WTH Is ERC-6551 & Why Does It Matter?
Ah, the world of cryptocurrencies! It's like a never-ending amusement park of innovative ideas. xD As a self-proclaimed crypto enthu, I'm always on the lookout for the latest and greatest in the crypto realm. And guess what? I recently stumbled upon a fascinating new token standard that has completely taken me off guard – ERC-6551! NFT folks would love this development. I didn't get it when the first time I read about it on Twitter. Then I re-read about it, again and again. 🤤 So, here's what I understood so far:
What Is ERC-6551?
As we all know, ERC-721 is a token standard that revolutionized Web3 and enabled the creation of NFTs on Ethereum. ERC-6551 is not just any ordinary token standard; it's going to upgrade ERC-721 to a whole new level!
ERC-6551 tokens will have smart contract capabilities and they can have their own wallets just like Metamask. Which means, now these tokens can associate to other NFTs and digital assets. These are also known as Token Bound Accounts (TBAs)
Benefits of ERC-6551
- Get more insights in the transactional data
- You can bundle your NFTs under same profile using Token Bound Accounts
- Each NFT can now have a separate identity that can interact with apps on its own
- Increased NFT utility and value
Source: https://coinmarketcap.com/alexandria/article/what-is-erc-6551
Ability to engage with various on-chain assets and platforms will have a direct impact on NFT's value apart from speculation because of:
- Stored assets
- Past interactions
A twitter user Benny owns SAPIENZ which itself is an owner of other NFTs from the top collections listed on OpenSea. The total value of this one NFT will be the total value of all those NFTs or maybe more. He can transfer the ownership of all those NFTs in one single transaction. I hope you got the point of ERC-6551 by now.
https://twitter.com/BennyGiang/status/1655781466582953984
A ton of apps and developers are integrating with the new token standard but more established products are still not ready to use it. There's also a risk of security since hackers now need to attack the top level NFT to claim everything down below the hierarchy.
Use Cases of ERC-6551
- Game Asset Bundling: With ERC-6651, game developers can bundle multiple NFTs and tokens into a single profile or inventory. This enhances the user experience by allowing players to manage and trade a collection of game-related assets as a cohesive unit.
- Loyalty/Reward Programs: Loyalty programs or in-game rewards based on an NFT's past behavior. This could also have an impact on the value of your NFT, as platforms could use your NFT's identity and reputation to determine your creditworthiness or reduce counterparty risks.
- Proofs of Ownerships: By utilizing ERC-6651, buyers and sellers can access more detailed and insightful information about the transaction history of an NFT. This includes the ability to track past ownership changes, interactions, and even utility beyond basic ownership proof.
- Interactive NFTs: An NFT character in a game could acquire new abilities by owning specific tokens or interact with external platforms to unlock unique features or collaborations.
The Future of NFTs
ERC-6551 opens up a whole new realm of creativity and innovation, allowing developers and creators to build immersive experiences and dynamic digital assets like never before.
I can envision a future where ERC-6551 tokens are used in gaming, virtual reality, loyalty programs and even decentralized finance. These tokens have the power to bring a touch of magic and interactivity to every corner of the blockchain universe. It's like stepping into a digital wonderland where anything is possible!
What do you guys think? Comment below with your thoughts!
Posted Using LeoFinance Alpha
This post has been manually curated by @bhattg from Indiaunited community. Join us on our Discord Server.
Do you know that you can earn a passive income by delegating your Leo power to @india-leo account? We share 100 % of the curation rewards with the delegators.
100% of the rewards from this comment goes to the curator for their manual curation efforts. Please encourage the curator @bhattg by upvoting this comment and support the community by voting the posts made by @indiaunited.
This post has been manually curated by @bhattg from Indiaunited community. Join us on our Discord Server.
Do you know that you can earn a passive income by delegating to @indiaunited. We share more than 100 % of the curation rewards with the delegators in the form of IUC tokens. HP delegators and IUC token holders also get upto 20% additional vote weight.
Here are some handy links for delegations: 100HP, 250HP, 500HP, 1000HP.
100% of the rewards from this comment goes to the curator for their manual curation efforts. Please encourage the curator @bhattg by upvoting this comment and support the community by voting the posts made by @indiaunited..
This post received an extra 7.64% vote for delegating HP / holding IUC tokens.
I think it's a great development. This new version of tokens will unlock more possibilities in the crypto space. It already has a cool feature like multiple storage facility which stacks up its overall value. Excited to see how it gets used in the financial space :)
I think that is a nice development but I still dislike the idea of gas fees for these actions. Even if you bunch it into 1, if that fee is like $100 then it's just crazy.