Non-fungible tokens (NFTs) have exploded in popularity recently as a way to represent ownership of unique digital assets. While most NFTs have been created on the Ethereum blockchain so far, other blockchain platforms like Cardano aim to make minting and trading NFTs faster, cheaper, and more energy efficient.
In this article, we’ll explore what’s involved in minting and burning native NFTs on the Cardano blockchain.
What are Native Assets and Native NFTs?
The term “native assets” refers to tokens that are issued and traded directly on the Cardano blockchain, without the need for smart contracts. This is different from Ethereum-based ERC-20 and ERC-721 tokens that require smart contract functionality to exist.
Native NFTs use Cardano’s native token standard to represent non-fungible digital assets like artwork, collectibles, music, videos, and more. They leverage the same underlying protocol as the ADA cryptocurrency, allowing them to be transferred directly between Cardano wallets.
Benefits of Minting NFTs on Cardano
There are several key advantages to minting NFTs natively on the Cardano blockchain:
- Lower fees – Cardano transaction fees are currently much cheaper than Ethereum gas fees, making it more affordable to mint and trade NFTs for regular users.
- Faster transactions – Cardano can process around 250 transactions per second, compared to 15 on Ethereum. This enables quicker minting and transfers.
- Energy efficiency – Cardano uses a Proof of Stake consensus that is estimated to consume 6 million times less energy than Proof of Work chains like Ethereum. This makes it very environmentally friendly.
- Simple to code – Developing native tokens and NFTs on Cardano is relatively simple using languages like Haskell and Plutus. No need to learn Solidity like on Ethereum.
- Better scalability – Cardano is developing advanced scaling solutions like Hydra that will allow it to potentially process millions of TPS in the future, opening up room for massive NFT growth.
How to Mint Native NFTs on Cardano
Minting native NFTs on the Cardano blockchain involves a few key steps:
1. Install an ADA wallet
First, you’ll need to install a Cardano wallet like Daedalus or Yoroi that supports native token functionality. Make sure to safely store your wallet recovery phrase.
2. Fund your wallet with ADA
You’ll need some ADA in your wallet to pay transaction fees for minting and transferring NFTs. The current minimum transaction fee is around 0.155 ADA.
3. Use CNFT protocol
Most native NFTs are minted using the Cardano Native Token protocol (CNFT). This defines the required metadata and asset creation process.
4. Create NFT metadata
You need to create the metadata that describes and represents your NFT. This includes properties like the name, description, image, attributes, etc.
5. Mint the NFT
Use your wallet software to mint your NFT by submitting the metadata and paying the transaction fee in ADA. Your NFT will then be immutably recorded on the Cardano blockchain.
6. Transfer or sell your NFT
Once minted, you can transfer your NFT to other Cardano users’ wallets, or list it for sale on NFT marketplaces that support native Cardano tokens.
Burning Native NFTs on Cardano
Burning an NFT destroys it permanently by sending it to an unspendable blockchain address with no private key. Reasons for burning NFTs include:
- Removing the NFT from circulation (e.g. if it represents a limited edition item)
- Destroying the NFT as a proof of authenticity
- As part of an artwork, like self-destructing NFTs
- If the NFT was created incorrectly
To burn a native NFT on Cardano, you simply send the token to the network’s burning address which is: addr1qyqs59kgpswq6wgqda8cccepxupshrx7e24jt5gryqwda8cccepxupshrx7e24jt5gr8p3hn0r92xyxyxyxyxyxyxyxyxyxyxyxyxyxyxyxy2f00jv64hdis
This permanently removes the NFT from supply, like destroying the unique asset it represented.
Key Takeaways
- Native NFTs on Cardano offer lower fees, faster speed, energy efficiency and simpler coding than Ethereum NFTs.
- Minting involves installing an ADA wallet, funding it with ADA, creating metadata, and minting via the CNFT protocol.
- Burning an NFT destroys it by sending it to an unspendable address to remove it from circulation.
- Cardano has significant advantages for both minting and burning NFTs natively, making it an attractive blockchain for digital collectibles.
With its low transaction fees, scalability, and energy efficiency, Cardano seems well-positioned to become a leading platform for NFTs. However, Ethereum still dominates the NFT space currently.
For Cardano to overtake Ethereum, it would need to focus on the following:
- Onboarding more users – Cardano needs higher adoption rates to match Ethereum’s large pool of active NFT traders and creators. More fiat onramps and user-friendly wallets would help drive consumer adoption.
- Attracting developers – Cardano needs to incentivize developers to build more NFT marketplaces, minting platforms, and other NFT infrastructure on its blockchain. Hackathons and funding programs could help drive developer interest.
- Leveraging its advantages – Fast and cheap minting costs and environmentally friendly transactions are major selling points. Cardano should emphasize its benefits to attract ethically minded artists and collectors.
- Expanding NFT use cases – While profile pictures and collectibles dominate now, Cardano can support NFT tickets, licenses, certificates, legal documents, supply chain tracking, and more.
If Cardano makes significant inroads across these fronts, it has the technology and ethos to potentially disrupt the NFT space currently dominated by Ethereum. But it has plenty of work to do before it can be considered the top NFT platform.
While Cardano has many advantages for NFTs, it also has some limitations currently holding it back from mainstream NFT adoption:
Limited functionality – Cardano only recently added native token capabilities. Advanced NFT features like royalties are not yet supported. Ethereum has richer functionality through smart contracts.
Low liquidity – Trading volume on Cardano NFT marketplaces is far lower currently than major Ethereum marketplaces like OpenSea, looksRare etc. This makes it harder to sell Cardano NFTs.
Fewer mainstream brands – Big brands launching high-profile NFT drops like Adidas and Gucci have mostly stuck with Ethereum so far. Cardano needs more brand adoption.
Smaller community – Ethereum’s existing NFT community including creators, developers, collectors, and traders is much larger than Cardano’s right now.
Platform lock-in – Many creators and collectors hold their NFTs on Ethereum because that’s where the infrastructure and liquidity is. This creates platform lock-in that Cardano must overcome.
Technical issues – Congestion on Cardano occasionally causes transaction delays and failed NFT mints, frustrating users. Reliability needs to improve.
Crypto skepticism – Lingering skepticism around crypto and NFTs means Cardano must prove itself even more than Ethereum in some ways to convince wary consumers.
Overcoming these disadvantages will allow Cardano to tap into the vast potential of NFTs across gaming, metaverses, licensing, finance, arts, and other verticals.