Holograph: NFTs without boundaries
In this article, we unpack Holograph’s thesis with respect to NFT interoperability. We cover the current state of cross-chain communication, crypto as religion, Holograph in the context of omnichain, and how we see these ideas evolving over the next several years.
From Monotheism to Polytheism
Public blockchains are open within themselves, but don’t easily communicate with each other. Currently, blockchains are locally composable, but not globally composable. As a result, assets and liquidity are fragmented across different blockchains. This creates a paradox that contradicts the open nature of public blockchains.
These problems are amplified by the ideological dogma of various blockchain communities. In other words, crypto has become a form of religion. The most vocal disciples (aka “maximalists”) will defend their blockchains to the death. As has played out over millennia, the clash of religious beliefs often escalates to war. In the context of blockchains, religious disagreements have led to chains wars, gas wars, and block wars to name a few.
Holograph presents a solution to blockchain total war. Holograph is fundamentally polytheistic, and believes that all blockspace deserves a place in the pantheon of web3.
Holograph & Omnichain
We define “omnichain” as “heterogeneous communication protocols that connect blockchains to a unified network.” Using an analogy: blockchain is to omnichain as mushroom is to mycelium.
Applying this idea to NFTs, we define an “omnichain NFT” as an “NFT that exists as one instance across many blockchains.” That said, such a thing does not currently exist.
As we wrote in this article:
When an NFT is bridged from one chain to another, it’s typically locked on the origin chain and a new NFT is minted on the destination chain. This process creates a “wrapped” or “synthetic” version of the NFT, more akin to a photocopy than the original artwork. If the wrapped NFT is bridged again (using a different bridge), yet another synthetic version is created, further diluting the original NFT, resulting in what’s essentially a “fungible NFT.” This process violates an NFTs non-fungible properties and complicates the record of ownership.
In short, NFTs lack true cross-chain interoperability.
Enter Holograph, which was established to solve the “wrapped NFT” problem by enabling NFTs to travel cross-chain while maintaining complete data integrity (which we define as an NFT’s smart contract address & token ID). In fact, Holograph gets its name from the process of “holography,” which is a technique in physics that “enables a wavefront to be recorded and later re-constructed.” So instead of “lock & mint” bridging, Holograph introduces “holographic” bridging, which is a process unique to our NFT interoperability protocol.
With Holograph, it won’t matter what chain was used to mint an NFT. The importance of owning an “Ethereum NFT” or a “Polygon NFT” or a “Whatever NFT” will no longer matter. Sure, such a distinction may matter to a maximalist, but in the grand scheme of things, maximalists only represent a small fraction of a much larger community who could care less. That said, a maximalist may chose to only engage with the NFTs minted on their favorite chain. But by not using Holograph, they fundamentally limit the utility of their NFTs.
Let’s be real: most people don’t care (or even know) what cloud provider an app’s backend is using, and it’ll be the same with blockchains. Users will use the products that best solve their problems, end of story.
Unlocking New Use Cases
We aim to build tools that inspire developers and communities through the introduction of entirely new use cases. NFTs can be more than just monkey pictures. NFTs can represent almost any non-fungible asset, from real estate deeds to health records, from reputation to entire websites. For example, a creator could take advantage of the cheaper transaction costs to mint NFTs on one chain, and then bridge them to another chain with more liquidity. It also enables chain-specific NFT properties that can be updated dynamically based on the chain to which it’s currently located. Traders meanwhile can explore cross-chain NFT arbitrage by profiting from the slight price difference of NFTs listed on marketplaces across different chains. Furthermore, it becomes possible to create omnichain NFT marketplaces where traders can collect NFTs from many different chains, without needing to acquire the native gas tokens for each one.
No one blockchain will satisfy all potential use cases. Some blockchains will be better for storing value, some will be better for financial services, and others will be better for gaming. Holographic interoperability will enable users to access the specialized benefits of different chains at their discretion. Doing so will level the playing field between chains as users won’t be locked in to any particular network. In short, Holograph gives users optionality. It’s not up to us to decide what’s best for the user, that’s on them. Freedom of choice is a core principle that we care about deeply.
Holograph is a Public Good
NFTs have launched the crypto space in to the early stages of mass adoption. This is because NFTs represent cultural artifacts, and cultural artifacts tend to resonate more broadly than complex financial products. Consequently, every major brand and enterprise in the world will leverage NFTs to more deeply engage with their communities. As a result, user demand for blockspace will only continue to grow, creating new blockchains that will onboard millions of new users who will generate trillions in value. Thus, as more blockchains come to market, holographic NFT interoperability will be paramount.
Thanks for reading and make sure to keep in touch!