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How Does DappRadar Calculate NFT Asset Strength

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DappRadar

Explaining the calculations behind our NFT scoring system

Every NFT asset has a certain strength, determined by its smart contracts, blockchain of choice, storage, and metadata. DappRadar takes all these points into consideration when evaluating the strength of an NFT. You can find our NFT Asset Strength scores on the individual NFT pages, for example this NFT, or this one. 

We are just throwing it out there: not all NFTs are equal. In general, the more decentralized an NFT gets stored, the better, stronger and more resilient it becomes. When a creator stores the images for his NFT on a private server, it seems very likely that the NFT will one day lose that image. The token will still be there on the blockchain, but the image it refers to will be gone. 

Let’s dive a bit deeper into NFT Asset Strength. There are 3 points that determine the Asset Strength of an NFT. Two of these form the so-called metadata.

  1. Media storage
  2. Data storage
  3. Smart contract

What is metadata and why is it important? 

What you see on your screen is an image, but in the background, there’s all kinds of data that ultimately shapes the NFT as it is. That’s the metadata. This could be images, audio files, videos, but also JSON data containing info about unique traits. Think about the attack power of a virtual sword or the rarity of a certain trait. 

It’s in the metadata that we can identify weaknesses in NFTs. When this data gets stored on centralized servers, websites, it will get deleted someday. Think about account-based services like Amazon Web Services and Google Cloud. The question isn’t if, but when. 

IPFS would already be a better solution for storing NFT metadata, but also data on IPFS can disappear. 

Another, and cheaper, solution would be Arweave, a decentralized storage provider where data can be stored following a one-time payment. Storing on the blockchain, often called on-chain, is considered the best and most resilient method. 

Verified Smart Contracts

As the buyer of an NFT, you want the certainty that the technology your NFT uses is flawless. Because every NFT collection uses its own smart contracts, it’s important that these smart contracts are verified. 

In this case verified means that the smart contracts are open to the public, for everybody to see and read. When this is the case, the smart contract gets verified on for example block explorer websites like Etherscan. 

On Etherscan, go to the right page, click ‘Contract’ and then verify under ‘code’ whether the Contract Source Code has been verified or not. 

Methodology – What does the score mean?

DappRadar looks at each of the criteria and automatically calculates the Asset Strength based on the on-chain information. The NFT Asset Strength evaluation doesn’t equal any investment advice. A low score doesn’t mean that a product isn’t trustworthy, and a high score doesn’t mean that it’s the best product ever. 

Ultimately the Asset Score is a measurement to determine whether the current NFTs in a project are able to exist even if a project shuts down. From that perspective, you could view the Asset Score as a likelihood for eternal existence. 

These are the scores we give

  • Smart contract 
    • verified: 30 points
    • Unverified: 0 points
  • Media file
    • Centralized server: 0 points
    • IPFS: 25 points
    • Arweave: 35 points
    • Pinata: 35 points
    • On-chain: 35 points
  • Metadata File (JSON)
    • Centralized server: 0 points
    • IPFS: 25 points
    • Arweave: 35 points
    • Pinata: 35 points
    • On-chain: 35 points

Some examples

Let’s take a look at some possible scenarios. A smart contract could be verified, while both data and images are stored on IPFS. This would mean that the particular NFT would have an 80% score. 

  • Verified + IPFS + IPFS = 30% + 25% + 25% = 80% 

However, Avastars has a verified smart contract, stores its meta data on the blockchain, and loads its images from the blockchain as well. As a result this project would get a 100% score.

  • Verified + On-chain + On-chain = 30% + 35% + 35% = 100%

Now let’s look at a trickier example, a popular blockchain game like Axie Infinity. They have their smart contract verified on Etherscan, but both images and data get stored on centralized servers. They do this because they are actively developing, tweaking and building the game. This would give Axie Infinity a 30% score.

Axie Infinity is one of the most popular games tapping into a blockchain ecosystem.
  • Verified + Centralized + Centralized = 30% + 0% + 0% = 30%

This shows that the quality of a project should not be concluded solely based on our DappRadar Asset Strength score. 

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