NFT Standards: ERC 1155 vs. ERC 721

If you plan to not only buy tokens but also create your own, it's worth understanding the standards. Most decentralized applications are built on Ethereum. This platform offers a wide range of features and several standards. What are standards for?

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Let's say you want to create NFTs for a game and sell them onOpenSeaTo ensure your token fits the game's parameters, is compatible with other items, and is compatible with the game it's being created for, common standards are needed.

An ERC, or Ethereum Request for Comments, is essentially a technical document that provides specifications of methods, innovations, research, and features for users of the Ethereum ecosystem. Three of the most popular standards are currently in use: ERC-20, ERC-721, and ERC-1155.

ERC20

In 2015, Vitalik Buterin proposed adhering to a specific standard or set of rules when creating new smart contracts on the Ethereum blockchain. Since Ethereum is an open-source project, anyone can submit proposals, and if the community finds them significant, they are accepted as official. Vitalik's proposed standard was adopted and named ERC20.

The addition of a set of rules greatly simplified the process of creating new cryptocurrencies. Another advantage was that different ERC-20 tokens could be stored on a single address on the Ethereum network, and issuing a new asset eliminated the need to launch a separate blockchain. However, ERC-20 is designed for fungible tokens. With the development of Ethereum and the growing popularity of NFTs, development teams had to develop new standards suitable for non-fungible tokens.

Non-fungible tokens are widely used in the tech world, from social media to cryptocurrency research. The ERC-721 standard offers a suitable framework for creating a customized, non-fungible token. It can be used to create a unique collectible trading card or a completely unique personal avatar.

Why then was the ERC 1155 standard developed?

The point is that ERC-721 focuses specifically on non-fungible tokens.

The ERC-1155 standard allows for the mixed use of fungible, semi-fungible, and non-fungible tokens. Let's take a closer look.

ERC-721

The ERC-721 token standard essentially launched the NFT phenomenon. This standard was the first of its kind. Although non-fungible tokens had existed for a long time, the ERC-721 standard itself opened the floodgates for the mass popularity of NFTs. ERC-721 played a crucial role in introducing unique NFTs to the public through CryptoKitties.

CryptoKitties developer Dapper Labs proposed an ERC-721 improvement proposal (EIP) in 2017. CryptoKitties are a collection of unique, randomly generated kittens—digital collectible characters. It's worth noting that CryptoKitties are completely unique and cannot be duplicated. Furthermore, a transaction history provides a clear record of a kitten's ownership since its creation.

It is important to note that ERC-721 tokens are not only completely unique, but also have the following additional characteristics:

• flexibility of transferring NFTs between accounts, along with the ability to exchange NFTs for other currencies;
• simple capabilities to identify the owners of a particular asset;
• efficiently determine the total supply for any set of NFTs in the network.

ERC-721 has effectively become the primary driver of NFT popularity. Many tokens based on this standard dominate the cryptocurrency landscape, including artwork, avatars, PFP projects (avatar groups), and fractional ownership of virtual land plots.

ERC-1155

The origins of ERC-1155 go back to the Enjin project, which introduced the token standard in 2019. The ERC 1155 standard incorporates the best of both the ERC-20 and ERC-721 standards:

• Transferring multiple NFTs using the ERC-721 standard requires separate transactions for each NFT, significantly increasing transaction costs. ERC-1155 allows for batch transfers—multiple assets can be covered by a single smart contract, thereby enabling their transfer with limited network load and lower transaction costs.
• Another important feature of ERC-1155 is its support for both non-fungible and fungible tokens. ERC-1155 allows for multiple states to be maintained on a single contract and address.
• ERC-1155 also wins the competition against ERC-721 because it allows for the creation of semi-fungible tokens. Semi-fungible tokens serve as fungible tokens during trading, and upon redemption, they become NFTs.
• Another notable aspect of the ERC-1155 token standard is the ability to reverse token transfers. Cryptocurrency users share a common nightmare: accidentally sending assets to the wrong address. With the ERC-721 standard, there's no way to recover your assets if you send them to the wrong address. The ERC-1155 standard includes a "safe transfer" feature, which allows you to verify the correctness of a transaction and reverse it if it's incorrect.

Summary

The fundamental difference between ERC 1155 and ERC 721 is that ERC-1155 addresses the limitations of ERC-721. ERC-721 provides a framework for non-fungible tokens, while ERC-1155 has all the necessary features for working with NFTs.

ERC-1155 has a clear advantage in the long-term prospects of NFTs. Its breakthrough feature is the introduction of semi-fungible tokens and batch transfers of NFTs.

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