xNFT Explained: Backpack’s Secret Weapon

Reposted original title: Airdrops in NFTs? Just One of the Tricks! Exploring xNFT - The Secret Weapon of Backpack

Can you receive airdrops in your NFTs?

Mad Lads W Airdrop Claim page

Holders of the Mad Lads NFT just claimed Wormhole airdropped W tokens in their NFT. That’s right, not on the official airdrop claim website, but in “NFT”. The relatively novel experience has aroused the curiosity of many people. After further exploration, it turns out that the xNFT protocol launched by Backpack can tokenize the code, making the NFT an executable program at the same time, thereby realizing advanced and customized functions.

An NFT in the wallet is an executable program. If you hold it, you have the right to use it. Using the combination of NFT and applications, Mad Lads has previously built a staking points system and a badge achievement system in NFT, but only the holders understand it. With the arrival of Wormhole’s airdrop, and the overwhelming discussion on the Internet about “Does your Mad Lads have a W badge?”, making this gameplay popular out of the circle.

Mad Lads xNFT program entrance (left), staking points system and badge system (right)

People may underestimate the xNFT protocol.

“Can you claim airdrops within your NFT?” It’s a simple question. Currently, apart from Mad Lads holders, the answer for everyone else is “NO.” Previous top NFT projects that have received airdrops from various projects still require users to visit the official website to claim them, without any interaction with the NFT itself. Moreover, in the more common scenario of profile NFTs (PFP), their “intrinsic” value is limited — even if they are eligible for airdrops. Because such airdrops are disconnected from the NFT itself, their value lies in the airdrop rather than the NFT, allowing owners to sell the NFT after receiving the airdrop, effectively reducing the NFT’s value. The floor price trend of Tensorians after receiving the TNSR airdrop to some extent validates this viewpoint.

As mentioned in the first paragraph, xNFT enables advanced and customized functionalities. Behind the module that allows Mad Lads to claim airdrops lies a complex unlocking contract. Apart from the initial unlock of 3200 W tokens, the remaining 12800 W tokens are linearly unlocked daily over a year. With the airdrop tied to the NFT, “the NFT becomes the airdrop.” Selling the NFT means losing the unclaimed W tokens. Surprisingly, after the Wormhole airdrop, the price of Mad Lads stabilized, and the number of orders on the market continued to decrease.

Mad Lads’ W airdrop share is linearly unlocked by the lock-up contract

This is a simple use case of xNFT for issuing airdrops. It is not difficult to realize that the concept behind “application and NFT are integrated, and NFT ownership is application ownership” may give birth to more possibilities. Mad Lads was the first to show this possibility to the outside world, acting as a “promotional film”. This is why Backpack, which is a wallet-based product, first focused on building the Mad Lads NFT community - active and influential community members let more people see what Backpack’s products can do.

There is more that can be done.

The Web2 Dilemma in a Web3 World

Let’s pose the problem first and then talk about the solution. The current Web3 world is actually “very Web2”.

Browsers that are “stuffed into wallets”

Why do entrepreneurial teams want to make wallets? Why can crypto wallets that usually don’t issue tokens get hundreds of millions of dollars in financing? I think maybe everyone is betting that the wallet can become the “traffic entrance” in the Web3 world, just like the browser in the Web2 world. But the problem is that most current crypto wallets are essentially browsers plus wallet modules, covered in layers. If this consideration is for traditional Onboard users who want to use an experience close to Web2, then how can they compete with browser giants like Brave, which have built-in wallet modules in their browsers and have tens of millions of users?

Such a wallet is too replaceable. It only provides a Web2-like experience. It fails to take advantage of the blockchain as a public ledger and solve ownership issues, and it fails to create a “Web3 native” experience.

Joining the community of holders is difficult

Many people buy NFTs to join the Token Gated Community behind them (a community where tokens serve as entry barriers). Being able to be in the same chat group with celebrities such as Stephen Curry and Justin Bieber, as well as top traders and project developers, was once the biggest advantage of NFTs such as BAYC.

But it is actually very difficult to join the holder community. First of all, in the process of purchasing NFT, transferring the tokens from the exchange to the crypto wallet will stump a large number of users who have never interacted on the chain. Then go to the NFT market, authorize and purchase. After purchasing, you need to go to the tool link Discord and wallet specified by the corresponding project to verify the NFT ownership.

If all goes well, you will eventually be in a Discord holder channel. This is very un-Web3. And if anything goes wrong at any step in the process: transferring to the wrong address, being phished during the authorization and verification process, it will cause property damage. As Web3 players, even if we give a Web2 friend a favourite NFT, he may not be able to successfully complete the above steps without instructions. Can such a user experience support mass adoption?

Web3 WeChat

How does xNFT solve the above problems? What inspired it?

The answer lies in the Eastern Country

In China, is the browser still the traffic portal for Web2? Domain names that are only a fraction of their peak price may tell us the answer - very few Chinese people enter the URL into the browser to access the service, and everyone directly uses different APPs. A further trend is that everyone uses “super applications” like WeChat, and different services run as “mini programs” on the WeChat platform, making WeChat a new form of traffic entrance.

Executable NFTs, making the experience native

Backpack co-founder Armani Ferrante’s wife is Chinese, and he once bluntly said that Backpack was inspired by China’s WeChat. Using the xNFT protocol, Backpack is expected to develop into a “Web3 WeChat” form.

Using the xNFT protocol, “wallet + executable NFT” may replace “browser + web application” and become a new interaction paradigm with Web3 characteristics. In this mode, the concept of Web2 is eliminated. The wallet manages assets, and executable applications are also part of the assets. Users with different xNFTs can access different dAPPs through them. The relationship between Backpack and different xNFTs is just like the relationship between WeChat and different mini programs.

Manage native, token-gated applications in your wallet

Now that you have an avatar-like PFP xNFT, open and execute it, and you will come to the holder’s exclusive chat group. And it all happens in your wallet, no more complicated interactions like Discord, NFT ownership verification websites, etc. “Wallet + NFT” is a more Web3 interactive mode, and the experience is relatively more natural: I should be able to enter the exclusive group if I own this NFT. Why do I need to interact with unrelated websites to achieve this?

Now, giving your favorite NFT to your Web2 friends is as simple as having them download Backpack and send you their wallet address. Once they receive the NFT, they can open and execute it, instantly joining the same exclusive crypto community of holders as you, successfully onboarded. This user experience might be more conducive to mass adoption. Everything happens within Backpack. Executable NFTs could potentially make the Web3 experience more native.

New distribution methods and traffic entrances

xNFTs can bring about new ways of distributing content and applications, perhaps helping Backpack become a traffic entrance.

The most common solution for getting users to use your developed applications in Web2 is through advertising. However, this model is not very efficient. Advertising massively on platforms like YouTube in exchange for user clicks is costly and does not guarantee the desired quantity or proportion of target users among the audience. For example, many domestic companies advertise in NBA stadiums in Chinese to target NBA fans, but these expensive ads are ineffective for non-Chinese-speaking fans.

How can content and applications be distributed more targetedly and efficiently?

Since xNFTs are essentially applications, project teams can selectively distribute these xNFTs to wallets of users with specific behavioural characteristics based on on-chain interaction records. For example, for a blockchain gaming application, project teams can freely airdrop it to the wallets of many blockchain gaming enthusiasts while simultaneously selling it at a normal price on the NFT market. Are players who receive free access to paid games interested in trying them out? If they enjoy the game, will they actively promote it, thereby boosting overall game sales? I think it’s possible.

This completely new distribution method may attract many developers to create their applications as xNFTs and distribute them through Backpack. Backpack could then become a “traffic entrance” or “Web3 WeChat.”

DeFi and Gaming xNFT on xNFT Store xnft.gg

Important pieces of the Backpack vision

Backpack co-founder Tristan Yver once said in a speech at Consensus2023 that it was the idea of ​​xNFT that was powerful enough that they felt it made sense to create a company for this purpose. This shows the importance of xNFT in the Backpack blueprint.

Tristan Yver speaking at Consensus2023

When trying out the mobile app of Backpack Exchange, users will find that they are attempting to tightly integrate the functionalities of the exchange and wallet. The originally distinct sections of the two functions have similar user interface designs and can switch functions with just one click. The author believes that Backpack is attempting to unify the currently fragmented user experience by integrating all the different functionalities that meet the needs of the crypto community into a unified experience — and to achieve this vision, the ability of xNFTs to make the Web3 experience native and help Backpack become a traffic entrance may be indispensable.

Note: This article, based on publicly available internet information, only represents the author’s personal views, does not guarantee accuracy and is not associated with Backpack.

Statement:

1. This article originally titled “Airdrops in NFTs? Just One of the Tricks! Exploring xNFT - The Secret Weapon of Backpack” is reproduced from [Foresight News]. All copyrights belong to the original author [Alex Liu]. If you have any objection to the reprint, please contact the Gate Learn team, the team will handle it as soon as possible.

2. Disclaimer: The views and opinions expressed in this article represent only the author’s personal views and do not constitute any investment advice.

3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.