0051 XLS-51d: NFToken Escrows

[mvadari]

Title:       NFToken Escrows
Revision:    1 (2023-11-17)

Author:      Mayukha Vadari

Affiliation: Ripple

NFToken Escrows

Abstract

The XRP Ledger currently only supports escrows for one type of token: XRP. Now that XLS-20 is live on the network and there are almost 4 million NFTs on the ledger, users may want to also be able to put their NFTs in an escrow, just as they would with their funds.

1. Overview

This spec proposes modifications to one existing on-ledger object and one existing transaction:

• Escrow ledger object
• EscrowCreate transaction

This change will require an amendment, tentatively called featureNFTokenEscrow.

2. On-Ledger Object: Escrow

The Escrow object already exists on the XRPL. We propose a slight modification to support NFT escrows.

2.1. Fields

As a reference, these are the existing escrow object fields.

Field Name	Required?	JSON Type	Internal Type
LedgerIndex	✔️	string	HASH256
LedgerEntryType	✔️	string	UINT16
Owner	✔️	string	AccountID
OwnerNode	✔️	string	UInt32
Amount	✔️	Amount	Amount
Condition		string	Blob
CancelAfter		number	UInt32
FinishAfter		number	UInt32
Destination	✔️	string	AccountID
DestinationNode	✔️	string	UInt32
DestinationTag		number	UInt32
PreviousTxnId	✔️	string	HASH256
PreviousLedgerSequence	✔️	number	UInt32
SourceTag		number	UInt32

We propose these modifications:

Field Name	Required?	JSON Type	Internal Type
Amount		Amount	Amount
NFTokens		array	STArray

2.1.1. Amount

The Amount field is still used as it currently is, but it is now optional, to support escrows that only hold NFTs. An Escrow object must have an Amount field and/or an NFTokens field.

2.1.2. NFTokens

The NFTs that are in the escrow. One escrow can hold up to 32 NFTs, equivalent to one NFTokenPage.

NFTs stored in an escrow cannot be burned (and cannot be modified either, if XLS-46 is enabled).

3. Transaction: EscrowCreate

The EscrowCreate transaction already exists on the XRPL. We propose a slight modification to support NFT escrows.

3.1. Fields

As a reference, these are the existing EscrowCreate fields:

Field Name	Required?	JSON Type	Internal Type
TransactionType	✔️	string	UInt16
Account	✔️	string	AccountID
Amount	✔️	Amount	Amount
Destination	✔️	string	AccountID
Condition		string	Blob
CancelAfter		number	UInt32
FinishAfter		number	UInt32
SourceTag		number	UInt32
DestinationTag		number	UInt32

We propose these modifications:

Field Name	Required?	JSON Type	Internal Type
Amount		Amount	Amount
NFTokenIDs		array	STArray

3.1.1. Amount

The Amount field is still used as it currently is, but it is now optional, to support escrows that only hold NFTs. An EscrowCreate transaction must have an Amount field and/or an NFTokens field.

3.1.2. NFTokenIDs

This field contains the NFTokenIDs of the NFTokens that the user wants to put in an escrow. There can be up to 32 NFTs in an escrow.

Appendix

Appendix A: FAQ

A.1: Why not use a separate NFTokenEscrow object?

That felt like an unnecessary complication and would involve a lot of repeated code.

A.2: Can I put XRP and NFTs in the same escrow?

Yes.

A.3: Why is this so much simpler than for issued currency escrows?

The complication with issued currencies is that they must be held by accounts in trustlines. There is currently no way for a ledger object (such as an escrow) to own another ledger object (such as a trustline).

NFTs have no such requirement - all that defines an NFT is the NFTokenID and the URI, which can easily be held by an object instead of an account.

[xVet]

Great addition!!

[LetsEffingGo]

Could this open up the possibility of trustless P2P trading?

[ObiajuluM]

Nicee

[tequdev]

Very interesting proposal!
It’s better to clarify that NFTs in escrow cannot be burned.

[mvadari]

Good point, added 🙂

[ckeshava]

Very nice proposal! Ease of trade in NFTs should help the liquidity of the ecosystem.

Are you planning to transfer the ownership of NFTs into the Escrow? We need to prevent all modifications (transfer, deletions, etc) whilst the NFT is inside the Escrow.

Alternatively, we could perform ownership pre-requisite checks on Payment transaction types. This could vet that NFTs under Escrow are not being transferred. How can we implement this proposal?

[mvadari]

Yes, the ownership of the NFT moves to the escrow. It defeats the purpose of an escrow if anything can affect the NFT while it's in escrow.

[tequdev]

Not in the scope of rippled, but how are NFTs in escrow supposed to be handled in Clio's NFT methods(nfts_by_issuer, nft_history, nft_info)?

[mvadari]

They should probably still show up in those methods.

[mvadari]

One problem that I realized with this spec: you could use this to force someone to take an NFT without going through the standard accept flow. There is no way to accept an escrow right now.

This problem needs to be solved before this spec can be implemented.

Some possible answers:

• Add a mode to escrows that forces them to be accepted by the destination in order to be transferred, and alongside it a new transaction, EscrowAccept, that can be submitted at any point that the escrow exists (but before it is finished) in order for the NFT(s) to be transferred
• The EscrowFinish transaction must be submitted by the destination

[mvadari]

DepositAuth supports the destination finishing an escrow as equivalent to accepting it, so perhaps that flow makes the most sense.

[shortthefomo]

I won't put my feelings hating on as they sway to IOU's first.

But some over sites, for finish events on this spec.

EscrowBurn - burn NFT on finish.
EscrowCross - cross any open order on completion (obv take the best one).
EscrowCross - spec currency only to consider.

[mvadari]

I don't understand the need for burning an NFT on finish - why not a) finish the NFT then burn, or b) burn the NFT instead of sticking it in escrow? Ditto with selling it on finish.

[shortthefomo]

If it's conditional means the condition would need to have been met for the action to take place.

[mvadari]

I don't understand your comment. Can you elaborate?