The sudden explosion in the growth of applications based on Ethereum is not a surprise for many. As the popularity of DeFi products and NFTs continues to increase, Ethereum is the go-to destination for anyone interested in these domains. However, you might wonder about the need for an ERC 1155 tutorial and the reasons for a new standard. ERC standards are essential standards for Ethereum development with a focus on token interfaces.
The standards help in ensuring ease of composing smart contracts, and when a new project issues tokens, they can remain compatible with decentralized exchanges. Each token standard type has different functionalities, and most of the talk around NFTs often lands on ERC-721 standards. How is the ERC 1155 standard relevant now? Does it serve any special use case?
The early stages of the ERC standards with the ERC-20 token standard focused primarily on the functioning of a traditional token. However, the arrival of NFTs led to the introduction of ERC-721 standard for creating non-fungible tokens. Now, the ERC 1155 token standard is gradually assuming priority with its revised set of properties. The following discussion offers a detailed overview of the new ERC-1155 crypto token standard with a reflection on how it differs from the ERC-721 standard.
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Why Should You Worry About a New Token Standard?
Before you start discussing the choice of an ERC 1155 wallet, you should know why Ethereum needs a new token standard. In the initial stages, the Ethereum ecosystem did not require any new token standards. Most users focused largely on the smart contract functionality of Ethereum. Anyone could create a new blockchain network with a related ERC-20 token, and many new projects capitalized on the initial developments.
However, developers started recognizing the potential of Ethereum smart contracts for other use cases. Non-fungible tokens emerged as one of the prominent use cases of smart contracts on Ethereum with a broad range of applications. The ERC-721 token standard served as the staple highlight in the NFT ecosystem for creating a unique class of digital assets.
The ERC-721 Token Standard
A discussion on “what is ERC 1155” is incomplete without referring to its predecessor. The ERC-721 token standard actually started the foundation for building NFTs. As a matter of fact, ERC-721 standard is the most popular standard for creating NFTs and gained attention with the CryptoKitties project. The developers behind CryptoKitties introduced ERC-721 through an Ethereum Improvement Proposal or EIP.
ERC-721 standards ensured that the tokens created in the projects are completely unique from one another. In addition, the ERC-721 standard delivered additional functionalities such as flexibility of transferring NFTs between accounts. On top of it, the token standard also allowed identification of the total supply for a collection of NFTs. However, the problems with ERC-721 provided the basis for creating ERC-1155.
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Problems with ERC-721
The primary uses of NFTs in the gaming sector called for creation of token standards tailored for real games and the associated item economies. However, ERC-721 and ERC-20 cannot support the inclusion of fungible as well as non-fungible assets in one economy. Therefore, the ERC 1155 token standard offered an ideal solution for creating a game with thousands of multiple assets in varying supplies along with different parameters for every asset type. You can think of the ERC-1155 standard for transferring NFTs and fungible tokens together. The standard offered advanced functionalities for usability alongside batch transfers.
What is the ERC 1155 Standard?
The ERC 1155 is an Ethereum token standard focused on incorporating the best traits from earlier standards for creating fungibility-independent and gas-efficient token contracts. The ERC 1155 standard has been created by the developers behind Enjin, a blockchain-based platform for games. Enjin discovered many dominant challenges pertaining to the ERC-721 standard, especially in the restrictions on batch transfers. How did ERC 1155 become so popular? For starters, you can look at the multi-token standard as a promising tool for transforming the world of NFTs.
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Features of ERC 1155
Another important highlight in any ERC 1155 tutorial would focus on the features of the token standard. The features of ERC 1155 can tell a lot about how it works and its significance in the NFT landscape. Here are some of the notable features and their implications for the Ethereum ecosystem.
The foremost problem with the ERC-721 standard is reflected in the challenges in transferring multiple NFTs. Every NFT would need a single dedicated transaction as they are represented with individual smart contracts. As a result, the ERC-721 standard generally ended up imposing unbelievably high transaction costs while facilitating opportunities for minting or trading single NFTs.
With an ERC 1155 wallet, you can discover the features for batch transfers of multiple assets over a single, smart contract. Transferring all the tokens at once can lead to reduced congestion in the network while reducing the costs of transactions. For example, users can sell multiple items with a game to other users by using the batch token transfer facility with ERC 1155.
One of the significant highlights in answers to “what is ERC 1155” focuses on its identity as a multi-token standard. The ERC-1155 standard supports fungible as well as non-fungible tokens, with the ability to support multiple states. Interestingly, the support for multiple states is available on the same contract and address. Therefore, you can easily use ERC 1155 functionalities for in-game payments with fungible tokens on a specific address alongside transferring unique NFT assets.
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Another notable feature of the ERC 1155 standard draws attention to the possibilities for creating semi-fungible tokens. Semi-fungible tokens or SFTs work as fungible tokens during the trading process. However, they transform into NFTs upon redeeming. For example, a ticket could be a fungible asset before the event. However, the ticket becomes memorabilia after the concert and loses any tradable value. SFTs offer the functionality for coding such functionalities directly in the code of the ticket.
Reversing Token Transfers
The next highlight in the features of ERC 1155 token standard sets it apart from its predecessors in unique ways. ERC 1155 provides a highly relevant and functional opportunity for reverting token transfers in event of any mistakes. The same thing does not work with the ERC-721 token standard, and you cannot recover assets sent to wrong addresses. ERC 1155 offers a function known as the safe transfer function for addressing such problems. Apart from the safe transfer function, ERC 1155 also presents many other rules for preventing exploitation of users.
Support for EIP-65
The discussions in an ERC 1155 tutorial also draw attention to support for EIP-65. You can think of such a feature as a favorable highlight for smart contracts to choose the interfaces they can support. With the support for EIP-65, ERC 1155 also provides support for receiving hooks in the case of smart contracts. As a result, users don’t have to worry about their tokens being stuck in a contract.
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How Is ERC 1155 Better?
The arrival of ERC 1155 offers many improvements tailored for the future of NFTs and other applications in the Ethereum ecosystem. Many criticisms of ERC 1155 token standard have also been making the rounds of crypto news recently. However, ERC 1155 is better than the existing ERC-721 token standard in many ways. Here are some of the notable ways in which ERC 1155 offers plausible advantages for the NFT ecosystem.
- ERC 1155 helps you create non-fungible tokens as well as semi-fungible tokens.
- The ERC 1155 token list includes multiple names as the ERC 1155-based smart contracts offer desired compatibility. On the contrary, you have to create new smart contracts for each type of token with ERC-721.
- Another important beneficial highlight of ERC 1155 refers to the linking of smart contracts to multiple identifiers. The smart contracts don’t store additional metadata, thereby offering flexibility for deployment. In the case of ERC-721, you can find static metadata only stored on the smart contract for increasing deployment costs.
- Most important of all, the support for batch transfers works as a great highlight for ERC 1155 standard in using NFTs. The standard allows transferring multiple types of non-fungible tokens as well as fungible tokens in single batches. As a result, ERC 1155 can facilitate a plausible reduction in transaction costs and time required. Therefore, you can clearly notice how ERC 1155 serves as good news for the future of NFTs.
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Non-fungible tokens have evolved as a significant highlight in the generation of digital assets today. However, developers continue to struggle with making NFTs more usable. The ERC 1155 tutorial showed how a new token standard could accentuate the usability of non-fungible tokens. The new token standard can help in driving batch transfers and creation of semi-fungible tokens.
At the same time, ERC 1155 also serves as a foundation for new improvements in streamlining the Ethereum ecosystem with improved efficiency and value. With substantial advantages over the ERC-721 standard, ERC 1155 is nothing short of revolutionary intervention. You can start learning more about token standards and how to use them in the world of NFTs.
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