FTX And Cryptocurrency Problems:
The company’s bankruptcy impacted NFTs housed on the FTX platform, which displayed blank images in place of the original artwork.
The FTX collapse exposed numerous problems in the cryptocurrency sector. Currently, users cannot view their FTX-hosted nonfungible tokens (NFTs) due to the FTX scandal.
The metadata of FTX-hosted NFTs now links to a restructuring website that disseminates information on bankruptcy procedures, Solana engineer jac0xb.sol noted in a tweet. The NFTs created on FTX, according to jac0xb.sol, was hosted via a Web2 application programming interface (API), which prevented graphics from appearing.
The FTX.us domain was redirected to the bankruptcy procedure page after the FTX exchange filed for bankruptcy. As a result, NFT owners can still recognize the existence of their NFTs. Images, however, can no longer be viewed, not even when they are listed on NFT trading platforms or viewed within wallets.
Web2 API Fault:
Jac0xb.sol suggested that there is a “lesson to be learned” from how FTX hosted their NFTs utilizing a Web2 API service, calling out collections that are still hosting metadata on Amazon Web Services. The usage of centralized services by Web3 businesses, such as AWS or the Google Cloud Platform, has also been criticized, according to several users who remarked on the matter.
NFT executives brought up the issue of NFTs not existing on the blockchain on August 5. Technically, the tokens are held somewhere else, according to Jonathan Victor, Protocol Labs’ Web3 storage head, and Alex Salnikov, co-founder of Rarible, in an interview with Cointelegraph. The pair emphasized that primary chains frequently have minimal storage capacities, so storing data on a blockchain is more expensive.
The NFT business is still optimistic about the area’s future despite the difficulties caused by the FTX collapse. Several NFT market participants spoke with Cointelegraph on November 22 and shared their optimism for the ultimate recovery of the market. The CEOs emphasized the need for the NFT community to concentrate on making their collections more useful.
A Solana engineer called out to collections that are still hosting metadata on AWS, suggesting that there’s a “lesson to be learned”.