If you’re familiar with the crypto world, you’ve no doubt heard of the term ERC. You may also have heard of various ERCs like ERC-1155, ERC-20, ERC-998, and many more. But what does ERC stand for and what do different ERCs do? Read on to find out!
What Are ERC Smart Contracts?
ERC stands for “Ethereum request for comment”. A request for comment helps convey technical notes and requirements to users. An ERC can contain token standards, package formats, name registries, and other essential things needed for development. Anyone in the Ethereum community can propose an ERC, but not all of them become community-wide standards.
One of the best-known ERC smart contracts is the ERC-20 standard. This is a standard used to transfer tokens on the Ethereum blockchain network between users. Just about all cryptocurrency exchanges support this standard because it’s an integral part of the crypto economy. Another essential ERC smart contract standard is ERC-721, which governs the use of non-fungible tokens. If you’re minting a single NFT piece, you’re likely doing so with the ERC-721 standard.
ERC smart contract standards contain a common list of rules that crypto and NFT projects need to follow, creating an industry-wide standard. Since the most commonly-adopted ERC standards have the same basic “blueprint”, it makes developing new tokens and NFTs on the Ethereum blockchain much easier. Instead of having to figure things out from scratch every time, they can just build on the existing standards.
There are many ERC standards that have been proposed and put into use by the Ethereum community,but here are some of the most prominent standards:
- ERC-20: The primary smart contract standard used widely on the Ethereum blockchain. It governs fungible token transfers as well as allows users to balance checks.
- ERC-223: An expansion of ERC-20 that fixes a fatal bug. It prevents accidental token loss by making sure that tokens are sent to the right address.
- ERC-721: This smart contract standard governs the use of non-fungible tokens and digital assets – otherwise known as NFTs.
- ERC-865: An ERC standard that allows token holders to pay a token fee for every transaction instead of having to pay a gas fee in ETH.
- ERC-875: A smart contract standard that lets you transfer NFTs in bulk. In addition to providing faster transactions, it also nets you lower gas fees.
- ERC-1155: An alternative NFT standard that lets you place NFTs, fungible tokens, and semi-fungible digital assets within a single smart contract.
- ERC-1238: A smart contract standard governing the use of badges, which are non-fungible and non-transferable tokens. Once a badge is assigned, the badge cannot be removed from the user in question.
What Is The ERC-1155 Token Standard?
ERC-1155 was first proposed in 2018 by Witek Radomski, Andrew Cooke, Philippe Castonguay, James Therien, Eric Binet, and Ronan Sandford. These authors are all part of the team at Enjin, a blockchain developing company. This token was proposed as a more flexible alternative to ERC-721 and ERC-20.
ERC-1155 is meant to become a bridge between ERC-20 and ERC-721, because it can contain fungible, non-fungible, and semi-fungible tokens in one smart contract. The Enjin team compares the ERC-1155 standard to a vending machine, because they’re both big containers that can contain many different types of items simultaneously.
ERC-1155 offers the following basic functions:
- Transfer multiple digital assets in a single transaction.
- Check the balance of all contained digital assets at the same time.
- Approve multiple token transactions to a single address.
- Determine whether or not a token is an NFT by looking at its supply.
- Enforce a set of rules for safe token transfers.
The Characteristics Of The ERC-1155 Standard
The following characteristics define the ERC-1155 smart contract standard:
- The ERC-1155 token standard can represent fungible, semi-fungible, and non-fungible assets at the same time. This means ERC-1155 takes on the functions of ERC-20 and ERC-721 within one smart contract.
- ERC-1155 supports an unlimited amount of tokens in a single smart contract, in contrast to the ERC-721 token standard that’s limited to one token for every smart contract.
- ERC-1155 offers users the capability to perform batch transfers.
ERC-1155 Use Cases
As its developers at Enjin wanted, ERC-1155 offers much more flexibility compared to ERC-20 and ERC-721 due to its ability to manage multiple token types at the same time. Several uses of the ERC-1155 protocol include:
- NFT-based gaming: One of its ERC-1155’s primary use cases is online gaming. ERC-1155 can be used to contain different elements of the game – for instance, a player’s hit points and ammunition can be stored as fungible assets, while their weapons and unique items are stored as non-fungible tokens.
- Digital content packages: The ERC-1155 protocol can also be used if you don’t just want to sell an NFT. With ERC-1155, you can sell a content package that contains a unique NFT, a set of numbered reproductions, and non-exclusive pieces that can be reproduced infinitely.
What Is The ERC-998 Token Standard?
The ERC-998 token standard was proposed by Matt Lockyer, Nick Mudge, and Jordan Schalm in July 2018. This standard is meant to be an extension of the ERC-20, ERC-223, and ERC-721 standards so its token can hold other tokens – but what does that mean?
Simply put, the ERC-998 token standard allows a token to manage other tokens inside itself. The ERC-998 standard allows four token configurations:
- ERC-721 tokens that can own other ERC-721 tokens
- ERC-721 tokens that can own ERC-20 tokens
- ERC-721 tokens that can be owned by other ERC-721 tokens
- ERC-20 tokens that can be owned by ERC-721 tokens
The Characteristics Of The ERC-998 Standard
You can find the following characteristics in the ERC-998 token standard:
- The ERC-998 token standard can collect fungible assets, non-fungible assets, or a merger of both fungible and non-fungible assets within one token.
- All assets contained in an ERC-998 token can be traded simultaneously.
ERC-998 Use Cases
Some potential use cases of the ERC-998 token standard include:
- Virtual avatars and digital portfolios: An ERC-998 token can also become your representative in the metaverse. For instance, you can create an ERC-998 token as your avatar, which will then contain other ERC-721 and ERC-20 tokens that you’ve gathered. Instead of holding the tokens individually, your entire digital asset portfolio falls under your ERC-998 token’s ownership.
- Gaming: Another proven use case for ERC-998 is for blockchain-based gaming. Instead of having to save each and every NFT item on your character individually, you can just sell the ERC-998 token and mass-sell your entire inventory.
What Are The Major Differences Between ERC-1155 vs ERC-998?
While they may seem similar at first glance, there are some fundamental differences about the ERC-1155 and ERC-998 standards. Here are some of them:
Despite its similarities, there’s a slight difference in how the two tokens handle their contents. ERC-998 tokens merge multiple ERC-721 and ERC-20 tokens into one ERC-998 token. Meanwhile, ERC-1155 registers fungible, non-fungible, and semi-fungible tokens into one smart contract.
The two standards have different primary uses. Enjin created the ERC-1155 primarily for gaming use, so players can store their fungible and non-fungible in-game items easily. Meanwhile, ERC-998 is created primarily for digital portfolio management to keep your tokens in one place.
However, keep in mind that both token standards can be used for both gaming and portfolio management.
Despite the similarities, some fundamental differences like primary usage and storage method sets ERC-1155 and ERC-998 apart. Whichever one you choose to use, make sure it fulfills your needs.
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