Create an NFT for helping people in need

I am currently working with a friend to raise funds for helping people in need. I have the vision to create NFTs that help the donors verify that the donation has actually an impact, basically the NFT should be a ´proof of donation´ type thing, and can also be seen as a badge or proof for the owner, that the donation is true (tax ride off). In order to do this, we intend to start with an NFT that represents a water filter that lasts for two years. the water filters costs around 60 USD and can help a family to have access to water for two years. Once the donation occurred, we would send the NFT to the owner (or if so desired hold it for them as many donors might not be familiar with NFTs yet). We will then use the funds and purchase said filter and bring it to a family. We will take a picture and implement it later to the NFT so everyone can see that it happened and also which family they helped. It should lower the issue around many NGOs about their rather bad reputation.

In order to do this though, I would need some advice. First, what do you guys think of it?

Is there a way to change the metadata in the NFT without the owner having to send their NFT and manually burning and minting updated versions of it with the picture of the donation in it?

Could a list of all NFTs given out (with the metadata available to check the pictures of the families) be implemented into a website so people can check themselves about the donations?

If someone is willing to help me through this, I would highly appreciate it. I know how to mint simple NFTs but I am not really familiar with the coding language of Cardano and have never built something like this, so I am a bit hesitant and insecure about how to do it properly.

thanks

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This is a pretty great idea regarding using tokens as proof of action simultaneously with proof of ownership for who made that action possible.

There are a few approaches that come to mind to get the ideas and discussion flowing:

  1. Collect the donation and provide a traditional receipt describing how the token can be optionally claimed. Upon completion of the filter install and picture being taken you can then upload the image to IPFS and create the token linking to it with any additional meta data details desired. This token can be registered with meta data server as usual and transferred to donator upon request.
  • Pros: Simplest integration with existing eCommerce solutions allowing donations to be made in any currency. Also allows tokens to be maintained by the non-profit organization for donators who don’t want to participate in blockchain for posterity and/or promotions. e.g. distributed NFT donation gallery of those helped so far that is searchable/viewable by anyone.
  • Cons: For cryptocurrency enthusiasts this is a centralized solution that puts all trust in the non-profit organization which seems to be one of your use cases to avoid.
  1. Use of a smart contact to negotiate the donation and generate the NFT token immediately with a link to a placeholder image with IPNS. Unlike with IPFS where the link and data are static but distributed IPNS allows the link to be static but the data it points to be updated. Once the filter is installed the real picture can be uploaded to a server and identified by the token hash already pointing to it.
  • Pros: Provides guarantees of receiving the token in exchange for the donation. Can be mostly decentralized.
  • Cons: Someone still has to supply the real image data at a future point. These hashes aren’t very human readable or useful on meta data servers. Limits donations to cryptocurrency savvy users.
  1. Hybrid approach. Create two tokens. One that is strictly for proof of donation that can be transferred to the donator with relevant tax data about the amount, date, etc in meta data. Later create a proof of work token that links to the IPFS image and has additional meta data about the sponsored family. The second token can also reference the first token to complete the link back to the original donator!
  • Pros: Covers all use cases and has potential to be completely decentralized through smart contracts.
  • Cons: This would be the least cost-effective approach in terms of effort, time, complexity, etc.

Further reading on IPFS, IPNS, ENS, etc: https://blog.fleek.co/posts/immutable-ipfs

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DinoDude, thank you very much for your insight. I really appreciate it a lot and I consider all approaches as very useful for what I intend to do.

As of now, option 3 I do not fully comprehend yet. Why make the second token PoW? Just for security reasons? I was originally thinking of making two tokens, all NFTs, one that proofs that the donation happened and one that can be redeemed later for the updated version with the picture, family info etc. the first token can still be used as a proof of donation for tax etc., the second one is proof of ownership of that donation for the donor, more like a verification that the organization did what they promised. Keep both tokens (proof of Donation and proof of Arrival of Donation) might be a good idea, as one could hold a second token (proof of Arrival of Donation) without having actually donated, so he must hold the first to use it as a tax ride off (no idea if that would actually happen in real world though…).

to the second option: definitely a good idea, especially because it would lower the workload of minting new tokens and sending them out again (option 3 - if I understood it correctly).

I love the first option, as most people might not be crypto enthusiasts (yet) and hence be scared to having to learn about crypto, wallets etc. in order to receive the token etc.

My thinking right now is, that I might approach the first solution, as it has a more conventional approach and thus is easier to handle for non crypto people. it is more work and centralized though, but for now most important is to start using NFTs and getting funds. or maybe create two solutions, for people that donate with FIAT and crypto savvy people that need solid proof and decentralization. or just implement the option 3 later down the road as it would be hard to implement it from the get go. I also think that a community platform can help gain trust in the beginning. What do you think?

Sorry, poor choice of words.

I didn’t mean “proof of work” like BTC or ETH protocol I meant a separate NFT on Cardano with the meta data needed to show the water filter job was completed successfully. The idea is only mint when you have the necessary inputs …

The general problem with “updating” a uniquely minted token like an NFT is that you either need to maintain ownership, reclaim (burn) and re-mint as you originally suggested, or provide a significantly more complex smart contract mechanism such as vesting the token to “lock-in” the period of time it takes to provide the image and other data missing at the time of execution of the original transaction.

It’s much easier to simply mint the token with the data already available as inputs. You may not even need smart contracts to implement something simpler like that with Cardano multi-asset ledger support!

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Got ya. I was wondering how the PoW could use IPFS.

I read the article you linked as well, its interesting. It seems that we currently have the issue of it (websites, files, NFTs) being stored and immutable on the chain for ever or it being mutable but then also being more prone for bad actions. Will be interesting to see how this issue will be tackled down the road. for now, I guess I will just mint simple tokens once the donation is handed out with all the data already included and hand them out to the donor. The NFT can hold the name of the donor so it will be clear he is the real donor.

One last thought,

Blockchains are inherently public ledgers. Make sure you do not put any personal information into token meta data. At the very least acquire consent and keep compliance history in a database before using names. Actually you may want to consult a lawyer …

There are enough privacy concerns online for brand new laws requiring disclosure of cookies and session storage in browsers etc. Blockchains are not exempt and it’s likely to get much stricter in the future as more problems arise from the lack of a secure digital identities.

e.g.

Good token might include user name alias, amount, date, IPFS hash, etc
Bad tokens include real legal name, address, email, website, etc

sure, yes, I would obviously acquire consent before adding any personal data. Which I would only implement in case donors would like to use the NFT as a tax ride off. That is mainly the only reason to do so. otherwise, it would be a picture of the donation with an index number (even here I will acquire consent with the people, maybe just take a picture of the house or a location) that would match the number in the token. I am considering using something like encrypted meta data to send info that only the participants of the transaction can read, e.g. picture of family, etc.

I do have a lawyer and I will ask him about this concern. thanks