ERCs regulate many things in the crypto space, from token creation to how you pay your transaction fee. ERC-721 and ERC-998 are supposedly both non-fungible token standards – so what makes them different and how do they stack up against each other? Which one is the best? Keep reading and see how ERC-721 compares against ERC-998!
What Are ERC Token Standards?
ERC (Ethereum Request for Comment) are application-level standards for Ethereum blockchain development. Each ERC comes in the form of a document that outlines its use, implementation instructions, and possible use cases. Anyone in the Ethereum community can submit an EIP (Ethereum Improvement Proposal) that may become a fully-fledged ERC if it gains enough support among project teams and other Ethereum users.
If an Ethereum project is a building, ERC token standards are its blueprints. Developers can simply choose an ERC that fulfills their needs, for instance ERC-721 for an NFT project, and implement it in their project so they don’t have to develop an NFT framework entirely from scratch.
Here are some examples of notable ERC smart contracts:
- ERC-20: This is the token standard that governs the creation and transfer of fungible tokens on the Ethereum blockchain network.
- ERC-223: This token standard improves upon existing ERC-20 tokens by implementing measures to prevent accidental token loss on transfers.
- ERC-721: This is a standard used in the creation and trade of non-fungible tokens which includes crypto art and other digital assets.
- ERC-809: This standard allows you to rent non-fungible tokens instead of buying them.
- ERC-865: This token standard makes blockchain transactions simpler by letting token buyers pay gas fees with their purchased tokens instead of ETH.
- ERC-875: This token standard allows multiple NFTs to be traded in one transaction instead of having to trade them one at a time.
- ERC-998: This token standard expands on ERC-721 by allowing multiple NFTs to be stored in one token.
- ERC-1155: This standard allows a user to store fungible, non-fungible, and semi-fungible tokens all in one smart contract.
- ERC-1238: This is a token standard generally used in badges, non-transferable and non-fungible tokens that cannot be removed from its assignee.
What Is The ERC-721 Token Standard?
The ERC-721 token standard was first proposed by Shirley, Evans, Sachs, and Entriken of the CryptoKitties team in 2017. Widely known as one of the first NFT projects, CryptoKitties features randomly generated cats that people can buy and trade. The ERC-721 token standard was meant to ensure that these kittens are unique and hold different values and rarities.
The main functionalities of the ERC-721 token standard are:
- Record the token’s transaction history so you can track its previous owners
- Transfer a single digital asset from you to another user
- Let another entity (usually crypto exchanges or blockchain platforms) to transfer your NFT to someone else
- Check the token balance of a user
Key Characteristics Of The ERC-721 Standard
ERC-721 is one of the most common standards for NFTs thanks to its key characteristics:
- ERC-721 tokens are one of a kind, which means there are no two identical ERC-721 tokens in existence.
- ERC-721 tokens are non-fungible, meaning it cannot be traded or sold in exchange for something bearing equal value.
- ERC-721 tokens record the value of whatever art piece it’s attached to.
ERC-721 Token Standard Use Cases
Thanks to its uniqueness and non-fungible properties, ERC-721 tokens have many different uses in the digital world and the real world. Some common token use cases for ERC-721 are:
- Crypto art and digital collectibles: This is what ERC-721 is most commonly used for. Attaching a non-fungible token to an art piece means that you can exchange ownership rights by buying or selling the NFT.
- Gaming: NFT-based gaming is one of the fastest-growing corners of the crypto space. NFTs can be used to represent unique items that you can use to strengthen your characters or trade with others.
- Event ticketing: NFTs can be attached to sporting or music event tickets so only token holders can enter the event. This helps prevent ticket fraud and scalpers.
What Is The ERC-998 Token Standard?
ERC-998 was first proposed by Jordan Schalm, Matt Lockyer, and Nick Mudge from GigLabs in 2018. They proposed this token type for the NFT game CryptoRome, where players aim to become the Caesar by buying virtual assets like villages to grow their empires.
ERC-998 is a “composable” NFT standard, meaning that one ERC-998 composite token can contain multiple ERC-721 token assets. So a game character saved on an ERC-998 token can equip a sword, a shield, and armor in the form of ERC-721 child tokens.
Key Characteristics Of The ERC-998 Standard
The ERC-998 composite token standard is a good way to apply NFT into gaming because of these key characteristics:
- An ERC-998 smart contract can be composed of multiple ERC-721 non-fungible assets.
- All ERC-721 assets in an ERC-998 token can be sold all at once.
ERC-998 Use Cases
ERC-998 finds its primary use case in gaming because it’s much more convenient to save all the items owned by your virtual character in a single token instead of multiple tokens. If you decide to stop playing the game and sell your account, you also only need to sell the ERC-998 token with all its underlying assets instead of selling each item you own one by one.
What Are The Differences Between ERC-721 vs ERC-998?
ERC-998 is basically a collection of ERC-721 tokens compiled into one asset, so there’s bound to be many similarities between the two standards. However, there are some distinctions between the two ERCs:
- Asset count: The main difference between these two standards is how many assets you can fit in one smart contract. ERC-721 is typically used for single assets, while ERC-998 assets can contain multiple items.
- Ease of trade: Trading multiple assets on ERC-998 is easier because you can simply sell the parent token in a single transaction. Meanwhile, trading multiple ERC-721 tokens means you need to make transactions on a one-by-one basis.
As an extension of the ERC-721 token standard, ERC-998 is a good choice if you’re planning to create NFT-based games with lots of assets.
Looking to create a new NFT project but need technical know-how to do it? Tokenfy has you covered! Check out the rest of our website to see how we can help launch your NFT collection.