If you’re familiar with NFTs, then you may have heard of ERC standards like ERC-721, ERC-1155, and ERC-998. These numbers refer to Ethereum token standards – but what do they mean? Read on to find out more about ERCs and how they stack up against each other!
What Are ERC Token Standards?
ERC is short for “Ethereum Request for Comments”. An ERC consists of token standards, package formats, name registries, and other elements that can be used as a standard or blueprint for token development. Anybody in the Ethereum community can create an ERC proposal, but they need considerable support from the community to make it a full-fledged ERC.
At its core, ERCs define how certain things work on the Ethereum blockchain network. Take the ERC-20 standard, for example. This standard allows you to transfer tokens between users on the Ethereum blockchain – which means it’s an integral standard adopted by almost all crypto exchanges.
Here are some examples of the best-known ERC token standards:
- ERC-20: A ubiquitous token standard that allows a user to transfer their Ethereum blockchain-based tokens to another user.
- ERC-223: A standard that expands on ERC-20 to prevent token loss.
- ERC-721: A token standard widely used in the creation or transferral of non-fungible tokens.
- ERC-865: This token standard allows users to pay transaction fees by directly deducting their purchased token balance instead of having to make a separate payment in ETH.
- ERC-1155: An improvement on ERC-721 that allows a single smart contract to contain multiple non-fungible and fungible tokens.
- ERC-1238: A standard that manages badges – non-transferable and non-fungible tokens that are usually used to denote a user’s reputation or experience in games or organizations.
What Is The ERC-721 Token Standard?
The ERC-721 token standard is likely familiar if you’ve been dabbling in NFTs. This token standard was proposed by Dieter Shirley, William Entriken, Jacob Evans, and Nastassia Sachs to define tokens that are one of a kind – which is why they’re called non-fungible tokens.
This standard’s key functionalities include:
- Record a token owner’s address on the blockchain.
- Transfer an NFT from one user to another.
- Allow third parties like NFT exchanges to transfer NFTs between users.
- Log every non-fungible token owned by a user.
Key Characteristics Of ERC-721
The ERC-721 token standard features two key attributes that make it the gold standard for NFT minting, which are:
- ERC-721 tokens are one of a kind, which means you can’t exchange them with another token of equal value.
- Every ERC-721 token contains the value of the art piece.
ERC-721 Token Standard Use Cases
Most use cases for the ERC-721 token standard make use of its non-fungible properties. Some examples include:
- NFT art: An ERC-721 standard token is mainly used for non-fungible tokens. When you trade NFTs, you don’t just trade the piece of art but also the ERC-721 token which acts as an ownership certificate.
- Physical assets: NFTs can also represent real-world objects like physical art or real estate. Instead of drawing up complicated paperwork, you can just transfer the NFT that represents the object in question.
- Ticket scalper and fraud prevention: Attaching an NFT to an event ticket means only the NFT holder can attend the event. This helps discourage scalpers and fake ticket sellers.
What Is The ERC-1155 Token Standard?
The ERC-1155 smart contract standard was first proposed in 2018 by Witek Radomski, Andrew Cooke, Philippe Castonguay, James Therien, Eric Binet, and Ronan Sandford. They came up with this proposal because they saw that the existing ERC-721 and ERC-20 standards were inflexible.
ERC-1155 provides additional flexibility by being able to hold multiple digital assets of varying types within a single contract. This means you can place non-fungible, fungible, and semi-fungible tokens in one place, then trade them as a collection instead of doing so one by one.
Key Characteristics Of ERC-1155
ERC-1155 features the following characteristics:
- ERC-1155 can contain fungible, semi-fungible, and non-fungible tokens within one smart contract.
- ERC-1155 functions similarly to ERC-20 and ERC-721.
- ERC-1155 can hold an infinite number of tokens.
ERC-1155 Token Standard Use Cases
ERC-1155 offers more flexibility than its peers thanks to its ability to manage multiple token types. Some common use cases for ERC-1155 include:
- Blockchain gaming: ERC-1155’s ability to hold multiple token types sees common use in the NFT-based gaming industry. One ERC-1155 smart contract can represent your account by saving unique items as NFTs and your health as fungible tokens.
- Digital artwork packages: ERC-1155 standard tokens are also used when selling digital content packages containing different items. For instance, you can sell a package containing an NFT, semi-fungible reproductions, and fungible non-exclusive art.
What Are The Major Differences Between ERC-721 Vs ERC-1155?
So what makes ERC-721 and ERC-1155 different? While both standards are used to handle NFTs, there are some key differences between them. Some prominent differences include:
ERC-721 tokens notoriously take a long time to transfer and charge relatively high gas fees, especially on batch token transfers. ERC-1155 tokens charge lower gas fees because you’re transferring multiple tokens in one smart contract instead of multiple smart contracts each containing one token.
ERC-1155’s ability to contain multiple tokens within one smart contract also comes in handy when you’re planning to make a lot of NFT pieces to sell in bulk. With a 100-piece collection, you need to make 100 ERC-721 smart contracts that you have to sell individually. Conversely, using ERC-1155 with the same collection means you just need to create one smart contract to contain all of them.
ERC-1155 and ERC-721 are both commonly used to handle NFTs. However, each smart contract standard has its own fundamental strengths that you need to consider before creating an NFT project.
If you’re planning to create an NFT art collection, Tokenfy has you covered. Visit our website to see how our NFT launchpad services can kickstart your brand-new project!