What Are On-Chain NFTs?

TL;DR
On-chain NFTs are entirely self-contained on a blockchain and don’t rely on any external components, making them robust and fully crypto-native. There are several important on-chain projects, some of which have been highly influential in the history of NFTs, and become very collectible.

One of the criticisms you sometimes see of NFTs is that you’re not actually buying an image, you’re buying a token that points to an image. This is often true, but not in the case of on-chain NFTs. To get an idea of the difference between on-chain NFTs and off-chain NFTs, and why, or whether, it matters, let’s clear up the distinction, and then look at some notable collections.

What’s the Difference Between On-Chain NFTs and Off-Chain NFTs?

For the purposes of comparison, let’s imagine we’re buying NFTs related to art and PFPs, meaning we’re buying images.

• Off-Chain: This means the token itself–the thing you buy and hold in MetaMask or whichever wallet you’re using–doesn’t actually contain an image. Instead, the NFT points to an external, off-chain image.
• On-Chain: When an NFT is on-chain, it means that everything, including either the image or the components to create the image, is kept–exactly as the name suggests–right there on the blockchain, with no external components.

The off-chain approach has been useful as it offers a data storage workaround, allowing for more data to be held, more economically, than is possible with the on-chain method, since blockchain space is limited.

Why Does On-Chain Matter?

There are times when it doesn’t matter at all. At the height of NFT bullishness when new launches mooned regularly, no-one cared where their JPEGs were actually stored. Actually, I’m not sure people were even looking at the JPEGs at all, they were too busy watching floor prices go up.

But now that the mania has calmed down, we can see how on-chain NFTs have desirable properties. Mainly, in that they don’t rely on externalities, which means as long as the blockchain itself is up and running, then the NFT–meaning everything: token, artwork, images–is up and running too.

And as well as being practically more robust, this stays truer to the point of crypto: clean and elegant, everything is on the blockchain, everything is self-contained, and no third parties are required.

Also, from the point of view of long-term holders, on-chain NFTs may have an edge as collectible items. Not only are they never going to disappear (as long as the blockchain itself doesn’t disappear), but–because they’re 100% blockchain-based–they’re more interesting from a purist tech perspective.

Which NFT Collections Are On-Chain?

Let’s take a look at some noteworthy, fully on-chain NFT collections. This is not a comprehensive list and there are many more to discover, but these ones stand out.

CryptoPunks

Arguably the most famous NFTs of all, CryptoPunks actually did not start as an on-chain collection. In August 2021, after the collection had launched in June 2017, original creators Larva Labs (the IP was later acquired by Yuga Labs) shifted CryptoPunks fully on-chain, adding to the perception that the collection has unalterable historic status.

Mooncats

This collection appeared a little after CryptoPunks, minting some NFTs upon launch in August 2017 and then being retrieved from obscurity and minting out the full collection in 2021, but it was on-chain from the very start, occupies a unique place in crypto history, and can, at the moment, be picked up relatively cheaply.

Autoglyphs

Also created by Larva Labs, the makers of CryptoPunks, this minimalist generative art collection was constructed directly on-chain in 2019, is limited to only 512 pieces, and has become influential and very valuable.

Deafbeef

In the realm of left-field on-chain art that expertly combines glitchy visuals with equally glitchy synth soundtracks, there’s a well respected artist who goes by the name of Deafbeef and consistently produces the goods. Deafbeef’s creations are original, scarce and have become very collectible.

Terraforms

And for another on-chain, techy art project, take a look at Terraforms by Mathcastles. Created in December 2021, this is a solid collection for anyone interested in generative art and blockchain experimentation.

Nouns

OG project Nouns has been creating and auctioning off one NFT a day since August 2021, and the process takes place entirely on-chain. Each item is generated from parts stored on-chain, by a contract that is on-chain, and the resulting NFT is placed, you guessed it, on-chain.

Moonbirds

This big-name project adopted an on-chain approach from August 2022, placing the layers used to assemble its PFPs on Ethereum along with a rendering contract. Moonbirds calls this approach in-chain, but the result is that everything happens right there on the network.

Cryptoadz

Created in 2021 by the artist known as Gremplin, a famous figure in the NFT art world, these 6,969 blocky 8-bit toads are copyright free and maintain an impressive level of cult status for anyone wrapped up in the world of blockchain collectibles.

OnChainMonkey

In September 2021, OnChainMonkey (OCM) minted 10,000 on-chain PFPs, which then gained in value in 2022 before dipping in line with the unfolding bear market. However, even as 2023 has seen many collections crashing, OCM has been resurgent since February, when it recreated its Ethereum collection as Bitcoin Ordinals (more about this format below), meaning the project is now on-chain across two different networks.

Every Bitcoin Ordinal

If on-chain is your priority, then take a look at Bitcoin Ordinals, which, basically, function as NFTs on Bitcoin, and where every project is fully on-chain. This is due to the way Ordinals are created (or inscribed, as the process is known), with items placed immutably onto single satoshis on the Bitcoin blockchain.

Some notable Ordinals collections include Ordinal Maxi Biz, BTC DeGods, Uncommon Patterns by Nullish, Twelvefold by Yuga Labs, and Inscribed Pepes.