NFTs are the crypto’s first crypto-native “goods” and have become a major focus for all major L1s. At Delphi, we believe NFTs as a data construct will eventually wrap around trillions of dollars worth of assets, including pfps, gaming assets, creator/fan tokens, real-world assets (RWA), “phygital” items, and much more that we can’t even conceive of right now. This is an area that Cosmos is very much lagging in. While Stardust has done some excellent work, volume is still very low compared to other chains.PFPs are undoubtedly NFT’s killer app right now. However, we don’t believe pfps are NFT’s only use case or even the most interesting one. Rather than compete in this crowded vertical, we believe Cosmos should instead try to focus on a more untapped market. One interesting potential area of focus is identity, inspired by Vitalik’s paper on soulbound tokens.

Right now, wallets are filled with valuable identifying information but this is very hard to unearth, particularly outside of Ethereum. As a result, protocols know next to nothing about their users and tokenholders. This leads to several problems: It means that coin voting, with all its flaws, is currently the only viable form of decentralised governance. It makes it impossible to conduct token launch events that cannot be dominated by whales. It also makes it impossible to do basic things such as reward loyal users, conduct targeted campaigns, both for new user acquisition and/or retargeting of existing users. Airdrops/yield farming are the best proxies we have for this, but both are highly flawed. Airdrops reward past behaviour and mostly get dumped, in addition to being highly vulnerable to sybil attacks and other forms of gaming. Yield farming rewards just a single, highly gameable metric (amount of capital staked), benefiting whales while being unable to filter out undesirable exploitive behaviour such as farming & dumping.

The ideal solution would allow protocols to granularly target specific kinds of users based on on-chain wallet behaviour. With this in mind, we believe there’s scope for products that help surface data about wallets, perhaps in the form of Nansen-like tags represented as soulbound tokens. Examples of kinds of tags that might make sense would be stuff like wallet age (when was their first on-chain interaction), wallet activity (daily/monthly on-chain interactions), political activity (how active a voter they are), political views (e.g. how they voted on controversial hub proposals), protocol behaviour (e.g. are they a power user of a certain protocol, what kind of power user are they, are they a liquidator, etc), holding behaviour (are they diamond hands or dumpoors) etc. Ideally, this infrastructure should allow any user to create a tag. Ultimately, a free market would develop where the most useful/well-designed tags would receive more usage and rise to the top.

Ideally, such a protocol would allow users to verify that they own a certain wallet (with all associated tags) without revealing the specific wallet to others. This could allow users to list these verified tags on their social media profiles, Discord, governance forums, etc. without doxxing their entire wallet. These tags could be issued as NFTs to a separate wallet of the user’s choice. Optionally, the protocol could also allow the user to complete KYC and issue them a unique KYC NFT, an on-chain proof-of-humanity which would make these users more valuable airdrop/bounty campaign participants.

Where: This should pull in data from as many chains as possible to be maximally useful. Ideally, it’d be built on the new CW-X cross-chain NFT standard