ERC-721

What is ERC-721?

ERC-721 is a token standard on the Ethereum blockchain for non-fungible tokens (NFTs). Unlike ERC-20 tokens, which are fungible, each ERC-721 token is unique and can have distinct properties. This standard has become the foundation for most NFTs, enabling the representation of ownership for digital or physical assets on the Ethereum blockchain.

Key Features

1. Non-Fungibility: Each token is unique and not interchangeable.

2. Metadata: Supports inclusion of metadata for each token.

3. Ownership: Clear definition of ownership and transfer rights.

4. Interoperability: Can be traded on various NFT marketplaces.

5. Smart Contract Integration: Allows for complex logic in token creation and management.

Core Functions

1. balanceOf(): Returns the number of NFTs owned by an address.

2. ownerOf(): Returns the owner of a specific token.

3. transferFrom(): Transfers ownership of a token.

4. approve(): Grants permission to transfer a specific token.

5. setApprovalForAll(): Grants permission to transfer all tokens of an owner.

6. getApproved(): Gets the approved address for a token.

7. isApprovedForAll(): Checks if an operator is approved for all tokens of an owner.

Use Cases

1. Digital Art: Representing ownership of unique digital artworks.

2. Collectibles: Creating and managing digital collectibles.

3. Gaming: In-game items and characters as NFTs.

4. Real Estate: Tokenizing property ownership.

5. Identity: Representing unique identities or credentials.

Advantages

1. Uniqueness: Allows for representation of distinct assets.

2. Provenance: Easily traceable ownership history.

3. Programmability: Can include complex logic and royalty structures.

4. Liquidity: Enables trading of previously illiquid assets.

Challenges

1. Gas Costs: Minting and transferring NFTs can be expensive during high network congestion.

2. Storage: Efficient storage of metadata can be challenging.

3. Interoperability: While the standard is uniform, implementation can vary.

4. Environmental Concerns: High energy consumption of Ethereum (pre-Ethereum 2.0).

Similar Terms

• ERC-20: The original Ethereum token standard that ERC-223 aims to improve.

• ERC-777: Another proposed improvement to ERC-20 with some similar goals.

• Ethereum: The blockchain platform that EIPs are designed for.

• Smart Contract: The underlying technology that enables token standards like ERC-223.