- IOTA introduces Native Assets and NFTs on Layer 1.
- Layer 2 Assets can be created within Smart Contracts for enhanced versatility.
Introducing Native Assets on IOTA
Layer 1 Assets, also known as “Native Assets,” can now be created with the IOTA tokenization framework. This allows for the creation of NFTs and new tokens on Layer 1 using new output types. Native assets can be transferred on the Tangle without fees and between different smart contract chains.
Creating Native Tokens in Shimmer
In Shimmer, users can create Native tokens out of thin air as long as they fulfill the storage deposit. These native tokens can have various types of metadata. Some interesting Tangle Improvement Proposals (TIPs) related to native tokens include TIP-30: Native Token Metadata Standard and TIP-33: IOTA Public Token Registry.
NFTs: Unique Digital Assets
First introduced on the Ethereum blockchain with the ERC-721 standard, NFTs are unique and verifiable tokens used to prove ownership of digital goods. NFTs have many use cases, including digital art, in-game assets, event tickets, DeFi applications, voting in DAOs, and Metaverse objects. TIP-27 focuses on IOTA NFT standards.
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Exploring Layer 2 Assets and Asset Wrapping
Layer 2 Assets, created within Smart Contracts, can be minted out of thin air without needing a base token. For the Wasm VM, there are ERC721 Standards implemented in Rust, Go, and Typescript. EVM Assets can be used in the IOTA Smart Contract EVM Chain, utilizing the OpenZeppelin Smart Contracts library.
Asset wrapping, as mentioned in the IOTA tokenization framework specifications, allows a smart contract that handles Layer 2 tokens to wrap its tokens into a native asset and unwrap Native Assets (Layer 1) tokens into Layer 2 representations. This enables sending assets across both Layer 1 and Layer 2 chains. To send Layer 2 assets to another chain, they must first be wrapped as a native Layer 1 asset.
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