keep the root hash (or collection contract address, as it uniquely determines NFTs list), other issues simply cannot arise.

... This new standard will help speed up the launch of new collections and reduce maintenance costs. However, although we are committed to ensuring compatibility with popular ecosystem apps and wallets, the cNFT standard may carry unknown risks as it is a new solution.

Wait, unknown risks? Wasn't the article supposed to enumerate all risks?

I'd say the following: cNFTs have risk of being lost (whether due to centralized storage, system outages or whatever), or of not fitting into blockchain due to their size if someone created them in a wrong way, and there simply isn't anything more to go wrong.

seriybeliy11 commented 2 months ago

@ProgramCrafter

Yes, you're right, my mistakes🙌🏻

I agree that there are some shortcomings in my material, since I lacked a little deeper knowledge to understand

Thank you for helping me figure it out and correct the errors.

I'll keep it on mind.

chiliec commented 1 month ago

Both articles is 404 and topics are closed🤔

ton-society / grants-and-bounties