Skip to main content

mQuark Whitepaper

"We believe in a future where businesses, metaverses and blockchains, through NFTs, interconnect, interoperate and augment each other to create virtual objects of increasing value, functionality and reusability.”

1. Introduction​

Virtual assets known as Non-fungible Tokens (NFTs), along with Blockchain and Metaverse concepts, continue to grow in popularity today and are traded for incredible values. But today, NFTs have limited scope and utility beyond being a proof-of-ownership contract and being traded as a collectible.

NFTs still lay in the realm of early adopters. In order to jump ‘The Chasm’ into the Early & Late Majority of users, we need businesses, game developers AND their customers bought-into the technology and realising the mutual benefit of their trading and usage. The functionality of NFTs needs to evolve beyond just a digital identifier used to certify authenticity and ownership in a single scope to an asset that can be reused and reimaged across multiple worlds.

We believe in a future where businesses, organisations, non-profits, games, and customers, through NFTs and blockchains, interconnect, interoperate, and augment each other to create virtual objects of increasing value, functionality, and reusability.

1.1 History of NFTs​

The idea that gave rise to NFTs was conceived long before Ethereum existed when Meni Rosenfield published a paper in 2012 outlining the "Colored Coins" concept for the Bitcoin blockchain. The purpose of coloured coins was to define a family of techniques for recording and managing physical assets to verify ownership on the blockchain. They are similar to conventional Bitcoins but have an additional "token" element that specifies their usage, making them distinct and separated. The Colored Coins concept was never realised due to Bitcoin’s constraints, but it served as the starting point for the experiments that eventually led to the development of NFTs.

However, it's crucial to remember that the Bitcoin blockchain was never meant to serve as a database for tokens indicating asset ownership, which sparked the significant migration of NFTs to the Ethereum blockchain.

A set of token specifications that permitted developers to create tokens supported the significant transfer of NFTs to Ethereum. To help developers build, issue, and deploy new tokens by the underlying blockchain technology, the token standard—a subset of the intelligent contract standard—was added. Following the success of the Rare Pepes, two software developers, John Watkinson and Matt Hall created their generative series of NFTs on the Ethereum blockchain under the name CryptoPunks. Some of the first NFTs to be built and initially made available for free were CryptoPunks. The experimental project, restricted to 10,000 pieces and featured unique characters, was influenced by cyberpunk and London punk culture. The Vancouver-based startup studio Axiom Zen unveiled CryptoKitties during the biggest hackathon for the Ethereum ecosystem in history. Following the enormous popularity of CryptoKitties, NFTS gaming started to take off and advance, with more and more people being aware of it.

The NFT gaming and metaverse projects were at the forefront, and Decentraland (MANA), a decentralised VR platform on the Ethereum blockchain, was the first to make headway in this field. An open-world gaming environment called Decentraland lets users explore, play games, create, gather stuff, and more. Everything you find, earn and construct there is yours to keep on the blockchain.

It wasn't long before more Enjin Coin (ENJ)-based platforms and games entered the market, enabling developers to tokenise their in-game objects on Ethereum and give them a real-world value. Axie Infinity (AXS), blockchain-based commerce and combat game partially owned and run by its players, has also come into being. 2021 was dubbed the "Year of the NFT," as both production and demand for NFTs skyrocketed.

One of the leading causes of this surge was the profound shifts within the art market and the entire industry when renowned auction houses, namely Christie's and Sotheby's, started selling NFT paintings and expanding their online auctions. As a result, Christie's sold Beeple's Everyday: the First 5000 Days NFT for a record-breaking $69 million. An enormous transaction from such a famous auction house served as important NFT market validation.

Other blockchains getting involved and beginning their own NFTs was another knock-on consequence of the famous Christie's auction, in addition to the spike in demand for NFTs. These comprised the blockchains Cardano, Solano, Tezos, and Flow, among others. Some new standards were devised to guarantee the validity and originality of the digital assets created with these more recent NFT platforms.

The growth in the market for NFTs has been remarkable. A year ago, the monthly sales volume of NFTs was around $59 million. In January this year, OpenSea alone surpassed $3.5 billion in NFT sales. Yet most of these sales are of assets that have limited or single scope usage - like a cyberpunk, bored ape or art piece.

1.2 Perceived Value​

The Perceived Value refers to the perspective or opinion of the customer towards an NFT often influenced by how it met the needs, expectations, quality and/or desirability criteria of that customer versus the cost relative to other similar NFTs. Though here, we focus on the needs, often referred to as the Perceived Utility Value which can be broken down into 5 categories:

  • Form utility - how appealing it is to the customers at first sight. Here the form of current NFTs is limited. The collectible or art piece NFT really only has value as an immutable proof-of-ownership and e-commerce engine (in terms of automatic royalty payments, trading, etc.) in one form type, whether it’s a 2D image, 3D model, music file, video, etc. Its form cannot be reimagined in various worlds or metaverses, which is what we’ll address.

  • Time utility - how fast can customers access and use it. This depends on how good the UX is in each of the metaverses that adopt and utilise NFTs, as well as the capabilities of the blockchain wallets (like Metamask). Here is where users with existing NFTs can immediately bring them into future metaverses by just having them in their wallets.

  • Place utility - how convenient it is for customers to purchase and use them (and where they can be sold). Here we will explore how a new type of NFT can be used in multiple places by businesses and games alike and how this will affect the perceived value.

  • Task utility - how the customer perceives the saving of energy, time, and financial resources when completing a certain task or process. Here we will explore how onboarding into a new metaverse could become smoother and more rewarding if the customer already owns usable assets.

  • Possession utility - how easy customers find it to possess an NFT in terms of where it can be bought, scarcity, and how easy it is to trade.

The Perceived Utility Value of a traditional NFT is limited, and thus the adoption rate is being stunted. A new type of NFT is needed in order to drive adoption beyond just the early tech-savvy adopters.

1.3 Limitations and Challenges​

Today, the number of users of computer or console games and the number of games are increasing daily. When users earn, upgrade an item, finish a game or switch to a new one, their achievements and possessions cannot go beyond the limits of that game. Similar in-game items are purchased, then re-purchased again for each online game.

Even in Metaverses integrated into Blockchains, in-game items used as NFTs stay within the boundaries of just that world. This is because there is no knowledge of what that NFT is or how to interpret it in other metaverses. That is, it is not automatically possible for a spaceship NFT used in Metaverse A to detect it in Metaverse B. Metaverse B developers need to manually embed their code to recognise that NFT. Because no interoperability standard or protocol has been followed to specify which category and features, the NFTs have.

Furthermore, there is no easy way for Metaverse developers to know which NFTs have been adopted by which businesses or which other Metaverses. We believe it is essential for businesses to drive NFT adoption and for metaverse developers to ride that wave. Only when businesses, Metaverse developers, and customers interconnect that we’ll jump the adoption chasm.

We need an interoperability standard or protocol that helps businesses, metaverses, and game developers to create categories of reusable NFTs with their own attached attributes. We need to give developers the power to follow a common NFT standard, categorise in-game items & attributes, establish a common language among other metaverses, and allow their customers to take their owned NFTs from one metaverse to another.

We need to allow developers from Metaverse A either to read the NFT’s attributes of Metaverse B or completely reimagine what that object is with their own attributes to attach. For example, a unique well-known branded shoe sold on their website that came with an accompanying NFT could be represented on the feet of an avatar in one metaverse but could be represented as a picture on the wall in another metaverse.