Let’s explore how harnessing the power of metadata can upgrade our relationship to truth by imbuing onchain assets with meaningful ancillary data.

If harnessed correctly, non-fungible serial numbers + truthful metadata can shift the fundamental power balance of who keeps track of the world’s assets from corruptible ledgers to the blockchain.

• If NFTs are just: serial numbers pointing to something important on the blockchain..

• And Metadata is: the structure of what the serial number is being pointed to..

• Then the amount of valuable $things$ NFTs can represent becomes nearly $infinite.$.

--

The question is - what does a serial number on a blockchain really represent? A meaningless picture of the Mona Lisa? Or ownership of the real Mona Lisa?

1. What is Metadata?

Sure your AI overlord can go to Wikipedia and read that metadata is “data that provides information about other data" for you. To help you understand, they can give you examples of Metadata, perhaps tuned to your unique tastes. Alas, today you are stuck with a regular human author and will get un-optimized examples.

In the context of photography,

• we have the actual photo itself, then we have the date it was taken, kind of camera and lens, possibly GEO location data.

This ancillary data exhaust surrounding the photo imbues it with meaning. With trusted metadata we know this photo was made by a real camera, and not a Midjourney simulacrum.

How about for an automobile?

• We have the car itself, but then we have ancillary data points like.. how many miles are on the odometer, when was the last oil change, does it smell like cat pee, was it ever in Florida during hurricane season, etc.

Is butterfly taxonomy, crochet needles, footage of the moon landing, or vintage espresso machines more your thing? Those have metadata too and can all benefit from truthful expressions of metadata!

Structure

The basic structure of metadata is then as follows:

Source valuable thing: photo, car, house, medical device, carbon credit, salad spinner, insurance policy, stock certificate.

+ancillary data that gives the source valuable thing meaning. Some examples we have discussed in previous articles include:

• Medical devices: Date of manufacture, FDA approval number, instructions for use

• Carbon credits: Geolocation of where reduction is happening, 3rd party audit report PDFs, updates to the project over time

Format

In NFT world as in the real world, we demand standards! If everyone structures their metadata willy-nilly, how will the machines be able to parse and interpret metadata in a universal way?

All that’s on the blockchain for most NFTs is the serial number itself plus a link somewhere (usually AWS). Special, forward thinking NFT collections sometimes write all of the metadata directly on chain. This however is very expensive and harder to code.

The most typical format for NFTs is thus:

1. A smart contract (0xSOMETHING) as an organized collection of serial numbers

2. A unique ID (0xSOMETHING:1) the serial number itself that can be uniquely “owned” aka registered to a blockchain account.

3. A Uniform resource identifier (URI) that points to a location on the internet where the metadata lives for that particular unique ID.

This is my Coolcat.

There are many like it, but this one is mine.

This is what the metadata for my Cool Cat looks like.

{"description":"Cool Cats is a collection of 9,999 randomly generated and stylistically curated NFTs that exist on the Ethereum Blockchain. Cool Cat holders can participate in exclusive events such as NFT claims, raffles, community giveaways, and more. Remember, all cats are cool, but some are cooler than others. Visit [www.coolcatsnft.com](https://www.coolcatsnft.com/) to learn more.","image":"https://ipfs.io/ipfs/QmfF6DNsXuTa3MyoghVm5HRV4tiA2U5zzh7HUtb2EnP8de","name":"Cool Cat #5870","attributes":[{"trait_type":"body","value":"blue cat skin"},{"trait_type":"hats","value":"beret green"},{"trait_type":"shirt","value":"robe red"},{"trait_type":"face","value":"rich"},{"trait_type":"tier","value":"cool_2"}],"points":{"Body":0,"Hats":1,"Shirt":1,"Face":2},"ipfs_image":"https://ipfs.io/ipfs/QmfF6DNsXuTa3MyoghVm5HRV4tiA2U5zzh7HUtb2EnP8de","google_image":"https://drive.google.com/uc?id=1l3dJYjnXH9oOI6koNK3iDKL45sJNss6M"}

I know I am the owner of the monocle + beret Cool Cat because:

• this section of the smart contract says so where,

• ID 5870 points to: api.coolcatsnft.com/cat/5870. aka the Uniform Resource Identifier

As long the creator of the metadata links to a .JSON file in this format (Description, link, image, name, attributes) the NFT will render properly on the Opensea marketplace.

As Opensea is the $13 billion ($1.4 billion) head honcho and chief equity-play-without-a-token in the space, most other marketplaces also recognize their format, thus making it a “standard”. Time will tell if metadata is managed by a private corporation or more egaletarian DAO structure.

Value

Why does any of this matter?

All an NFT is doing is proving that a serial number inside of a certain (smart contract) points to a certain JSON file containing a description of said serial number.

If the contract is:

• etherscan.io/address/0xbc4ca0eda7647a8ab7c2061c2e118a18a936f13d

congratulations! You have real Bored Ape worth tens to hundreds of thousands of fiat dollars.

If the contract is:

• etherscan.io/address/0xbc4ca0eda7647a8ab7c2061c2e118a18a936f13E

apologies - that has no value

Either contract of course could point to the identical metadata. As downloading JPEGs and making a new NFT smart contract is trivially easy.

What matters is the intention and value ascribed to the serial numbers. Bored Apes are valuable because people agree they are, and Yuga Labs the parent company provides legitimacy. Thus we can all agree the smart contract ending in D is worth tens of thousands of dollars, and the contract ending in E is worth nothing.

For NFTs to be valuable to enterprise. The attestation that an NFT represents something valuable needs to be proven in the metadata, then backed up in the real world.

--

2. Metadata for Enterprise

As long as the blockchain stays immutable, the serial number remains immutable, and the link to the metadata remains immutable - the object itself can retain its value.

This means we can TRUST that the serial number really represents the underlying value. Beyond that, we can now control ownership of valuable things using the blockchain.

Effectively, the identical set of machinery we currently use to move around monkey and cat pictures, can be used to move around real things in the real world. While actors like Jamie Dimon want you to use their proprietary pseudo-blockchain, we all know in our heart-of-hearts the better solution technically and morally is using an open source standard like Ethereum.

“Open” Metadata Standard

On an open source network like Ethereum, an ad hoc open standard is developing around the Metadata structure proposed by Opensea.

Their format demands each NFT serial number point to a JSON file formatted with the following data structure:

• Description: A sentence to small paragraph description of what-thing-is.

• External_URL: A link to a private website home for the thing.

• Name: Self-explanatory

• Image: A reference to what the object looks like. For photography. This is the link to photo. For a product, the key image. For a person, their headshot perhaps.

• Attributes: An arbitrarily complex format to represent any tabular data. We’ll come back to this one.

Let’s see how this plays out in the real world with a proto-RWA example.

Proto-Real Estate

On June 22nd, 2022, an enterprise commercial real estate firm placed this enormous structure for sale on Opensea.

In the metadata, we can see basic traits about the building.

While a crude implementation, this proves people in the real world are thinking about imbuing NFTs with real world value. If the sale ever consummated, Opensea would be due their 2.5% marketplace fee.

At scale Opensea would have inadvertently created Web3 CRE Zillow.

In fact, we’ve posited before the basic architecture of a Web3 2-sided marketplace can be applied to every single Web2 version of a 2-sided marketplace. Houses, sneakers, babysitting, dog grooming, handymen, you name it and there is a Web3 disruption waiting to happen in the wings.

Long live spreadsheets

We all know and love the cheeky wit of Godwin’s Law:

• when a Hitler comparison is made, the thread is finished and whoever made the comparison loses whatever debate is in progress

So how about Clippy’s Law (named after the titular 90s microsoft office helper):

• If presented with a pile of unstructured data, the best way to organize it is with a spreadsheet.

Tables are amazing.

• An X/Y representation of any unique attribute (usually a column) with rows describing what those attributes are

has helped everyone from the Medicis, to the Rothschilds, to probably even Monsanto take over the world. Thus to expand the Metadata format to any real world asset.. we just need more columns!

Carbon Spreadsheets

This is the Verra Carbon credit database:

The folks at Verra were kind enough to create a whole standard called VCS designed specifically to account for Carbon Credits!

The only problem, this is a fallible centralized database run by a single entity..

Thus to upgrade these credits to the blockchain, we need to convert each entry into an NFT serial number that references the underlying metadata.

Thanks to the Opensea standard this is quite straightforward.

We just need to map each column with each unique attribute to the NFT using metadata. In pseudo code this looks something like:

{"description":What are the sustainable development goals", 
"image":"IPFS link to keypictureofproject.webp", 
"name":"XYZ Verra Entry", 
"attributes":[{"trait_type":"quantity issued","value":"4002"},

Where a very important attribute is “Quantity Issued” as this describes how many tons of CO2 the project represents.

The only thing left to do is to do it. Not on some private permissioned Jamie Dimon chain, or weird alternative L1 with no traction, but on a quality Ethereum L2. Or if the value is high enough, then directly on mainnet.

“Dynamic” NFTs

Remember all an NFT is.. is a serial number pointing to a link. It then makes sense these links can be dynamic (updateable) instead of static.

Many projects do this already by pointing their NFTs to a centralized server. Mirror.xyz does things one better by pointing to a new Arweave hash every time an author updates their article.

This is the right answer. Allow NFTs to be dynamic. Maybe the data undergirding a carbon credit changes over time. Great. Just make sure the paper trail is available onchain, so internet sleuths can verify the legitimacy of each incremental link.

--

Power Harnessed

We can have trusted and verifiable carbon markets TODAY. We can have trusted and verifiable onchain real estate transactions TODAY. No middlemen, near zero fees. The super saiyan form of capitalism where all margin is exposed transparently on-chain.

How do we get to this glorious future?

1. Use open blockchains (Specifically ETH)

2. to make NFTs

3. that harness the power of metadata

4. to represent things in the real world

All that’s needed is good metadata + a small army of lawyers, venture capitalists, coders, and social media influencers.