As the NFT space grew, it became clear that there were some limitations to the ERC-721 and ERC-20 standards.
The ERC-1155 standard was developed to address these concerns, capable of acting as both a fungible and non-fungible token. With the ERC-1155 standard, you can mint and deploy an infinite amount of tokens all under a single, smart contract, reducing network congestion and gas fees.
Here, we’ll ask what is the ERC-1155 token standard and take a closer look at its use cases and benefits.
Multiple tokens under a single, smart contract
- Developed by Enjin
- Allows both fungible and non-fungible assets
- Interoperability across Ethereum-based ecosystems
Until the introduction of ERC-1155, Ethereum had two dominant Ethereum Request for Comments standards, better known as ERC-tokens.
The first was ERC-20, released on the launch of the Ethereum blockchain in 2015. ERC-20 is Ethereum’s fungible standard used for ETH and other currencies that are based on the decentralized network.
ERC-721 came a couple of years later over the course of 2017 to 2018. The token has come to be recognized as the gold standard for NFT minting. ERC-721 tokens are smart contracts written in the Solidity language and allow pretty much any data to become tokenized.
Each ERC-721 token is unique and represents a single asset.
ERC-1155 tokens, however, allow an infinite amount of tokens to be minted under a single contract. This means ERC-1155 can act as both a fungible and non-fungible token simultaneously.
In practical terms, this means collections of NFTs can be minted and transferred under a single transaction.
The token was created by the game company Enjin to consolidate both currencies and fungible assets with non-fungibles such as digital cards, in-game skins, and pets. The token was developed in 2018 and was pushed to “final” status in 2019 after dozens of revisions and community comments.
Benefits of ERC-1155 token standard
For many, ERC-1155 represents the ultimate Ethereum token, solving most of the underlying issues with ERC-721 NFTs.
1. Batched token transfers
As discussed, the ERC-1155 token standard is the first to implement batched token transfers successfully. Under a single, smart contract, users can transact an endless amount of tokens, easing network congestion and saving on gas fees.
2. Multi-functional token
While ERC-20 does currency well, and ERC-721 is the definitive non-fungible standard, the two don’t play nicely together. ERC-1155 tokens, however, can act as both and even convert from one to the other. This means a single smart contract can handle both kinds of token simultaneously.
3. External, more efficient metadata
The ERC-1155 standard also shifts metadata out of the contract and, instead, uses a JSON file. The metadata also removes some outdated and legacy fields, moving much of the data out of the smart contract and into the JSON. While this only saves a small amount of data per file, collectively, this saves a significant amount of congestion on the blockchain.
4. Built-in transaction validation
One of the issues with some legacy smart contracts is that if something goes wrong, there’s no telling what will happen. With ERC-1155, the Enjin team has ensured that no coin or asset will be lost if an incorrect address is inputted or there is a mistake elsewhere in the contract. The standard introduces a built-in function that tests the validity of transactions before executing them.
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How is ERC-1155 being used?
Perhaps the most significant use of the ERC-1155 standard is on NFT marketplaces like OpenSea and Rarible.
Prior to ERC-1155 implementation, the minting and selling of NFTs was done exclusively by ERC-721 tokens. These are robust, immutable digital assets and still play an important role in the NFT space. However, the standard only allowed one NFT to be minted at a time, and this meant gas fees racked up quickly.
Nowadays, these platforms make use of what’s called “lazy minting,” which uses the ERC-1155 standard to effectively create NFTs without gas fees.
This model lessens strain on the Ethereum blockchain by only minting when the first token in a collection is minted, with the ERC-1155 standard allowing the rest to be minted under the same contract if necessary.
As a multi-token standard, ERC-1155 is also being used for in-game assets and currency and is primed and ready for use by the gaming community at large.
Items such as a bundle of arrows, for example, can be treated as a fungible token in-game. Whereas a rare and powerful axe can be classed as a non-fungible asset, unique and one-of-a-kind.
ERC-1155 also means these items can be converted to currency and back easily.
This interoperability also allows the possibility for payments to be made in multiple currencies, as long as they are ERC-1155 based.
The ERC-1155 token is considered by many to be the final Ethereum token. By solving the issues of transaction throughput and minimizing gas fees, not only does the token create a better experience for the user, it eases the burden on the already strained Ethereum blockchain.