CIP-25 places a JSON document in the minting transaction's metadata under the label 721, keyed by the token's policy id and asset name. The document carries a name, an image (usually an ipfs:// link), an optional mediaType, and any number of custom attributes. Because the data is written at mint time as transaction metadata, it is cheap and simple, and it became the de facto way NFTs are described on Cardano.
The trade-off is that the metadata is effectively frozen: it can only change if the policy stays open and the token is re-minted, which most collections deliberately prevent by time-locking the policy. When a project needs metadata that a smart contract can read on-chain or update over time, CIP-68 is the newer alternative that stores the data in a datum instead of in transaction metadata.
Sources
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- NFTA token that represents ownership of a specific unique item, recorded on-chain; anyone can copy the picture, but only one wallet holds the original record.View term
- Native TokenA token created and managed directly on the Cardano blockchain using its built-in token functionality, without requiring smart contracts.View term
- Policy IDThe unique on-chain identifier of a native token's minting policy.View term
- CIP-68A token metadata standard that stores an asset's metadata in an on-chain datum a smart contract can read and update, rather than in the frozen transaction metadata used by CIP-25.View term