ERC-721 token, what is it? Discover its features and usefulness with practical examples.
ERC-721 is a standard for non-fungible tokens (NFTs) on the Ethereum blockchain. The term ERC stands for Ethereum Request for Comments, and it refers to a set of technical standards used to create and implement tokens on the Ethereum network.
Unlike fungible tokens, such as cryptocurrencies like Ether (ETH) or ERC-20 tokens, which are interchangeable and have the same value, ERC-721 tokens are unique and indivisible. Each ERC-721 token represents a distinct asset or item and has a specific value or characteristic associated with it.
The ERC-721 standard provides a blueprint for developers to create and manage these unique tokens. It defines a set of functions and events that allow users to own, transfer, and interact with individual ERC-721 tokens. The standard also establishes a common interface for interoperability between different applications and wallets that support ERC-721 tokens.
One of the main use cases for these tokens concerns collectibles and digital artworks. Artists and creators can transform their works into ERC-721 tokens, enabling collectors to buy, sell and trade these unique digital assets on various marketplaces. The ownership and provenance of each token are registered on the Ethereum blockchain, guaranteeing transparency and authenticity.
It’s worth noting that ERC-721 is just one of several token standards on Ethereum, and each standard serves different purposes. ERC-20 tokens, for example, are used for fungible tokens, while ERC-1155 tokens can represent both fungible and non-fungible assets.
ERC-721, concrete examples :
- CryptoKitties: CryptoKitties is one of the most famous examples using this token. It’s a blockchain-based game in which players can collect, breed and trade unique digital cats. Each CryptoKitty is represented by this token, with its own attributes, characteristics and values.
- Decentraland: Decentraland is a virtual reality platform built on Ethereum, and its virtual world is divided into parcels of land called LAND. Each LAND parcel is represented as an ERC-721 token, allowing users to buy, sell, and develop virtual real estate within the Decentraland metaverse.
- NBA Top Shot: NBA Top Shot is a platform that offers officially licensed NBA collectibles in the form of moments. These moments are unique highlight videos of NBA players, and each moment is tokenized as an ERC-721 token. Collectors can own and trade these moments, creating a marketplace for digital basketball collectibles.
- Art Blocks: Art Blocks is a platform where artists can create generative art projects. Each art piece is tokenized as an ERC-721 token, representing a unique digital artwork. Collectors can purchase and own these digital art pieces, which often feature algorithmically generated visuals and designs.
- Axie Infinity: Axie Infinity is a blockchain-based game where players can collect, breed, and battle cute creatures called Axies. Each Axie is represented as an ERC-721 token, with unique attributes and abilities. Players can trade Axies and use them in the game to earn rewards.
As you can see, it’s often used. It can be found in numerous use cases, such as in the context of tokenization.
These are just a few examples, but there are many other projects and applications using ERC-721 tokens for a variety of purposes, including virtual goods, digital collectibles, in-game assets, virtual real estate and more.
If you want to know the meaning of the different terms used in the DeFi and the world of cryptocurrencies, then I invite you to find the lexicon dedicated to them.