Authors: Ben Strauss(Transient Labs)
Status: Temperature Check
Created Date: July 5, 2022
Shatter page: https://transientlabs.xyz/shatter
Temp check link: Discord
Shatter is a revolutionary smart contract developed by Transient Labs; creating an entirely new dynamic between the artist and collector. Using the Shatter smart contract, the collector now has a choice: keep the piece as a true 1/1 … or … Shatter the piece, converting the original artwork into editioned ERC-721 NFTs.
Think of Shatter as a switch (executable function inside the contract) that ONLY the current owner (artist or collector) of the 1/1 piece can flip. Until that switch is flipped, the piece will forever remain a true 1/1 artwork. If and when the owner decides to Shatter their 1/1 piece, the smart contract burns the original piece, while simultaneously minting the editions directly to the owner’s wallet using an extremely gas-efficient batch minting process (ERC 721A). Because these new tokens are minted to the same smart contract, they will all show up under the same series. During the creation of the smart contract, the artist defines both a maximum and minimum number of editions the piece can be potentially shattered into. Therefore, these editions will be limited. Each piece can only be shattered once, however, if at any time a single wallet address owns all of the editions of a shattered piece, they may execute a one-time FUSE function to effectively re-assemble the piece into a final 1/1 state.
The Shatter contract implementation is being proposed because it provides artists and collectors more creative control than ever before. Artwork editions have traditionally been a great way to expand a collector base. Now with Shatter, there exists the opportunity to not only reach the audience of the creator, but also the audience of the collector who Shatters the piece. 1/1 artwork can have a hefty price tag, making secondary sales more difficult to come by. Furthermore, it will allow art to be more liquid, giving the collector the ability to break their 1/1 into editioned ERC721s opening up many doors in the secondary market.
General: Shatter is a smart contract innovation from Transient Labs that allows artists or collectors to convert the original artwork into editioned ERC-721 NFTs. Think of Shatter as a switch that ONLY the current owner (artist or collector) of the 1/1 piece can flip. Until that switch is flipped, the piece will forever remain a true 1/1 artwork. If and when the owner decides to Shatter their 1/1 piece, the smart contract burns the original piece, while simultaneously minting the editions directly to the owner’s wallet using an extremely gas-efficient batch minting process (ERC 721A). Because these new tokens are minted to the same smart contract, they will all show up under the same series.
Artists’ Control: When creating the initial smart contract, the artist defines a maximum and a minimum number of editions that a given piece can be Shattered into. The future collector/owner can then choose, within the set range, how many editions the 1/1 piece will be Shattered into. Once a piece is Shattered, the editions themselves cannot be further Shattered. The artist also has the option to set a delay period during which the piece must remain a true 1/1 before the collector can Shatter it.
How is it different from fractionalizing?
When an NFT is fractionalized, the ownership of that 1/1 NFT is being shared amongst several different people. The fractional ownership of this NFT is usually represented by ERC20 or ERC1155 tokens. With fractionalization, the original NFT remains an intact 1/1 artwork. Fractionalizing is also backwards compatible, meaning it can be applied to any already existing 1/1 NFT. Shatter, on the other hand, is a novel mechanic built straight into the smart contract for a given 1/1 NFT. Because of this, Shatter is not backwards compatible, as the 1/1 must be minted on a Shatter-enabled smart contract. When an NFT is Shattered, the smart contract mints editioned ERC721s of that NFT, while simultaneously burning the original 1/1. All editions get minted to the owner/collector’s wallet and stay within the same series as the original 1/1 NFT. Unlike fractionalized NFTs, these editions do not represent partial ownership of any existing 1/1 piece. Rather, the collector has full ownership of each edition they own, just as they would with a regular editioned artwork.
Can Shatter be undone?
Yes, and it is accomplished through what we call the “FUSE” mechanic. This function essentially “fuses” all of the editions back into a 1/1 NFT. However, there are a couple of simple rules to keep in mind:
- You must have ownership of ALL editions from the originally Shattered 1/1 NFT
- This applies if you kept all editions after Shattering, or swept the entire collection off secondary
- Once the FUSE function is used, the resulting 1/1 NFT can never be Shattered or fused again. This will be its final state!
How many times can a piece be Shattered?
A 1/1 NFT minted to a Shatter smart contract can only be Shattered once. The resulting editions from a Shatter can not be further Shattered. And remember, if the Fuse function is used the resulting 1/1 NFT can never be Shattered or fused again.
To help with implementation there will be a Shatter registry that acts as a source of truth for valid and approved shatter contracts created by Transient Labs. Marketplaces such as SuperRare will be able to query this to see if it’s a true Shatter contract developed by Transient Labs.
There are many benefits of implementing Shatter on SuperRare, such as:
- Creating a new dynamic between collectors and artists
- Allowing collectors to sell their Shattered editions will provide more liquidity options and a form of insurance against expensive 1/1 art purchases
- Artists have the potential to reach a larger/different audience through the collector who Shatters
- Opens up the art market for collectors who are outpriced of 1/1s, therefore hopefully will lead to more collectors on-boarded to SuperRare
- Possible implementation work
- Introduction of editions of SuperRare, reducing scarcity of 1/1 artworks
There are a few outcomes that will demonstrate whether this proposal was successful. The first is we see the Shatter contract being used by different artists. Secondly, once a piece is Shattered, the editions are sold to other collectors at a more affordable price point to open up an artist’s collector base. Thirdly, SuperRare will see more market volume-driven from the affordability aspect of collecting editions from our favorite artists rather than only 1/1s.