In this article we will talk about the standard ERC-721, which, according to many experts, is one of the most progressive and potentially useful in real implementation.
How the ERC-721 works
As already mentioned, the main distinguishing feature of ERC-721 from the usual ERC-20 is non-fungibility of tokens. This property determines the range of potential implementations of the standard. It is obvious that unique tokens are best suited for the digitalization of unique assets.
A large part of the functions of the ERC-721 coincides with what we have seen in the ERC-20. These unique tokens have the same functions — name, symbol, totalSupply, balanceOf and others. This continuity is necessary at least for ease of daily use of coins, because there is a need to store them in ordinary wallets and trade them on exchanges.
But the unique characteristics require the introduction of new features for smart contracts. Since each token is unique, there is a need to fix the ownership rights of a particular token in the blockchain, as well as to track its movements. To do this, there was a function takeOwnership.
Where to use the ERC-721 standard
From the beginning standard ERC-721 firmly established in the minds of crypto enthusiasts in conjunction with funny game CryptoKitties and its variants like CryptoPunks. CryptoKitties is an inherently collectible game where players collect, exchange and interbreed unique digital kittens, each represented by an ERC-721 token. Of course, some kittens randomly appear rare properties, which make them more expensive than others. Thus, the deficit economy is artificially maintained, which causes some tokens to soar in price to tens of thousands of dollars, while an average price of kitten is $25.
Thus, if ERC-20 can be called the Ethereum currency standard, ERC -721 is a collector standard. Unique tokens are not necessarily equal in value to each other, which is the notorious non-fungibility.
Many people have a passion for collecting. And if someone collects coins or MTG cards, others invest in rare items that exist only in the digital world.
Although the industry’s first reaction was to use ERC-721 to represent unique digital assets in online gaming, a number of projects have already shown the community that the standard has potentially more serious applications.
Since ERC-721 is ideal in cases where non-identical tokens are needed, which should have different parameters and price, it can be used to tokenize real estate, intellectual property, works of art, any other unique goods. In this case, you can set a number of parameters by which the tokens will differ from each other.
The real implementation
A number of projects already use this new standard for purposes which are different from idle collecting.
For example, in the case of the WePower platform. supporting green energy producers, tokens represent a certain amount of electricity, and each token has a number of parameters, including even the type of energy produced (for example, solar or wind power).
The Decentraland project is a virtual world where the ERC-721 standard is used to reflect virtual plots of land. Each site is unique not only by geographical coordinates, but also by other properties, including topography and buildings. Decentraland can be compared to CryptoKitties because both projects are about collecting. At the same time, the first one offers a secondary meaning represented by the creation of economic and political systems in the virtual world.
The sports betting on the CryptoCup blockchain, which produces its first tokens for the world Cup, stands out. This is one of the first experiments on the use of ERC-721 to reflect assets not only unique, but also changing their value relative to each other depending on the events of the real world.
Tokens of the platform CryptoCup are unique tickets for sports betting, which parameters are created by their owners. The owner of the ticket fills in the usual columns: the results of the championship matches, the number of cards, the best scorers. And then he watches as his token changes its relative value after each match.
And finally, we would like to introduce you our ERC-721 Smart token. This is a new version of ERC-721 which can possibly become a new standard for decentralized financial products. Each Smart token is unique and at the same time like ERC-20 the ERC-721 can show the value of each token. You can easily send them to other wallet or share the rights for using the financial product. Our brand new DApp “Luggage crowdsurance” (https://savemyluggage.io/) allows you to save your luggage and get a compensation in 4 ETH only for 0,038 ETH.
To sum up, ERC-721 has opened the way for a new economic model and new smart contracts. Non-interchangeable tokens turned out to be a popular commodity.
ERC-721 quickly gained popularity and, according to some estimates, in peak periods ate up to 20% of Ethereum traffic. Tens of millions of dollars have already been spent on collection tokens, and the expansion of the scope of serious implementations of this standard will be able to raise this bar even higher.