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Co-Founder of Rarible Warns NFTs Are Not Stored On The Blockchain

Joey Sendz

Joey Sendz

Non-fungible tokens (NFTs) are often touted as blockchain innovations, but in order to avoid misconceptions, two experts argued the correct terminologies to use and how they are stored. The argument is based on how technically, the majority of NFT’s images do not exist on the blockchain but elsewhere.

Jonathan Victor, a Web 3.0 storage lead at Protocol Labs, and Alex Salnikov, the co-founder of Rarible, dissect topics on NFT investments, the future of NFTs and decentralized storage. According to Victor, due to the limited size of main chains, storing data on the blockchain may require a lot and be very expensive. The large file sizes of assets necessitated the introduction of off-chain storage solutions. He established that NFT data can be housed anywhere, such as a hosted node or decentralized storage networks.

Giving his insight into the topic, Salnikov noted that the recent onset of NFTs in the digital space has contributed to the many misconceptions that people have about NFT storage. He said that blockchain confirms the transaction but does not host or store the file. He clarified: “It is important to understand that the NFT living in a user’s wallet only points to the file it represents — the actual file itself, also known as an NFT’s metadata, is typically stored elsewhere.”

The experts also noted that NFT storage can still be considered decentralized, with Victor explaining that their project, NFT.Storage, achieves this by using Filecoin (FIL) and InterPlanetary File System (IFPS), which are decentralized storage networks. This way, they can store NFTs in a manner similar to how internet archives operate. “When we think about decentralization — I like to frame it in terms of whether there’s a single point of failure. Simply storing data off-chain doesn’t introduce centralization — so long as we’re doing it thoughtfully,” he said.

Salnikov mentioned that the NFT marketplace, Rarible, uses IPFS to store NFTs. However, the platform is integrated with NFT.Storage to improve data integrity.

Speaking on the future of the NFT space, the experts have their own predictions. Victor said that NFTs would be used to represent more digital goods with more use cases entering the space. He also believed that the upcoming Ethereum (ETH) might boost NFT prices. Salinkov also said that Rarible is working on democratizing the storage and access of NFTs to bring its multichain vision of the space to life.

It is important to note that not all NFTs are stored off-chain using services such as IPFS. One project in particular that has been praised for storing the NFT’s metadata and images on the blockchain is CyberBrokers.

Is it a good idea to invest in NFTs now?

The experts have their advice and cautioned investors to be careful. He warned them not to get themselves into a situation where they would be forced to sell. Because NFTs are hardly liquid, he advised investors to build their portfolios, so they are not forced to make fire sales.

Salnikov, on the other hand, shared the ideas he had regarding the matter, such as observing things and looking at the bigger picture. He mentioned that price volatility in the market will always be a thing, but from a broader perspective, the value of NFT will continue to rise.


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