The recent FTX collapse raised a lot of concerns about the crypto industry. Now, the effects of this disaster have spilled over into the NFT space as users cannot view their activities.
Solana engineer jac0xb.sol points out how the metadata of FTX-hosted NFTs now points to a restructuring website that gives out information about bankruptcy proceedings. According to jac0xb.sol, the NFTs minted on FTX were hosted using Web2, resulting in images not showing.
Example of an NFT hosted by FTX. Source:magiceden.ioAfter the FTX exchange filed for bankruptcy, the FTP domain was entirely redirected to the bankruptcy proceeding page. This resulted in owners of NFTs being able to see that their tokens still exist, but images can no longer be viewed, even when viewing them within wallets or listing them on NFT trading platforms.
jac0xb.sol talked to the collections that are still hosting metadata on Amazon Web Services, suggesting that there is a “lesson to be learned” with how FTX hosted their NFTs using a Web2 API service. Other users even commented that this highlights problems with Web3 companies relying on centralized services like AWS or the Google Cloud Platform.
On Aug. 5, NFT executives brought up the topic of not having NFTs on the blockchain. In a interview, Jonathan Victor, the Web3 storage lead at Protocol Labs, and Alex Salnikov, the co-founder of Rarible explained that technically, crypto tokens were stored somewhere else. The duo highlighted that chains like Ethereum often don’t have enough space to accommodate more data and that it cost more to store it on a blockchain.
Despite the troubles brought about by FTX’s collapse, the NFT industry remains confident in the future of the space various players within the NFT space expressed their confidence that the space will eventually improve. The executives highlighted that it’s important for the NFT community to focus on bringing more utility to their collections.