ERC1155 – Explore the ERC-1155 Token Standard

If you understand what an NFT is and that the abbreviation of "Non-fungible token" no longer confuses you, you are ready to delve deeper, which is necessary before learning about ERC-1155.

To address these concerns, the ERC-1155 standard was created, which can function as both a fungible and non-fungible token. The ERC-1155 standard allows you to mint and deploy an infinite number of tokens under a single smart contract, reducing network congestion and gas fees.

Here, we will define the ERC-1155 token standard and examine its benefits and advantages.

What is ERC-1155 ?

ERC stands for "Ethereum Request for Comments." It is a type of EIP that focuses on Ethereum application standards, which include tokens. Tokens are generally classified as either fungible or non-fungible. Fungible tokens, like dollar bills or pesos, are interchangeable. Non-fungible tokens, like a painting or a book, are unique and non-transferable.

Even before ERC-1155, the two most common token standards for fungible tokens were ERC-20 and ERC-721 for non-fungible tokens. They couldn't (and still can't) be wrapped up in the same smart contract. Because of this limitation, if someone wanted to transfer a USDC (ERC-20) and a CryptoKitties NFT (ERC-721), they would have to execute multiple transactions, which was inefficient and costly.

ERC-1155 addresses this issue by combining the two token standards. The ERC-1155 token standard allows for the efficient transfer of fungible and non-fungible tokens in a single transaction.

How does ERC-1155 work ?

The initial motivation for ERC-1155 was to address issues confronting blockchain game developers and players. There are numerous examples of ERC-1155 being used in applications other than gaming. Gaming, on the other hand, is a great reference use case for understanding how ERC-1155 works.

Massively multiplayer online games (MMOs) contain tens of thousands of items—armor, weapons, shields, skins, coins, badges, castles, and so on—that players can collect and trade with one another. Some items, such as coins, are fungible, while others, such as a sword, are not. Each of these items is a token on the blockchain. Each item necessitates its own smart contract. That's 100,000 smart contracts in a game with 100,000 items!

Multiple items can be stored in a single smart contract using an ERC-1155 token, and any number of items can be sent to one or more recipients in a single transaction. This means you could send a sword to one friend, a shield to another, and 100 gold coins to both in a single transaction.

What makes ERC-1155 so unique?

ERC-1155 has a number of unique characteristics, including the ability to transfer multiple token types at once, resulting in increased efficiency and lower transaction costs.

In contrast to ERC-20 and ERC-721, which require a new smart contract for each type of token, it supports an infinite number of tokens.

It supports semi-fungible tokens in addition to fungible and non-fungible tokens. Semi-fungible tokens function similarly to general-admission concert tickets. They are interchangeable and can be purchased for money prior to the show (fungible). However, they lose their pre-show value and become collectibles after the show (non-fungible).

It has a safe transfer function, unlike ERC-20 and ERC-1155, which allow tokens to be reclaimed if they are sent to the wrong address.

Who uses ERC-1155?

Enjin - Enjin provides a variety of blockchain products, many of which use ERC-1155.

Horizon - Horizon is a blockchain game company that uses ERC-1155 in its Skyweaver game.

OpenSea - The ERC-1155 implementation of the NFT marketplace allows multiple creators per smart contract, but only one creator can mint more copies.

OpenZeppelin - The ERC-1155 standard is used by OpenZeppelin's blockchain security products.

The Benefits of the ERC-1155 token standard

1. Token transfers in batches

As previously stated, the ERC-1155 token standard was the first to successfully implement batch token transfers. Users can transact an infinite number of tokens using a single smart contract, reducing network congestion and saving money on gas fees.

2. Token with multiple functions

While ERC-20 is an excellent currency standard, and ERC-721 is the definitive non-fungible standard, the two do not get along. ERC-1155 tokens, on the other hand, can function as both and even convert from one to the other. This means that a single smart contract can handle both types of tokens at the same time.

3. External metadata that is more efficient

The ERC-1155 standard also removes metadata from the contract and replaces it with a JSON file. The metadata also removes some obsolete and legacy fields, transferring much of the data from the smart contract to JSON. While this only saves a small amount of data per file, it saves a significant amount of congestion on the blockchain as a whole.

4. Integrated transaction validation

One of the issues with some legacy smart contracts is that there will be uncertainty about telling what will happen if something goes wrong. The Enjin team has ensured that no coin or asset will be lost if an incorrect address is entered or there is a mistake elsewhere in the contract with ERC-1155. The standard adds a built-in function that validates transactions before executing them.

The Primary Advantages of ERC-1155

Now that you know what the ERC-1155 standards are, let's take a look at some of the main advantages of ERC-1155:

Allows the use of NFTs, fungible tokens, and semi-fungible tokens.

Increased level of security

Lower gas prices

Support for decentralized exchanges (DEXs) has been improved.

Workload reduction

Metadata that changes over time

The Future of ERC-1155

Despite the fact that ERC-1155 has been around for four years, it is still underutilized in comparison to its ERC-20 and ERC-721 counterparts. Given ERC-1155's versatility, this may come as a surprise; it's possible that existing non-ERC-1155 projects will migrate to the new standard in order to expand their functionality.

ERC-1155 will be used in Ethereum-based blockchain games in the future. The advent of play-to-earn games may hasten this process.

In the end

The growth of fungible and non-fungible tokens on the Ethereum blockchain has resulted in numerous protocols and standards for each. ERC-20 and ERC-721 are the standards for fungible and non-fungible tokens, respectively. It comes at a high cost, however, because they are not interchangeable or compatible. As a result of these issues, a new standard, ERC-1155, was developed.. However, NFTs and other fungible tokens can now share a smart contract with this new and more powerful standard in the meantime.