One of the most divisive issues within the NFT community is whether to mint an ERC-721 or ERC-1155 token. While both use the Ethereum blockchain, there are some pretty important differences that should be considered. Here, we’ll try to wrap our heads around the acronyms and numbers, ask what is ERC-1155 and how it differs from ERC-721.
Fungible vs Non-Fungible Tokens
It’s worth, first, just going over the difference between fungible and non-fungible tokens. Keeping this in mind will help understand some of the differences between ERC-721 and ERC-1155.
Fungible tokens are swappable. Just like the dollar in your wallet. If we swapped dollar bills, it wouldn’t really matter. One may look like it’s been put through the washing machine and ran over a few times, but in theory, it doesn’t matter. It’s as good as any other. The same goes for fungible tokens, known as ERC-20 on the Ethereum network. These are effectively the currency tokens, replaceable and not unique.
Non-fungible tokens (NFT) are not swappable. They are unique and are not replaceable in the same way. While an exact replica of the Mona Lisa may look exactly the same, it’s not the same as the original. In the same way, an NFT is a token on a blockchain (typically Ethereum) that is considered a unique asset with its own individual value and provenance.
What is ERC -721
Until recently, NFTS on the Ethereum network were all ERC-721 tokens. It is still currently the most popular token standard for NFTs.
The minting, selling, and trading of ERC-721 NFTs have to meet strict criteria determined by a smart contract. Dig through the code of an ERC-721 contract, and you’ll find a bunch of conditions that must be met for a transaction to take place.
The ability to bestow attributes to an ERC-721 token such as ownership address, distribution rights, and permissions means it is popular with NFT games, collectibles, and artists.
Due to these attributes and its interoperability within the Ethereum ecosystem, ERC-721 is still considered the gold standard NFT token.
What is ERC-1155
Developed by the NFT gaming platform Enjin, the ERC-1155 token can be thought of as ERC-721 lite. That is, it shares some of the features of ERC-721, such as allowing NFTs but also introduces some welcome benefits.
While ERC-721 allows tokenized assets to be transferred from wallet to wallet, this process is slow, costly, and has to be done one at a time.
ERC-1155 seeks to address this issue, allowing collections of NFTs to be fall under a single, smart contract. Not only that, but these batch transfers of NFTs can happen at a much faster speed than with ERC-721 tokens.
Think of the ERC-1155 token as a vending machine approach, allowing both fungible and non-fungible tokens to all fall under the same smart contract. It’s been described as “the next generation multi-token standard.”
Advantages of ERC-1155
While both tokens have their supporters, ERC-1155 is gaining popularity in the NFT scene for several reasons. Not only can it use a single contract to mint different types of NFTs, but it uses a lot less gas to do so, up to 90% less going by Enjin’s numbers.
Semi-fungible: Aside from the standard fungible and non-fungible tokens, ERC-1155 also introduces the idea of sem-fungible tokens. Finding most use within NFT games, these tokens allow a fungible token to convert itself into a non-fungible token and vice-versa if desired.
Multi-token contracts: With ERC-721, a new contract is necessary for each type of token. ERC-1155 allows an infinite amount of token types under a single contract.
Transaction Batching: Solving a much-disliked aspect of the ERC-721 standard, ERC-1155 allows multiple token IDs to fall under a single transaction. With most transactions on Ethereum taking their sweet time, the ability to transfer a couple of hundred tokens a second is a welcome relief.
More detailed logs: While ERC-721 keeps track of transfers and approvals, ERC-1155 logs everything from the moment a token is minted until it’s burned.
Better DEX support: ERC-1155 contracts have a rule built into the code that decentralized exchanges (DEX) can rely on to fulfill further aspects of a contract. ERC-721 doesn’t have this ability, using a transfer protocol that cannot trigger chains of events in the same way. The upshot is that ERC-1155 tokens can be used within the world of decentralized finance.
Dynamic meta-data: Whereas ERC-721 has static metadata built into the smart contract, the ERC-1155 standard is able to handle an infinite amount of URI codes. This data is not stored on-chain either but instead can point to a web service such as a database.