Non-fungible tokens (NFTs) have become a versatile tool for representing unique digital assets, from art and collectibles to virtual real estate and identity verification. With this surge in popularity, developers and entrepreneurs are exploring new standards and applications of NFTs to meet the evolving demands of the market. This article explores the different types of NFTs, their unique features, and their applications to cater to diverse needs.
NFTs, or non-fungible tokens, are unique digital assets verified using blockchain technology. Their journey began with introducing the ERC-721 standard on the Ethereum blockchain in 2017. This standard paved the way for creating and trading unique tokens, distinguishing them from fungible tokens like cryptocurrencies. As the NFT space evolved, new standards emerged to address specific needs and use cases, leading to the development of various NFT types.
ERC-721
The Original NFT Standard, ERC-721, is the foundation of most NFT projects. It allows for the creation of unique, indivisible tokens. Each token has distinct metadata and properties, making it ideal for representing one-of-a-kind digital assets like artwork or collectibles. Cryptokitties, a pioneering project that allowed users to collect, breed, and trade digital cats, used this standard.
ERC-721A
Gas-Efficient Minting Developed by the Azuki team, ERC-721A is an extension of ERC-721 that optimizes gas costs for minting multiple NFTs in a single transaction. This standard is particularly useful for large-scale NFT drops and collections.
ERC-1155
Multi-Token Standard ERC-1155 allows for the creation of fungible and non-fungible tokens within a single smart contract. This versatility makes it popular for gaming applications, where users might need unique items (NFTs) and in-game currencies (fungible tokens). Gods Unchained, a popular blockchain-based trading card game, utilizes this standard.
ERC-7231: Identity-aggregated NFT
This standard focuses on creating NFTs that can aggregate multiple identities or accounts, simplifying identity management, credential aggregation, and verification in the Web3 space.
ERC-6150: Hierarchical NFT
This standard introduces the concept of parent-child relationships between NFTs, enabling the creation of nested or hierarchical structures. This can be useful for representing complex organizational structures or family trees within NFT collections, such as virtual real estate and nested collections. For example, a plot of land (parent NFT) can contain buildings (child NFTs) in a virtual world.
ERC-3225: Semi-Fungible Tokens
A novel standard that combines aspects of both ERC-20 (fungible) and ERC-721 (non-fungible) tokens, allowing for partial ownership and increased liquidity of NFT assets. This hybrid approach could revolutionize fractional ownership of high-value digital assets. In fact, tokens can be fungible up to a certain point, after which they become non-fungible. An example would be A batch of concert tickets where each ticket is fungible until it is personalized with a seat number.
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