Understanding NFT Smart Contracts: A Guide

NFTs, primarily reside on the Ethereum blockchain and are executed using the smart contracts functionality. Smart contracts are pre-defined agreements automatically executed when certain conditions are met. In simple technical language, smart contracts are programmable if-else statements that make the action take place, eliminating the need for third parties.

NFTs, when combined with smart contracts, result in – NFT Smart Contract.

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What is an NFT Smart Contract?

An NFT smart contract includes details of the creator of the NFT, parties entitled to royalties each time the NFT is sold, and the ownership history. These could work in two ways. NFTs could be embedded within smart contracts and vice-versa.

Assume NFTs are embedded within smart contracts. In this scenario, a smart contract can own the NFT within it and transfer it to another user based on the conditions defined in the contract.

Alternatively, smart contracts could be within an NFT. For instance, in music NFT, a song may be embedded in the NFT through a smart contract. The user or another smart contract would agree to the conditions, pay the fee, and get access to the song. This is what happens behind the scenes when users hit the ‘Play’ option in a music application.

Besides simplifying and speeding up the process, these smart contracts offer a high degree of transparency, security, and immutability.

Examples of NFT Smart Contracts

These contracts offer a multitude of use cases, some of which include —

Gaming: Games and their tournaments could be governed by smart contracts and NFTs. For example, a player’s in-game items and tools could be lying within NFTs. Through smart contracts functionality, the players agree on which assets of competitors in the games go to the winners at each round.
Streaming: Movies or television episodes could be embedded within NFTs. Smart contracts can make the users or viewers agree to the payment conditions and, once done, could give them access to those movies or shows for a specific duration.
Artwork: Artists can convert their masterpiece into a digital asset like NFT. The terms of use and payment details could be written in a smart contract. The art galleries could showcase the artwork at physical locations, and the revenue earned could be divided among the parties, as, the creator might receive a royalty based on the conditions specified in the smart contract.

How to create an NFT smart contract?

A lot of technicalities are required when you have to create an NFT smart contract. However, tools are available to those who do not have a blockchain development background. Let’s explore these first.

Some low-coding tools, such as Minty or NiftyKit, are useful in this regard. These intermediaries handle the technical stuff on your behalf.

Once you sign up, from your profile page, you will be asked to provide specific details such as:

Main Photo
Image
NFT Collection name
Custom Description

It is a simple process. Once done, you can start uploading your NFTs and their brief descriptions.

How to deploy NFT Smart Contract?

You will be charged a fee for deploying your NFT smart contract on middleware like NiftyKit. This includes the smart contract tied to your MetaMask wallet that you connected to the platform. Then, the smart contract will be visible on marketplaces such as Opensea.

The best advantage is you pay a one-time fee. However, you can move your smart contract to other NFT platforms, provided it can be imported.
Adding NFTs to the smart contract–
Once you have deployed the smart contract, you can add and mint NFTs. You can mint NFTs as per the requirements of customers.