The issue has alerted NFT traders of how important it is to keep NFT data on-chain and not on third-party web2 servers.
FTX exchange NFTs show blank images instead of artwork
As a result of the FTX collapse, the FTX website now points to a bankruptcy page. NFTs that were created on FTX exchange now display a blank image while direct links to an FTX exchange NFT now point to the bankruptcy page.
The metadata for the majority of NFTs on the market is hosted on web2 servers such as Amazon Web Service or even Google servers.
If Amazon Web Service or a web2 data server were to shut down, the metadata of NFTs that have their information stored there will be lost.
Many NFT traders were aware of the risks that came with hosting NFT metadata on web2 servers, but most creators ignored the potential future issues. Since the FTX collapse, a few NFT speculators have warned others about the risks of web2 hosting and urged NFT creators to host their metadata on-chain.
Hosting NFT data on-chain is harder to do but will ensure that the metadata of an NFT will never be lost or corrupted. Some popular on-chain NFTs that have their metadata ingrained into the Ethereum blockchain include Nouns DAO, Chainrunners and OnChainMonkey.
With NFT sales reaching a 16-month low following FTX’s demise, NFT traders may be in for a bumpy ride.
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