SummaryArea NFTs are the definitive geolocation digital collectible. They are Non-Fungible Tokens (NFTs) providing proof-of-ownership of all areas of the Earth in the Ethereum blockchain. They also support the digital asset ecosystem by providing a bridge between the digital world and the physical world. As they are built on a decentralized infrastructure, Area NFTs can facilitate the development of a myriad of applications, including location-based NFTs, augmented reality, and internet-of-things applications. Area NFTs are scarce and divisible by design, so they can be used as a core asset in the digital economy.

Background

Non-fungible Tokens (NFTs) provide cryptographically-verified ownership over a unique asset — usually a digital asset such as an art piece, a baseball card, or items in virtual worlds. NFTs have unleashed a new digital asset economy worth billions of dollars, demonstrating that they can create value in the real world — supporting artists, providing entertainment, and attracting interest from investors.

NFTs are also gradually breaking the barrier into the physical world. They are making their way into billboards, bus stops, physical galleries, and even auction houses. But this is only the beginning. In the future, we believe NFTs will become ubiquitous and integrated with the real world whether it is through location services on your phone, brick-and-mortar installations, or the internet of things (IoT). This will create the need for an open and decentralized standard for geolocation-based NFTs. Area NFTs provide that interface.

Encoding Locations on the Blockchain

The Open Location Code Standard — Plus Codes

Geocodes provide a way to translate text into a specific location on the Earth’s surface. Addresses and zip codes are examples of geocodes. However, they are specific to a country or location and not applicable across countries. Attempts to establish a standard geocoding system that would apply to the entire Earth have often lacked adoption — at least until recently.

In 2014, a team of engineers at Google in Switzerland developed the Open Location Code (OLC) standard, which has become widely adopted through the proliferation of geolocation applications. This is a system used not only by Google maps, but also by open source libraries such as Leaflet and OpenLayers, which power a myriad of map applications. The codes generated by this Open Location Code System are called Plus Codes.

Plus Codes are up to 15-digits long, and take their name from a “+” after the first eight digits and the remaining optional digits. For example, the code for the Empire State building in New York is 87G8P2X7+9P. Each unique code corresponds to an area between two meridians and two parallels in the standard longitude-latitude system. (WGS84)

Plus Codes made up of 2-digits followed by zeros represent 162 large areas on the surface of the Earth (20° latitude × 20° longitude). For example, the code 84000000+ represents an area encompassing most of the coast of California.

Plus Codes made up of 4-digits followed by zeros (at Area we call them tetras), further divide the surface into 400 one-degree areas — for a total of 64,800 areas globally. For example, the code 849V0000+ represents the area which includes the city of San Francisco and Silicon Valley. Area NFTs will be tied to Plus Codes at this level, but can be split into smaller areas later as described below.

Six, eight and ten-digit codes further divide each area into 400 smaller blocks in succession (we call them hexas, octas and decas). Beyond that, areas are split into 5×4 blocks. This gives the Open Location Code System the ability to map codes to very granular locations on the surface of the Earth. A full specification of Plus Codes is available here.

From Plus Codes to divisible NFTs

Each Area NFT provides digital proof-of-ownership of a specific Plus Code. The Plus Code also doubles as its token ID, which means that all ownership information is trivially stored on the blockchain. Each owner will also be able to give a name to each location.

The tokens are backed by an open-source and immutable ERC-721 compliant smart contract in the Ethereum blockchain. A bug bounty will be made available to ensure the code is free of security vulnerabilities.

While all ownership data is on-chain, an optional URI pointer will be available to support potential future applications, including the ability to serve information to marketplaces.

One-Time Sale

The entire Earth will be minted at launch. The sale will make available 4,000 packs of 10 random Areas each. To make the packs as interesting and varied as possible, large swaths of Ocean, Antarctica and the Arctic will be excluded (Plus Codes beginning with 2*, 3* and C*) and minted as 54 special NFTs of 2-digit codes. These will be special founder tokens to be shared with contributors or for future charity auctions. After the drop is sold out, 3,200 (~7%) randomly left over Areas will be reserved for developer incentives, giveaways and to develop proof-of-concepts in the future. Each 10-pack will be sold at a fixed price of 0.1 Ether.

Technical note: The initial sale contract will use a commit-reveal mechanism, relying on the hash of previous blocks to randomize the allocation of Plus Codes. Each purchase will commit to its own allocation, and reveal up to two additional previous purchases. If any commits are pending for too long, the developers will step in and submit an empty transaction to reveal the purchases of a previous buyer.

Splitting Areas

The initial Area sale will distribute the entire Earth in “tetras”, (except for some Ocean Areas, Antarctica and the Arctic as above). Each of these Areas will be large, and contain all of its respective lower-level Plus Codes. These more granular location will be “ghost-minted”, which means they are associated with an address, but cannot be transferred, sold or given until they are minted.

Once the sale is complete, the ability to split Areas will be unlocked. This is done via a separate transaction, which burns the original large token area, and mints individual tokens for each sub-area at the following level. This can be done multiple times until each token represents a 15-digit Plus Code.

While splitting an Area may seem attractive from a resale standpoint, there are potential downsides. First, this is a one-way process as it burns the original token — which may not be preferred by collectors. Second, it increases the number of NFTs available (albeit each NFT represents a smaller Area). In order to prevent frivolous splitting, the contract will launch with an initial fee of 4 Ether to split an NFT. This means that it will not be worth splitting a tetra unless the average price of each newly-created hexa will be at least 0.01 (plus Gas costs). This is the only contract parameter which can be changed, and will be subject to community consultation.

Decentralized Marketplace

Alongside the NFTs, we will release a marketplace contract. This will allow Area owners to offer them for sale, or accept bids from prospective buyers. The contract will be accessible via the Area website. The marketplace will charge a 5% fee on transactions. Areas can also be traded in any other NFT marketplace, or even via command line as they are just standard ERC-721 tokens.

Roadmap

The initial token sale is only the first step of a longer journey to become the definitive and standard geolocation NFT, Our roadmap has three initial phases:

Stage 1 — Launch

Stage 2 — Invest for the Future

Stage 3—Location-based NFT ecosystem

Conclusion

As NFTs become ubiquitous, the need to integrate digital assets with the physical world will only increase. Area NFTs will provide a foundation and platform to build the bridge between the metaverse and the physical world.