In this article,
ERC721, the underlying protocol standard for NFT on Ethereum, is the most basic metadata structure protocol standard for NFT on Ethereum. Two NFT assets cannot be exchanged, and based on this feature, it also has many application potentials.
With the development of the NFT track, the application of NFT is becoming more and more extensive. In addition to the earliest works of art, collectibles, and PFP, which accounts for half of the market value of the NFT track, it is also using game props, music works, domain names, etc. Many new forms are aimed at Web3 users. Of course, the most basic ERC721 protocol standard only has the most basic native NFT features, and it cannot meet the further needs of market development in a native form without building an external mechanism, such as nested combinations, royalty distribution, leasing, batch transactions and more.
With the deliberation and testing of the Ethereum development team, after successively passing the NFT protocol standard proposals with different characteristics, based on the ERC721 standard, the NFT protocol standards have been continuously enriched, such as ERC1155, ERC998, etc., based on these new protocol standards. The original NFT has different characteristics and matches the growing NFT market demand.
In addition, there are some NFT protocol standards in the form of "EIP" improvement proposals (proposals still under discussion), such as EIP4907, EIP/3664, etc. EIP proposals generally include design documents containing technical specifications and design logic. From the user's point of view, ERC is essentially the same as EIP. They are optimization proposals put forward by Ethereum community developers for the protocol. However, when EIP is approved by the Ethereum community (of course, this process needs to be conce After a series of processes such as draft, finalization, stagnation, withdrawal and dynamics) and finally be applied on a large scale, EIP becomes the ERC standard.
This article will briefly review and sort out some major NFT underlying protocol standards in the current Ethereum market.
ERC721: NFT protocol standard basis
ERC721 is the earliest and most basic NFT underlying protocol standard on Ethereum. It was proposed by Dieter Shirley, technical director of Axiom Zen, in September 2017, and formulated by William Entriken, Dieter Shirley, Jacob Evans, and Natassia Sachs in 2018. As a non-homogeneous token smart contract standard interface, it allows the issuance of NFT based on ERC721. It stipulates that the minimum unit of NFT assets is 1, indivisible and non-homogeneous (unique). ERC721 is currently One of the main normative standards and foundations of NFT assets (and also provides a reference for the formulation of NFT standards on other chains), most NFTs in Ethereum are currently ERC721 standard.
CryptoKitties is the earliest application case of the ERC721 NFT standard. After the CryptoKitties became popular, the NFT with ERC721 as the main technical standard was further adopted, and with the continuous enrichment of its narrative, it was favored by investors.
ERC1155: Batch processing of NFT assets by a single smart contract
ERC-1155 was proposed by Enjin Chief Technology Officer Witek Radomski and other developers, and the first version of the standard was placed in Ethereum's Github library on June 17, 2018, which can be mainly used for the generation of props in the game industry and processing.
The feature of ERC1155 is that it can issue multiple NFTs (or FTs) at the same time based on one contract, allowing users to reuse homogeneous or non-homogeneous tokens in the same smart contract indefinitely, and it can be minted at one time A variety of Ethereum standards for large quantities of homogeneous and non-homogeneous assets. This means that ERC1155 allows us to issue both homogeneous and non-homogeneous tokens. When there is a demand for both homogeneous and non-homogeneous tokens, we can issue them on this standard without switching to other standard. At the same time, token assets can be transferred in batches based on ERC1155, and multiple token assets can be transferred to different objects in one operation.
Judging from the previous process of issuing ERC721 standard NFTs, we need to issue and transfer them one by one on the contract, which is not only inefficient but also expensive (Gas fee), while ERC1155 can greatly improve efficiency and reduce costs. Widely used by some GameFi projects.
At present, the Enjin network is one of the applications that support the ERC1155 protocol standard (supports issuance). In addition, The Sandbox also uses ERC-1155 as its preferred token standard. With the development of the NFT track, ERC-1155 is expected to be further adopted.
ERC998: Composable Token Features
The ERC998 standard was originally proposed by the well-known developer Matt Lockyer on April 15, 2021, as an idea called Composable NFTs (CNFT), and was adopted by some GameFi in 2022. used by the project.
ERC998 is an underlying protocol standard that allows any NFT to be bundled with other NFTs or FTs. Users can realize the entire hierarchical structure and ownership transfer of CNFTs when transferring CNFTs. Briefly, ERC-998 can include multiple tokens in the form of ERC-721 and ERC-20. For example, an NFT item in a game can contain multiple ERC721 standard tokens and a combination of ERC20 tokens (obtained in the form of upgrades, fusion, etc.), and the ERC998 NFT item can be traded and transferred as a whole. Greatly simplifies the ownership and trading behavior of NFT assets.
ERC1948: readable, mutable information
ERC1948 can be understood as a dynamic version of ERC721, which not only has the basic features of ERC721, but also adds a 32-byte data field to NFT on the basis of ERC-721, and allows users to access the NFT Read function, the owner of the NFT has the permission to update the data.
Although ERC1948 has certain limitations on the capacity of data storage, the ERC-1948 protocol allows NFT to have the ability to store dynamic data, such as changes to some prop attributes, values, etc., and based on this, as it can The ability to store data is further improved, and it will have a very important application prospect.
ERC2981: Royalty
A few months ago, there was a lot of controversy surrounding the royalties of NFT works (mainly artworks and collectibles), and users with different positions had different opinions on whether to charge royalties for each transaction. In the early days, the royalties were usually set through the NFT trading platform. For example, on OpenSea, the royalties paid by the buyers to the NFT creators are set by the NFT creators themselves, and the maximum cannot exceed 10%. OpenSea will transfer these NFT royalties Earnings are transferred to the receiving address specified by the NFT creator every two weeks.
However, ERC2981 is embedding the royalty mechanism into the asset during the issuance stage, that is, every time the NFT transfers a transaction, part of the royalty will be deducted from the transaction amount (the royalty can be customized according to fixed, attenuation, dynamic, etc. ), which means that creators will no longer depend on NFT trading platforms to obtain royalties, and further help NFT creators increase their income channels.
ERC875: transfer assets in batches
ERC875 is an underlying protocol standard that allows users to trade NFTs in batches. Based on this standard, users can purchase and migrate multiple NFTs in batches in one transaction.
At present, the ERC875 protocol family has mainly carried out two core improvements: one is Magic Link to realize atomic transactions, and the other is packaging function.
Among them, Magic Link is mainly used to lower the threshold for users to get started. After assets are tokenized, users can generate Magic Link for display or transaction, and ordinary users can also directly send requests without paying GAS fees at the beginning. The packaging function is mainly aimed at businesses such as ticketing, which can package multiple assets for overall display or circulation and processing.
In the ERC-875 protocol, users can place orders by cryptographically signing information including price, transaction expiration date, and signature. This process is completed off-chain, and will only be broadcast on the chain during settlement, which means that users can conduct transactions without paying Gas fees, saving a lot of Gas fees. And when a buyer is willing to buy, all he needs to do is accept the order and broadcast the situation with the order details, plus buy gold to complete the transaction. Therefore, for ERC875, in addition to reducing the gas fee, it can also be convenient for users.
ERC1523: NFT policy
It is indeed a good idea to use the form of NFT as an insurance policy. We have seen that an insurance policy is a financial asset that is unique in some aspects. The policy allows customers to associate with specific risks, or has other unique attributes, such as Premium, period, carrier, insurer, etc. After the policy is further NFTized, the policy can be circulated as an asset that can be traded and transferred.
ERC1523 is an NFT protocol standard aimed at building applications in this field. It defines a minimal metadata structure based on the existing ERC721 protocol standard, allowing standard APIs for insurance policies to be implemented in smart contracts, with as many Let the insurance policy category have general characteristics. Although there are not many overall application cases of ERC1523 at present, it provides a basis and reference for the further construction of insurance in a broad sense on the chain in the future.
Family buckets with leasing features: ERC4907, EIP2615, EIP5006
ERC721 itself does not support the separation of NFT between the right to use and the right to own, that is, only the owner of the NFT has the right to use. Then the emergence of protocol standards such as ERC4907 (the EIP4907 proposal launched by the NFT rental market Double Protocol, and passed the proposal in June 2021), EIP2615 (proposed by Kohshi Shiba in April 2020), will further enable NFT to combine the right to use with ownership right to separate.
Although both ERC4907 and EIP2615 are extensions of ERC721, there are certain differences between them.
ERC4907 builds an additional role that can be granted to the address, and the time when the role is automatically revoked (expires). A role represents the right to "use" an NFT, but not the ability to transfer or set it. That is to say, the NFT owner can give an address a "lease" feature with the right to use, and automatically form a lease relationship after further establishing the lease time factor, and automatically cancel the lease relationship after the lease time expires (the lease relationship will not be due to transfer of NFT ownership). ERC4907 itself does not have any mandatory means to limit the use of the lessee, that is, the owner of the right to use can perform all interoperable operations without permission except that it cannot be transferred and set. At present, ERC4907 does not set the number of leases, such as the continuous lease of a single address that can be automatically and directly executed, and subsequent developers can further develop on this basis.
The core value of ERC4907 is to provide technical support for the "native leasing" on the chain, and realize the separation of ownership and use rights of NFT. It is an important infrastructure to solve the problem of NFT liquidity shortage. Of course, to support ERC4907, further support is required. Upgrade the smart contracts of GameFi or NFT project parties (low threshold).
EIP2615 is also an extension of ERC721, but it mainly supports leasing and mortgage functions, that is, after NFT is mortgaged, it can continue to be used by users who have the right to use it (allowing users to rent their own NFT, or mortgage NFT to mortgage), to Further endowing NFT assets with certain attributes of real-world real estate assets has a different focus from ERC4907.
Compared with ERC4907, it is more complicated, including three types of roles: lien holder, owner and user. The lien holder and owner have the right to transfer the role of owner and user, while the user has the right to transfer the user role, and the smart contract is the main executor, and we see that its overall execution logic is very complex. After EIP2615 was proposed in 2020, there has been no progress, which may be related to its complex execution logic and on-chain execution cost (high Gas), and it is not consistent with the actual NFT market development and demand.
EIP5006 is more like an extended version of ERC1155. EIP-5006 imitates the data structure of 1155, and adds 3 additional data to represent the nested asset role lease relationship, which is basically equivalent to nesting one more on the original 1155 core data. The upper layer supplements the data of renters and rental volume. Its core value is mainly to further strengthen the separation of ownership and use rights around "user creation application scenarios", clarify the direction of NFT to expand the application value, and more and rich gameplay, application scenarios and derivatives will emerge.
EIP3664: NFT attribute extension protocol
EIP-3664 was proposed by the DRepublic team, which uses a more ingenious way to further solve the mainstream NFT standards such as ERC-721 or ERC-1155, etc., which are not expressive enough in terms of attributes, and it is difficult to integrate between NFTs, and There are various problems in the centralization of storage (currently mainly stored on the server), and this proposal further realizes the dynamic expansion of NFT attributes.
In the EIP-3664 solution, there is no need to modify the existing ERC-721 protocol and ERC-1155 protocol. It supports NFT attach attributes in the callback function of the IERC721Receiver or IERC1155Receiver of the NFT mint method, and can also be used by the override mint method. Define the way to implement as NFT attach attribute, an NFT can attach any number of attributes infinitely.
All attributes in EIP-3664 implement the IERC3664 interface, and the basic attributes contain several basic fields: ID, Name, Symbol, URI, Balance. EIP-3664 is tokenizing the attributes of NFT, that is, we can think that each attribute is also a kind of NFT, which leads to the concept of sub-NFT, that is, NFT nested NFT, NFT nested FT, this feature seems to be Simple, in fact, it provides an infinite number of changing properties for NFT, and makes NFT more widely used.
The update, transfer, and evolution of attributes can be realized by extending the basic EIP-3664 protocol. At present, EIP-3664 has realized six core attribute operations: upgradeable, modifiable, addable, removable, and scalable. Split, can be combined.
In other words, EIP-3664 provides NFT with detachable and composable features, which allow all NFTs to be assembled freely. The initial version released by Genesis is a combination of multiple different parts, similar to Lego suits, each After the parts are split, they can still be sold in the secondary market as a complete NFT asset.
An important feature of the splitting of NFT is to take into account the differentiated personality and integrity after splitting. On this basis, further quantitative fission is a very interesting attempt. The EIP-3664 protocol is crucial to the development of NFT. significance.
NFT protocol standards for membership rights: EIP4885, ERC5643
The EIP4885 protocol standard is a protocol interface for subscribing tokens, allowing holders to subscribe to NFT and multiple tokens. The core function of this protocol is to support the setting of the access period of NFT and better serve the ecosystem such as membership system. For example, the owner of music, movies, books, etc. authorizes access to follow.
EIP5643 is an extension of EIP-721. It proposes an additional interface for NFT, which can also be used as a regular, expirable subscription. This interface includes the functions of renewal and cancellation of subscription.
SBT (soul bound currency) protocol standards: EIP5114, ERC5192, EIP4973
EIP5114
A token that is bound to another non-fungible token (NFT; e.g., EIP-721 token) at the time of minting and cannot be transferred/moved afterwards. Users cannot transfer ownership, nor can minters withdraw/transfer/change ownership.
ERC5192
The Ethereum community expressed a need for non-transferable, non-fungible, and socially priced tokens, similar to World of Warcraft soulbound items. But the lack of a token standard has resulted in many developers simply throwing errors when users call transfer functions. In the long run, this will lead to fragmentation and reduced composability.
This standard is an extension of EIP-721. It proposes a minimal interface to enable token bonding using the feature detection capabilities of EIP-165. Soul-bound tokens are non-fungible tokens bound to a single account.
EIP4973
Propose a standard API for account-bound tokens (ABT) in smart contracts. ABT is a non-fungible token tied to a single account. ABT does not implement a specification interface for transports. This EIP defines the basic functions for creating, allocating, revoking and tracking ABT. Compared with the two standards of ERC5192 and EIP5114, EIP4973 adds the destruction function.
References:
"A Preliminary Study of NFT for Product Managers"
"A&T View: A Glance at Existing NFT Agreements"
"NFT Leasing Proposal EIP-5006 Enters Final Review! Make it possible to change the chain of large-scale overseas games"
"Economic Primitives of the Metaverse 1: Renting and Lending"
"NFT Foundry | NFT Platform is the fastest tool to land and empower traditional industries"