The non-fungible token (NFT) Space has emerged recently as an essential part of the blockchain conversation, changing how ownership is perceived, transferred, and traded.

Within the NFT space on the Ethereum blockchain, two standards have emerged as the top contenders for creating and managing NFT projects. These are the ERC-721 and ERC-1155 standards.

What is ERC-721?

The ERC-721 standard is an NFT standard that defines a minimum set of interfaces consisting of methods, events, and basic functionalities that a smart contract must implement to allow NFTs to be owned, utilized, transferred, and approved by different parties.

This includes the address owner function that gives basic information on the number of NFTs owned by a given address. The SafeTransfer function allows the transfer of ownership of an NFT from one address to another. The Approve feature allows a third party to transfer or get approval for transferring a specific digital asset or utility on behalf of the owner or holding address.

It is ideal for projects where each token represents a unique, distinct asset, such as a rare digital collectible or a unique digital asset.

History of ERC-721

Known as the pioneer standard for NFT projects, the ERC-721 was the first Ethereum Request for Comment (ERC) to provide the blueprint for unique digital assets on Ethereum’s Blockchain.

ERC-721 was proposed by William Entriken, Dieter Shirley, Jacob Evans, and Nastassia Sachs in January 2018 as an Ethereum Improvement Proposal (EIP). the idea was focused on creating completely unique assets grouped into a collectible project, as opposed to fungible tokens similar to other tokens of the same project.

The standard allowed developers to create interoperable and composable NFTs that could be easily tracked and transferred on the blockchain. This was achieved through the above-stated interfaces, with some optional extensions that add more functionality to the standard, such as metadata, enumeration, and burnable.

After undergoing a rigorous review process within the Ethereum community, Erc-721 was officially accepted as an EIP in June 2018. The ERC was initially brought to life in the CryptoKitties project by Axiom Zen. Since then, it has left beta and is a widely used standard for NFT projects on Ethereum.

ERC-721Key features: Uniqueness, Indivisibility and Ownership

Uniqueness

One key feature of ERC-721 assets is uniqueness, which allows each asset to be distinct from the others using a unique identifier (token-Id) stored on the blockchain. The token-Id is a set of numbers that is assigned to the asset at the period of creation.

The token-Id, similar to a fingerprint, cannot be changed, and it serves as the primary identifier of the NFTs, thus guaranteeing their distinctness.

Indivisibility

Unlike other ERC standards that produce tokens that can be divided into smaller units, another key feature of ERC-721 assets is their indivisibility. This ensures that the owner possesses the entire asset and its associated rights.

Ownership

The initial concept for the ERC-721 standard is to revolutionize how ownership is perceived. This is done with the aid of programable smart contracts.

With the aid of smart contracts, projects can facilitate the transfer of asset ownership in a secure, decentralized way, with the owner’s full consent. This reduces any errors, disputes, or third parties during transactions.

The standard also allows owners to get specific permissions or utilities from the digital asset, allowing users in the NFT space to build projects that grant specific rights.

Famous ERC-721 Projects

CryptoKitties

Image Source: CryptoKitties Website

CryptoKitties was launched in late 2018, using the beta version of ERC-721. The game allowed users to breed, collect, and trade digital cats, which made it a viral sensation, bringing NFTs to the limelight.

Decentraland

Image Source: Decentraland Website

The Decentraland platform was initially released in 2020, with the ERc-721 LAND token associated with Land parcels and their locations within the 3D metaverse.

It used a modified version of ERC-721 and became one of the first major metaverse projects, unlocking another use case for NFTs.

BAYC

Source: BAYC’s Website

The Bored Ape Yacht Club, commonly known as BAYC, is a collection of 10,000 NFTs with unique attributes and traits built on Ethereum’s blockchain. BAYC NFTs are of the ERC-721 standard.

BAYC is one of the most unique NFT projects that has spawned several projects like the Dookey Dash game. The BAYC team enables holders of the ERC-721 token to unlock various offerings in the ecosystem. BAYC holders have commercial usage rights for their ERC-721 tokens, and the project promises to unlock more opportunities for utility as its roadmap expands.

What is ERC-1155?

The ERC-1155 standard is capable of handling both fungible and non-fungible digital assets. Similar to the ERC-721 standard, it defines a minimum set of interfaces for owning and transferring NFTs and utilizes the address and approval features.

The motivation behind the ERC-1155 is to resolve limitations inherent within the ERC-721 and ERC-20 standards. It can manage multiple token types and tokens within one function call. This allows the developer to reduce the cost and complexities of deploying and interacting with different tokens.

It also considers semi-fungible tokens, which have fungible and non-fungible properties, such as game items that can be stacked or customized.

History of ERC-1155

The ERC-1155 standard was first created by the Enjin project team in 2019. The standard emerged as developers attempted to expand on the limitations of the initial ERC-721 standard.

Along with popularizing the ERC-1155 standard, batch operations and hooks became popular in the NFT space.

The standard was officially accepted within the Ethereum community in June 2019, and since then, it has been widely accepted by projects that utilize NFT technology.

ERC-1155 Key features: Batch Operation, Hooks and ownership

Batch Operation

atch transfer, batch balance, and batch approval. The batch operations feature of ERC-1155 allows for the minting or transferring multiple tokens of different types in a single smart contract call by utilizing IDs and arrays. This feature allows developers to save costs while being efficient.

The feature is used mainly by applications that conduct large volumes of transactions, and it consists of batch transfer, batch approval, and batch balance functionalities.

Hooks

The hook feature is an extension within each ErRC-1155 smart contract that allows developers to execute custom codes when an action is triggered or a specific condition is met. This adds additional functionalities and flexibility to the application of ERC-1155 tokens.

The hook feature is popularly applied in royalty events, gamified incentives, dynamic pricing mechanisms, and restricting gated access. The ability to customize the hook use case has made it a popular tool among NFT developers.

Ownership

Like the ERC-721, the ERC-1155 standard is created with ownership in mind. With smart contracts, digital assets designed with the ERC-1155 standard allow the transacting of tokens with the owner’s consent or holding address.

Also, the standard allows owners to access gated or exclusive content or utilities from the digital asset, allowing developers to build projects requiring specific tokens or NFTs.

Famous ERC-1155 Projects

Enjin

Image Source: Enjin Website

The Enjin project is a platform that allows users to create and m manage digital assets. Its team created the ERC-1155 standard which it uses to create both fungible and non-fungible tokens, which can be used for multiple purposes, such as gaming, collectibles, and loyalty programs.

Dissolution

Image Source: Steam

Dissolution, a first-person shooter with role-playing elements, is being developed by Garage Studios. The game is set in the year 2418, and it features digital assets such as guns, ships, and armor that can be integrated into other games.

The Sci-fi game switched from ERC-721 to ERC-115 tokens, supporting the Enjin standard.

Rarible

Image Source: Rarible Website

Rarible is a marketplace for buying, selling, and trading ERC-1155 tokens, similar to OpenSea. but it has some features unique to NFT transacting, such as a built-in minting tool and support for fractional ownership of NFT assets.

Similarities between ERC-721 and ERC-1155

Multiple similarities exist between the ERC-721 and ERC-1155 standards.

Ownership

The first is their focus on ownership on the Ethereum blockchain. Both standards are designed to leverage the decentralized yet secure design of Ethereum’s infrastructure.

The standards also allow for the transfer, minting, and burning of tokens within the blockchain.

Smart Contract

Both standards carry out their functions with the aid of smart contracts that define the creation, transfer, and management of tokens. They also ensure a transparent and secure execution of designed functions and codes to reduce or eliminate human errors.

Metadata

The two standards support the attachment of additional information, such as metadata, to digital assets. This metadata often includes details about the utilities and functions attached to digital assets.

Differences between ERC-721 and ERC-1155

Token Structure

The ERC-721 standard only supports the creation of non-fungible assets, while the ERC-115 standard supports the creation of fungible and non-fungible tokens within a single contract.

Functionalities

The complexities surrounding building projects with the ERC-721 standard require multiple smart contracts to execute transactions. In contrast, the ERC-115 standard allows combining multiple tokens and token types, leading to more versatility with less complexity.

Efficiency

The ERC-721 standard requires multiple transfers, leading to more gas fees, while the ERC-115 standard can batch transfer tokens, leading to fewer transactions and gas fees.

Conclusion

The choice between building with ERC-721 or ERC-1155 depends on the project’s specific needs. While ERC-721 is the pioneer for unique and indivisible assets, ERC-1155 is designed as an improvement, allowing the extension of possibilities by introducing a multi-token standard for fungible and non-fungible tokens.