Key takeaways
- ERC-721 tokens distinguish themselves from ERC-20 tokens by being non-fungible. This means each token is unique and not interchangeable.
What is a Non-Fungible Token (NFT)?
A Non-Fungible Token (NFT) uniquely identifies items or individuals. It finds applications in platforms offering collectibles, access passes, lottery tickets, reserved seats for events, and more. This specialized token offers diverse possibilities, warranting a dedicated standard like ERC-721.
What is ERC-721?
ERC-721 establishes a standard for NFTs. It ensures uniqueness among tokens within a smart contract. Each token may hold a distinct value based on factors such as age, rarity, or visual characteristics. Notably, all NFTs possess a unique uint256 variable called tokenId. It ensures global uniqueness when paired with the contract address. This allows for the creation of engaging content using a token’s identifier as input. Such engaging content includes images of zombies, weapons, skills, or delightful creatures.
How does ERC-721 work?
ERC-721 operates through a set of functions integrated into smart contracts, enabling developers to generate, exchange, and oversee NFTs. These functions facilitate the creation of distinct tokens, each with its unique metadata, ensuring its differentiation.
Behind the scenes, ERC-721 smart contracts uphold ownership records, enabling token transfers among users. The contract manages the total token supply and individual address token balances.
Advantages of ERC-721 for NFTs:
1. Ownership: ERC-721 facilitates secure ownership, transfer, and management of unique digital assets. Thus ensuring transparent ownership records.
2. Interoperability: NFTs adhering to the standard can seamlessly interact with various platforms and dApps on Ethereum. Thus enhancing their usability.
3. Rarity and uniqueness: Due to their inherent rarity, ERC-721 NFTs are one-of-a-kind items that appeal to collectors and creators.
4. Programmability: Creators can embed additional functionalities like royalties or in-game utilities into ERC-721 NFTs. Thus enhancing their versatility.
5. Digital scarcity: Limited supply and transparent provenance establish digital scarcity, contributing to long-term asset value.
6. Intellectual property rights: ERC-721 NFTs provide artists with immutable records of their work, helping to protect intellectual property and track usage.
7. Fractional Ownership: NFTs based on ERC-721 can be divided into tradable fractions, enabling broader investment opportunities.
8. Cross-platform compatibility: The ERC-721 standard ensures compatibility across various platforms, thus broadening the potential use cases of NFTs.
With these benefits, the ERC-721 standard empowers NFTs. It unlocks diverse applications across art, gaming, and various industries. Let’s explore some of these applications further.
ERC-721 Token Use Cases:
- The ERC-721 token standard finds extensive application in digital art. Art represents one of its prominent uses.
- Publishing art and various media on the blockchain makes these assets exchangeable and transferrable across the underlying blockchain network. NFTs are revolutionizing several industries. It grants individuals ownership and involvement in their digital ecosystem.
This transformation extends to non-fungible gaming assets, metaverse real estate and assets, Web3 community memberships, and various other domains.
Popular NFTs:
1. Etherscan NFT Tracker: The Etherscan NFT Tracker lists the top NFTs on Ethereum by transfer volume. It offers insights into the most active tokens.
2. CryptoKitties: CryptoKitties is a popular game featuring breedable and collectible creatures known as CryptoKitties. It captivates players with their adorable nature.
3. Sorare: Sorare is a global fantasy football game in which players collect limited-edition collectibles, manage teams, and compete for prizes. It innovatively blends sports and collectables.
4. The Ethereum Name Service (ENS): ENS provides a decentralized system for addressing resources both on and off the blockchain using simple, human-readable names. It enhances accessibility and usability.
5. POAP: POAP delivers free NFTs to event attendees or individuals completing specific actions, promoting engagement, and rewarding participation in events.
6. Unstoppable Domains: Unstoppable Domains builds blockchain-based domains. It replaces cryptocurrency addresses with user-friendly names, enabling censorship-resistant websites.
7. Gods Unchained Cards: Gods Unchained Cards is a blockchain-based trading card game. It leverages NFTs to offer real ownership of in-game assets, enhancing player experience and value.
8. Bored Ape Yacht Club: Bored Ape Yacht Club features 10,000 unique NFTs. These serve as rare artwork and membership tokens to a prestigious club, which provides exclusive perks and benefits to members.