Recently, Polygon published an article on the X platform introducing "Smart Cat Loot", the first asset-backed xNFT issued by Smart Layer on Polygon, which sold out within 4 hours of its launch.
What is xNFT? Its full name is Executable NFT, which means that in addition to being an asset, it also has built-in executable code. Compared with traditional NFT, it has high practicality and stronger scalability; similar to it, there is Executable Token, which has the same characteristics.
"Smart Cat Loot" adopts an innovative "Burn and Return" mechanism and dynamic pricing strategy. NFT holders can burn their NFTs at any time and recover the casting cost. In addition, as the secondary market transaction volume increases, the recycling price will also rise accordingly.
The above Smart Cat Loot features are implemented based on Ethereum standards ERC-5169 and TokenScript. ERC-5169 allows tokens to be linked to external scripts, turning them into multifunctional assets. TokenScript is a programming interface for tokenization that abstracts the information, access methods, and UI presentation of tokens, providing a higher-level interface that greatly improves the circulation and integration capabilities of tokens. In addition, TokenScript allows developers to define the characteristics and operations of their tokens, such as transferability, which helps achieve interoperability between tokens without having to update DApps or smart contracts.
In short, Smart Layer has greatly improved the scalability of assets through the Executable Token/NFT launched by ERC-5169 and TokenScript technology, which not only improves the user experience, but also brings a new paradigm for asset development, distribution and application, aiming to bring innovation to the production and consumption paths of DeFi, brand Loyalty and Web3 games.
1. New answers to application distribution and management
In common Web3 scenarios, end users often need to face a wide variety of DApps. Especially when migrating to new chains or facing new asset types, users face a series of problems throughout the entire cycle:
Assets are only a medium of payment and circulation. The circulation event itself usually needs to be completed with the help of other applications and markets. These DApps need to be developed for assets and usually require extremely high customer acquisition costs to distribute DApps to users.
For new applications, users need to pay the cost of searching and learning. Especially now that Google phishing websites and X platform fake accounts are frequent, inexperienced users are easily deceived by various phishing scams;
Users are faced with post-management issues, including asset management and security risk prevention. When users have assets on dozens of chains, and each chain needs to save at least one swap, loan, or cross-chain application, the management cost rises exponentially.
Executable Token/NFT represents another lower-cost and more direct way to solve the above problems:
By directly building basic needs such as Earning and Swap into assets, as well as other more distinctive functions, users and applications are naturally connected, and the information cost is extremely low;
The application no longer needs to be adapted to multiple terminals. Users can perform the required operations directly in the wallet, which reduces the development and learning costs at the same time.
In addition, the program written by the project party is built into the assets, which means that users no longer need to check the accuracy of DApps and manage batches. What you see is what you get, and you can use it whenever you want.
2. Leading a new asset paradigm
Smart Layer has created a unique solution based on TokenScript technology, Executable Token, which can solve the integration, privacy and trust challenges in the digital environment. Executable Token not only carries information, can represent a wide range of assets and rights, but also has rich features and can perform complex interactions with other tokens and systems (i.e. the Executable Token/NFT features mentioned above).
Let’s experience the charm of Executable Token with an official case:
Users can create a token for a specific car based on the unique identification of each country, which represents the user's ownership of the car;
Users with the right to use the car can unlock the corresponding functions of the car, such as using the digital key to start and lock the car, obtain the vehicle's location and vehicle status data, and other real functions;
Third-party companies can obtain relevant vehicle open information. For example, insurance companies can more accurately and cost-effectively determine whether users have vehicle insurance needs, thereby reducing customer acquisition costs and communication costs with users.
For ownership, the user's transaction method can become highly standardized. Developers can connect to the vehicle attributes that users care about most when designing the token, making online purchase decisions more effective. Transaction events can also be connected to official systems (such as the vehicle management office), eliminating the time required to complete various procedures;
Similarly, vehicle ownership digitized using Executable Token can perform various operations on the chain, such as lending funds on NFT lending platforms and using fragmented protocols to split and share ownership, greatly improving the practicality and utilization efficiency of assets.
Taking the RWA (Real World Assets) concept that was popular in 2023 as an example, the RWA project is to create a special purpose vehicle (SPV) for real estate, securities, stocks and other items, and then distribute them through tokenization.
For bond products, the revenue model and data are relatively simple, and the traditional ERC 20 design can also complete the asset association and income distribution, but more complex underlying assets such as real estate require completely different technical implementations. For example, all real estate operating income and costs are different, and asset buyers need to understand multiple layers of complex data such as geographical location, housing conditions, and operating conditions. Assets also involve multiple taxation issues. If they still rely on manual off-chain coordination, management, and calculation, and then finally pass them to on-chain assets, the cost is high and the meaning of RWA is lost. Through ERC-5169 and TokenScript, access to technologies such as edge computing, off-chain and on-chain data can be cross-checked in real time, accurately, and effectively.
In summary, Executable Token provides a new asset development and application model, provides the corresponding underlying technical foundation, and allows the full use of the characteristics and advantages of Web3.
3. Reshape the production and consumption paths of brands and users
As mentioned above, the unique solution provided by Smart Layer can break down information silos, reshape the relationship between brand service providers and users, and fundamentally change the production and consumption path between the two:
It solves the problem of finding users accurately, and the user consumption footprint is clearly visible. Brands can conduct business analysis based on accurate data and accurately match services with target users.
Open, permissionless delivery means that project owners will focus more on product quality. On the basis of a clear user group, only better services can attract users. Especially in the Web3 model, the user switching cost is extremely low. Only projects that continuously and proactively provide users with sufficient value can maintain user stickiness.
For example, SushiSwap's vampire attack on Uniswap and LooksRare's attack on OpenSea. The former once threatened Uniswap's position and forced it to undergo major changes and development, while the latter's products and services failed to subvert OpenSea and quickly declined after its heyday.
ERC-5169 promoted by Smart Layer links assets to external scripts, eliminating the problem of on-chain operations being too expensive for some users and making it more conducive to large-scale adoption.
This transformed relationship, called Open Loyalty, is designed to further leverage the advantages of Web3 and drive new narratives and developments in the market.