Explore new token standards for NFTs and its potential uses cases in bringing more utility to the current NFT market.
ERC-6551 is the latest new token standard for non-fungible tokens (NFTs) making headlines on Ethereum.
The Ethereum community is working on several new NFT token standards behind the scenes. This article looks at the latest ERC token standards and their potential use cases in NFTs.
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ERC-6956: Asset-Bound NFTs
ERC-6956, also known as asset-bound NFTs, is a proposed token standard for anchoring a token 1:1 to a physical or digital asset. The standard aims to create a connection between the real world and blockchain, allowing for the tokenization of various assets such as physical collectibles, machine parts, digital assets or even abstract assets like club memberships.
In simpler terms, ERC-6956 is an extension of the popular ERC-721 NFT standard, with the added feature of oracle-based authorization, ensuring that token transfers are authenticated by verifying the control over the underlying asset.
Potential Use Cases
The ERC-6956 asset-bound NFTs provide flexibility in tokenizing different types of assets with various use cases, including but not limited to:
Physical collectibles: Assets such as artwork, stamps or coins can be tokenized, and ownership can be easily transferred on the blockchain. This helps in reducing forgery, verifying provenance and making the ownership transfer process more efficient.
Machine parts: Tokenizing machine parts allows for decentralized supply chain and inventory management. Tracking and verifying individual components become easier, preventing counterfeit parts from entering the supply chain.
Digital assets: Digital assets like in-game items, virtual land or domain names can be more securely and transparently owned, traded, and verified through the implementation of the ERC-6956 standard.
Abstract assets: Club memberships, licenses or other intangible assets can be represented as tokens, simplifying the issuance, transfer and management of these assets.
Read also: Real-World Assets (RWA): Bridging the Gap Between DeFi and TradFi
ERC-5773: Context-Dependent Multi-Asset Tokens
ERC-5773, also known as MultiAsset, is designed for NFTs to enable context-dependent output of information. This means that the asset displayed can differ based on how the token is being accessed. For instance, if the NFT is accessed from within the game, a 3D avatar can be displayed, whereas if the same NFT is accessed from a marketplace, the PNG asset is displayed.
An NFT can possess multiple assets (outputs), which can be any type of file. These assets do not depend on each other. Assets can be ordered at will by the NFT owner but can only be modified, updated, added or removed when both the token owner and issuer mutually agree.
Potential Use Cases
Cross-Metaverse Compatibility: The ERC-5773 standard can support an array of metaverse ecosystems, allowing assets associated with NFTs to be used across different games and platforms.
Multi-Media Output: An NFT can take on varying representations, such as PDF, MP3 or other formats based on the software or platform being used for e-books or other media types.
Media Redundancy: For improved metadata resilience and referenced information, duplicate metadata files can be included across decentralized storage platforms.
NFT Evolution: Users, minters or other pre-approved entities can add, remove or replace assets associated with an NFT.
One example of the capabilities of the MultiAsset token standard (ERC-5773) is a cosmetic item for a game that can have multiple attached assets, covering different games, and various cosmetic items. As a result, it can evolve into an infinitely useful NFT.
Read also: What Are Utility NFTs?
ERC-6059: Parent-Governed Nestable NFT
ERC-6059 introduces the concept of one NFT owning another NFT, without the need of an externally owned account (EOA) or a smart contract. This standard extends the basic NFT standard to allow for nesting and a parent-child relationship between NFTs. In simpler terms, an NFT can own and manage other NFTs, creating a hierarchy of tokens.
In the context of ERC-6059:
- A parent token is an NFT that owns another NFT.
- A child token is an NFT that is owned by another NFT.
- An NFT can be both a parent and a child at the same time, resulting in multiple levels of ownership.
Source: https://eips.ethereum.org/EIPS/eip-6059
The owner of the parent token can manage not only the direct child tokens but also their children, extending the control to multiple levels of hierarchy.
Potential Use Cases
Bundling: Group and sell multiple NFTs together as a single package, making it convenient for collectors to buy a set of related NFTs in one transaction.
Collecting: Organize NFTs in a collection based on the owner's preference, such as grouping NFTs from the same artist or theme.
Membership: Create exclusive memberships to DAOs or clubs where owning a specific NFT (parent token) grants access to additional NFTs (child tokens) like special perks or bonuses.
Delegation: Implement voting systems or delegate decision-making power within decentralized organizations by using nested NFTs as voting tokens or representation of authority.
Read also: What Are xNFTs (Executable NFTs)?
ERC-6220: Composable NFTs
ERC-6220 extends the functionality of the ERC-721 standard by enabling the creation of composable NFTs. These NFTs can selectively add parts to themselves through a process called "equipping," leading to additional customization options and use cases.
Catalogs: A Catalog is a collection of parts from which an NFT can be composed. Catalogs can contain various media types, such as images, audio, video or even mixed-media. The Catalog's type indicates the final output format when an NFT is rendered.
Equippable Parts: Parts can either be "slot types" or "fixed types." Slot types are intended for “equippables,” which allow NFT collections to be equipped into them. Fixed types, on the other hand, are full components with their metadata.
NFT creators can select parts from a Catalog and specify them for an NFT instance. Through this process, tokens can be equipped with other NFTs in their designated slots, creating a highly customizable and interactive design.
Potential Use Cases
Digital Art: Artists can create interactive digital art where collectors can personalize the art pieces by adding or removing parts directly in the art's design.
Dynamic Content: Content creators can develop uniquely tailored digital experiences, where users can customize multimedia content by equipping various categories of media, such as audio tracks, video filters or subtitles.
Token Progression: As NFT owners achieve milestones, they can equip their tokens with new parts, representing their growth and progress over time. For instance, gears can be equipped as gamers progress through the game. Another example is merit tracking, where an “equippable” NFT represents academic achievements.
Provable Digital Scarcity: Most NFTs are not truly scarce as the visual representation is a client-side mechanic. This token standard can enforce that if an item is equipped on an NFT, it cannot be equipped on another.
Read also: Deep Dive Into Generative Art — A Future Hype?
ERC-6381: Unicode Emojis
ERC-6381, known as the Public Non-Fungible Token Emote Repository, is a proposed standard for interacting with non-fungible tokens using Unicode emojis. It operates as a public non-gated repository smart contract, which can be deployed on multiple networks at the same address. It allows users to express their impressions of an NFT using standardized emojis, thereby adding an interactive, feedback-based dimension to NFT ownership.
Potential use cases
Interactivity: ERC-6381 enhances NFT interactivity by allowing users to express their admiration or sentiment towards an NFT using emojis. This can create unique engagement experiences for NFT owners and foster a sense of community around the token.
Feedback-based evolution: Tracking on-chain reactions to NFTs allows for feedback-based evolution of NFTs. This can incentivize interactions with token collections and foster a more dynamic ownership experience.
Valuation: Emoting on NFTs can provide real-time indications of admiration or desirability, which can impact the value of the token. This could give potential buyers and sellers a more robust metric for estimating the value of a specific NFT, rather than relying solely on historical sale prices and market scarcity data.
Read also: The Ultimate Guide to NFT Royalties and NFT Marketplaces in 2023
ERC-6454: Minimal Transferable NFT Detection Interface
The ERC-6454 Soulbound extension is a standard that enables the creation of non-transferable tokens. It provides various ways to make a token non-transferable:
- Non-transferable from the moment they are minted.
- Becoming non-transferable after a specified block.
- Becoming non-transferable after a predefined number of transactions.
- Setting tokens as non-transferable on a per-token basis.
Potential Use Cases
Verifiable attribution: NFTs can be used to represent personal achievements, but if these NFTs can easily be transferred, their authenticity can be questioned. Representing certifications, degrees or professional licenses in digital form are some potential applications.
Immutable properties: NFTs properties differentiate them and establish their scarcity. Ensuring these properties are unalterable by tying the NFT to certain properties provides uniqueness and prevents centralized control by the issuer.
Reputational avatars: NFTs can be accounts which are avatars, accruing reputation in the form of soulbound tokens inside the avatars (via ERC-6059). This makes it easy to collect badges, proof-of-attendance-protocols and even experience, skills, items, and more all in one NFT. Your avatar or wallet can still be transferred but is locked to that particular NFT. Furthermore, fully tradable game characters and on-chain trackable reputation will allow for easily enforceable meritocracy.
Read also: What Are Soulbound Tokens (SBT)?
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