Cross-Chain Fake NFT Protection

[IMPACT] Please describe your proposed solution.

The Problem: Cross-Chain NFT Copies

Counterfeit and otherwise plagiarized NFTs are a big problem for Ethereum’s NFT ecosystem (1). And as NFT collectors become more savvy, and NFT trading volume moves out from Ethereum to other blockchains, we expect the majority of unauthorized copies of NFT collections to be cross-chain copies. In other words, bad actors will increasingly exploit market inefficiencies to re-mint copies of NFT collections on different blockchains - marketing these copies as original.

Because information about a given NFT project is mostly siloed within the ecosystem where it launches, the door is wide open for bad actors to create unauthorized copies of NFT art across different blockchains without buyers or marketplaces knowing they’re dealing with copies. 

And whereas NFT collectors can protect themselves from intrachain counterfeits on Cardano by verifying a legitimate collection’s policy ID (and Ethereum NFT collectors can do the same by referencing a verified contract address), the only way to verify a collection isn’t a cross-chain copy is to be familiar with all the collections minted on other blockchains - which is impossible given that there are currently roughly 10 million art and collectible NFTs on just the Ethereum and Flow blockchains alone (2) - not to speak of the many millions more NFTs on blockchains including Cardano, Solana, Tezos and others.

Moreover, even the DID-based solutions being developed to prevent NFT scams (like the one we’re working on with the team at proofspace.id) will fall short of stopping scams using cross-chain copies unless they’re combined with an additional solution. Because while DIDs can be helpful in mitigating frauds and scams, resources like the Twitter account, @NFT_Theft have documented countless cases where scammers have fabricated convincing, yet fraudulent identities to sell stolen digital art. 

Bad actors have already been discovered by the Cardano community trying to launch NFT collections with art stolen from collections on other blockchains, and because there’s no way to effectively monitor this problem, nobody knows how big the problem is.

ArgusNFT: Building Trust in NFT Markets

At ArgusNFT, we’re building AI-powered, industry-first solutions on Cardano to improve trust in NFT markets. 

To this end, we’ve built and launched Version 1 of Argus, a copy/counterfeit NFT detection protocol that currently supports all Cardano NFTs (You can learn more about Argus and try it out at argusnft.com.). 

After months of research into potential remedies for NFT plagiarism and scams, we’re confident Argus related services we’re developing will provide a 360o solution to these problems. And just days ago we finalized a partnership with JPG Store, the leading NFT Marketplace on Cardano. With this partnership, Argus will go a long way to deter NFT counterfeiters and reduce the number of counterfeit/fake NFTs being sold to unwitting buyers on Cardano. And the partnership will also provide the perfect environment to further train Argus' machine learning model and increase its accuracy over time.

However, Argus can only provide high assurance findings if it surveys the vast majority of NFTs across major NFT ecosystems, and not just the small fraction of NFTs minted on Cardano.

For these reasons, we realized early on that Argus would need to be a cross-chain protocol. And Ethereum is naturally the second blockchain ecosystem we’d like to integrate - for a number of reasons:

1. Because the largest pool of NFTs is currently on Ethereum, many (if not most) cross-chain copies of NFTs listed on Cardano will come from Ethereum NFT collections.
2. Cardano’s main competitor is Ethereum - both in terms of Layer One, smart contract blockchains, and in terms of NFT ecosystems.
3. Because the vast majority of pain from NFT scams and plagiarism is currently suffered by Ethereum users, these users are most likely to utilize NFT Asset protection services on Cardano, especially if the solutions we’re offering also protect the assets they’ve created or collected on Ethereum. And given current market conditions, Cardano’s cheaper minting and transaction costs will provide additional incentive for Ethereum users to use ArgustNFT services and launch NFT projects on Cardano.
4. The majority of the addressable problem of NFT plagiarism is on Ethereum, and just one to two SaaS agreements with Ethereum NFT marketplaces (which would likely result from Argus integration of Ethereum NFTs) could put our project on a sustainable path, allowing us to build out the suite of Cardano based services we’re planning. 
5. Developing a schema to integrate Ethereum NFTs should yield a template that’s useful in future integrations of NFTs from EVM-compatible blockchains like Avalanche, Fantom and Polygon. 

Our team has already invested weeks researching technical approaches to the challenges of Argus’ Ethereum integration, and if this proposal is funded, we’ll be in a position to build upon this work in the following ways:

1. Test what we believe to be the fastest way to access Ethereum NFT metadata from existing and newly minted collections.
2. Modify Argus’ Cardano protocol to parse, ingest and index relevant Ethereum NFT metadata.
3. Implement a proof of concept, developing a way to ingest and index all new Ethereum NFTs shortly after they’re minted, and beginning the process of integrating all existing Ethereum NFTs.
4. Market our early findings of fake/counterfeit, Ethereum NFTs to the Ethereum NFT community - advertising the protection services for NFT market participants we’re building on Cardano. 
5. Offer our Aegis asset protection protocol - which will support both their Cardano and Ethereum NFT collections - for free to prominent Ethereum artists who launch collections on Cardano.

Citations:

1. https://www.vice.com/en/article/wxdzb5/more-than-80-of-nfts-created-for-free-on-opensea-are-fraud-or-spam-company-says
2. Nonfungible, NFT Market Quarterly Report Q1, 2022. 

[IMPACT] Please describe how your proposed solution will address the Challenge that you have submitted it in.

Challenge KPI # 1: Number of projects that migrate

Motivating respected NFT artists to migrate from Ethereum to Cardano is an ideal way to catalyze migration of projects from Ethereum to Cardano, for a few reasons:

Prominent NFT artists can bring a comparatively large number of smaller projects to Cardano, relative to the investment needed to incentivize their migration.

Skilled and prominent artists have followers who love their work. Many of these followers will likely take the cue from artists they like to buy NFTs on Cardano - and stick around for the better security, trust, and vastly lower gas fees. Likewise, NFT artists often belong to tight-knit artist communities that follow each other’s creative choices, so any success we have in breaking through to even a moderate number of artists could start a self-reinforcing cycle.

Challenge KPI # 2:

Number of users of these smart contracts once migrated to the Cardano ecosystem

There are several downstream benefits of our proposal's approach to increasing the number of users on Cardano and usage of Cardano smart contracts:

Aegis is an image registry and notification service we’re building on top of Argus that empowers NFT creators and collectors to protect themselves from bad actors attempting to sell unauthorized copies of their assets. It notifies creators and collectors where and when copies of their registered artworks (and/or NFTs) are minted or listed on an NFT marketplace, and largely automates the IP takedown application they need to submit to a marketplace to stop bad actors from selling their assets. 

Once Aegis is complete, our funded Fund8 Catalyst proposal will enable us to offer this service free to established Ethereum NFT artists and project owners who agree to launch projects on Cardano. While we expect this to be a powerful marketing opportunity for the Cardano NFT ecosystem, we also realize creators and collectors whose NFTs are mainly on Ethereum will only pay for Aegis if the service protects their Ethereum NFTs. 

Once Argus supports Ethereum NFTs though, we believe it will drive a sustainable flow of adoption - and with it, numerous Cardano transactions: There’s currently no robust solution for protecting Ethereum NFT creators and collectors from intrachain counterfeits, let alone cross-chain copies. So if we can provide this service on Cardano at a reasonable price with low transaction fees, we see this as an important first step in adoption by Ethereum NFT market participants. And once we’re in a position to provide a DID-powered NFT solution alongside Argus (DID Solution Proposal), along with NFT discovery tools that act as a window into the Cardano NFT ecosystem (search engine proposal URL), we believe this will be a powerful recipe for increasing activity on Cardano.  

[IMPACT] What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

We’re confident in our team’s ability to implement the integration of Ethereum NFTs on Argus. Below we’ve provided a summary overview of our technical approach to this problem, and we have familiarized ourselves with the issues involved enough to know there are ways to overcome the technical challenges of the problem. 

However, there’s a considerably higher risk that once our technical solution is developed, it will fail to garner widespread adoption among NFT market stakeholders, and this could threaten the long term sustainability of the services we’re building. 

The first factor that could jeopardize adoption is NFT market stakeholders not understanding the scope and nature of problems relevant to NFT scams and plagiarism. Thankfully, so far marketplace operators seem to understand the problem and the importance of Argus as a component of an overall solution to combat NFT market abuses. In the current market landscape, marketplaces are responsible for manually verifying projects and are answerable to customers who mistakenly buy counterfeit NFTs. That said, higher volume marketplaces have been excited about Argus, which can greatly reduce risk to their customers - especially as cross-chain copies inevitably become more pervasive and manual, project verification methods become less effective. Happily, we have partnerships in the works with NFT marketplaces on Cardano, and are excited to announce them as soon as they’re finalized.

Still, other stakeholders may not be as convinced about how essential Argus is as a tool to combat NFT plagiarism and scams. For this reason, we’re developing relationships with many key stakeholders in the Cardano NFT community, and participating in conversations facilitated by Cardano’s NFT Guild on the adoption of NFT authentication and project verification standards, and will. 

The last, major risk we see is reduced demand for our services in the short term due to adverse market conditions. This risk has indeed made us prioritize Argus’ integration of Ethereum NFTs, because just one SaaS agreement with one of the leading Ethereum marketplaces could sustain our small team’s operations, even if markets continue to worsen in the short-to-mid-term. And we also consider it an advantage that our team is very small, highly skilled, trusted and well connected in the Cardano community, so we’re confident we can keep making steady progress on project goals, even in the face of adverse market conditions.

[FEASIBILITY] Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

Technical Approach 

• Our team has identified a method for accessing Ethereum NFT metadata from ERC721 and ERC1155 smart contracts in part by using the Graph Protocol, which is a decentralized protocol for indexing and querying data from blockchains.
• Once this information is accessed, we have already devised a method by which Cardano metadata can be parsed, ingested and indexed for Argus integration. So we’ll just need to modify this protocol to accommodate Ethereum NFT smart contract metadata standards. We’ll use an incremental approach in this process, starting with the highest value, Ethereum NFT collections.

Roadmap

• Research and review Ethereum API-centric explorers to access NFT metadata

(70% complete) ( 5 weeks)

• Build a PoC to confirm tenability of data access approach

(10% complete) (3 weeks)

• Create data storage layer to store 

(0% complete) (2 weeks)

• Upgrade ArgusNFT to partition NFT data by blockchain

(0% complete) (1 month)

• Implement integration between Database and Argus NFT

(0% complete) (1 month)

[FEASIBILITY] Please provide a detailed budget breakdown.

Project Budget:

• Research Integration of Ethereum (Labor) - $12,000

• PoC for Accessing (Eth) NFT Data (Labor) - $7,500

• Implementing Argus / Ethereum Integration (Labor) - $17,500 

• Upgrade Argus for blockchain partitioning - $10,000

• Cloud ($500/month for three months) - $1,500

• Product Survey - $1,250

• Social Media Marketing (part-time, $750/month for 2 months) - $1,500

Total Budget: $51,250

[FEASIBILITY] Please provide details of the people who will work on the project.

ArgusNFT is developing a suite of cross-chain solutions to improve trust and discovery in in NFT markets. Argus, which is ArgusNFT’s flagship product, is an industry-first solution to the problem of fake/counterfeit NFTs and plagiarized artwork being sold as NFTs. It employs artificial intelligence and machine learning (AI/ML) to verify the minting history of NFTs, providing stakeholders information they need to determine whether an NFT is an original or a copy. Agrus currently supports all Cardano NFTs, and R&D is ongoing to integrate support of additional blockchains to protect against cross-chain copies. LinkedIn | Twitter

The members of the ArgusNFT team supporting this proposal include:

• Giovanni Gargiulo - Cofounder of ArgusNFT. Principal Software Engineer with 15+ years of commercial experience. DevOps advocate with strong experience in Machine Learning, distributed systems and cloud. Cardano Plutus Pioneer, Stake Pool Operator and Open Source Developer. Linkedin, Git
• Anthony Capitan - Cofounder of ArgusNFT. Entrepreneur with 7 years business development experience, 15 years sales, marketing and project management experience. Business development advisor to a number of early stage Cardano projects. Linkedin
• Jaime Caso - Full Stack and Mobile Engineer - Stake Pool Operator and Cardano Wallet Developer. Linkedin, Git
• Kurt Hartmann - Kurt Hartmann has 20+ years of experience as a developer and architect working as an IT consultant for companies in the financial, health, and retail industries. His areas of expertise include modernizing and integrating legacy systems, ETL batch jobs, building API data sources, and implementing workflow patterns using micro-services and messaging. He also has a solid background in database design and web services. He participated in the Cardano Plutus Pioneer Program (cohort #1) and has spent significant time learning the Haskell programming language. Git
• Natasha Younge - received an MBA in management, and has provided social media consulting and management to several Web3 projects, where she focuses on Twitter and Twitter Spaces to cultivate community growth and engagement. LinkedIn

[FEASIBILITY] If you are funded, will you return to Catalyst in a later round for further funding? Please explain why / why not.

Funding this proposal will enable our team to develop a Proof of Concept for Argus' integration of Ethereum NFTs, and allow for the integration of a large number of the highest value Ethereum collections and NFT art. However, the integration of all or the vast majority of Ethereum NFTs will entail scaling and hardware requirements that are beyond the scope of this proposal. So while we're building Argus to be highly scalable, it's possible we'll propose Catalyst funding in the future to scale Argus further.

Additionally, we plan to build an NFT search engine, and will possibly propose Catalyst funding of multi-chain support of this search engine if and when it's launched on widely used on Cardano.

[FEASIBILITY] Are you or any member of your team working on any other proposals in this Fund9?

[FEASIBILITY] Are you or your team working on any other proposals from previous Funds?

[AUDITABILITY] Please describe what you will measure to track your project's progress, and how will you measure these?

• Publication of project deliverables through monthly reports, which will demonstrate adherence to the work plan.
• Post-launch, create, conduct and publish findings from a product survey of no less than 50 market participants to gauge user interest in the product, it's strengths and where there's room for improvement.

Functional goals:

• Reduce % of counterfeit NFT sold on marketplaces by 25% by September 1st (based principally off jpg.store partnership)
• Secure first Argus API agreement with Ethereum marketplace by February, 2023

Non-Functional goals:

• B2C NFT history/counterfeit should take no longer than 5 seconds to compute
• ArgusNFT should have decent uptime 95%+

Number of NFT Creators Onboarded:

• At least 4 respected Ethereum artists and 2 artists whose work has been plagiarized on Ethereum, onboarded by October 1st.
• At least 8 respected Ethereum artists and 4 artists whose work has been plagiarized on Ethereum, onboarded by November 1st.
• At least 12 respected Ethereum artists and 6 artists whose work has been plagiarized on Ethereum, onboarded by December 1st.

Social Media Metrics:

• 1k followers on Twitter by September 1st
• 2k follower on Twitter by November 1st
• 4k followers on Twitter by January 1st

[AUDITABILITY] What does success for this project look like?

• Significantly decreasing number of counterfeit/fake NFTs sold on Cardano marketplaces
• Significantly increasing number of artists migrating to Cardano from Ethereum and other blockchains
• Significantly increasing volume of NFTs traded on Cardano
• Significantly increasing number of NFT collectors and artists citing superior security and trust as a strength of the Cardano NFT ecosystem

[AUDITABILITY] Please provide information on whether this proposal is a continuation of a previously funded project in Catalyst or an entirely new one.

Yes, our Fund8 proposal, Scaling CNFTs, minus the Eth mess, is funding the refinement of Argus and development of Aegis (outlined above), and this Fund9 proposal will integrate Argus and Aegis support of Ethereum NFTs, protecting market participants in both ecosystem from cross-chain copies, and incentivizing Ethereum project owners and collectors to purchase Aegis on Cardano.

Sustainable Development Goals (SDG) Rating

SDG # 9: "Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation."

Target 9.1 is: "Develop quality, reliable, sustainable and resilient infrastructure, including regional and trans-border infrastructure, to support economic development and human well-being, with a focus on affordable and fair access for all"

Target 9.5 - "Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries, in particular developing countries, including, by 2030, encouraging innovation and substantially increasing the number of research and development workers per 1 million people and public and private research and development spending."