Best Token Standard for NFT Creation: ERC 721 or 1155?
With new applications ever-increasingly arriving on Ethereum, one of the most marked use cases of the open-source blockchain network has been seen in development teams designing new kinds of token standards for NFT creation.
Two marked Ethereum token standards are ERC-721 and ERC-1155, both of which are linked to the growing prevalence of the non-fungible token (NFT) and their applications. The ERC-721 vs ERC-1155 debate is critical and heated. But if you’re interested in Ethereum and NFT creation, the nuts and bolts of what makes the two standards special is well worth knowing.
Why Token Standards Are Important
Before delving into the main differences between ERC-721 and ERC-1155, it’s important to first review why token standards are there in the first place, and what vital roles they serve.
In blockchain, token standards designate the application-level rules and functions that determine the functioning of a certain crypto token. These specifications enable smart contracts to complete their essential roles.
With NFTs progressively becoming a significant factor in culture, NFT creators must conform to particular token requirements in the creation and management of NFTs.
The special characteristics of different token standards guides developers by offering them a wide range of possibilities for custom-designing applications to suit their requirements, and for creating and deploying new tokens.
Intro to ERCs
Ethereum token standards are known as ERC (Ethereum Request for Comments). In a nutshell, ERC is a technical document designed for a specific group of Ethereum users which provides specifications for the methods, functions, and traits for each token type, facilitating interactions between smart contracts and applications.
Early on, the ERC-20 token standard (introduced in 2015), which defines the function of a traditional token like DAI or UNI, dominated the market. However, the past two years have witnessed a growing spotlight on NFTs, which depend on the newer ERC-721 standard (introduced in 2018). But the crypto market has lately been taking a shine to the ERC-1155 token standard (introduced in 2019) with its newly-revised set of properties.
Features of the ERC-721 Token Standard
The revolutionary ERC-721 token standard set the NFT mania in motion and became an NFT creation pillar in the Ethereum ecosystem. You’ve probably heard of CryptoKitties, the set of collectible, randomly generated, 100% unique kittens. But were you aware that ERC-721 was first introduced by Dapper Labs, the company behind CryptoKitties, in 2017? Consequently, as the first of its kind, the ERC-721 standard was popularized for creating the unique, non-interchangeable tokens. Use cases of NFTs based on ERC-721 include digital artwork, music, and blockchain-based games. Here are some of the most notable ERC-721 feature specifications:
- A characteristic pure focus on non-fungible tokens.
- Flexible transfer of NFTs between accounts, enabling trading of NFTs for other currencies.
- Identification of the total network supply of a set of NFTs.
- Easy discovery of the owners of a specific asset.
Features of the ERC-1155 Token Standard
ERC-1155 improves upon the performance of ERC-721 through increasing its efficiency and amending obvious implementation flaws. While the ERC-721 token standard focuses only on non-fungible tokens, the ERC-1155 multi-token standard allows the mixed use of fungible and non-fungible tokens by offering the ability to support various states on a single contract and address. Cool, right? The ERC-1155 token standard was developed in 2019 by the team behind the Enjin project, which provides blockchain-based solutions for games. Here are some of the most notable ERC-721 feature specifications:
- Offers the best of ERC-20 as well as ERC-721 token standards.
- Supports batch transfers by comprising various assets in one smart contract; this enables their transfer with smaller network congestion and lower transaction costs.
- Allows the creation of semi-fungible tokens which basically serve as fungible tokens during trading, only becoming NFTs when redeemed.
- Allows reversing token transfers via a security function that verifies a transaction's validity, and allows tokens to be returned to the issuer incase of transaction failure.
ERC-721 vs ERC-1155: Key Differences
Batch Transfers: ERC-1155 facilitates batch transfers, reduces network congestion, and reduces gas costs by up to 90%. ERC-721 requires creating transactions for individual NFTs, which makes transactions slow, inefficient, and with expensive gas fees (the cost required to complete a single transaction on the Ethereum blockchain).
Token Support: ERC-721 supports only NFT creation, while ERC-1155 supports not only NFT creation, but also fungible and semi-fungible tokens, and allows these types of tokens to be converted to NFTs and vice-versa, a flexibility which is a key benefit of ERC-1155.
Transaction Security: Unlike ERC-721, ERC-1155 has security features that enable worry-free transactions and allow issuers to reclaim tokens if they are sent to the wrong address. This asset security feature also includes all logs made during the token lifecycle, from minting to burning.
Decentralized Exchange (DEX) Support: Unlike ERC0721, ERC-1155 is executable on DEXs as it includes code to support DEXs by satisfying certain smart contract aspects.
Metadata Flexibility: Compared to ERC-721, which uses static metadata embedded in smart contracts, ERC-1155 allows more flexible management of many URI (Uniform Resource Identifier) codes.
VIDEO Here’s a short video that explains the main differences between ERC721 and ERC1155
Bottom line is, ERC-721 is an effective token standard that has served considerable purpose; yet, ERC-1155 offers greater efficiency, flexibility and security while also granting time and cost savings. ERC-1155 addresses the limitations of ERC-721, and while ERC-721 offered the foundation for NFTs, ERC-1155 further solidified it by offering traits required for the long-term NFT prospects, such as semi-fungible tokens and batch transfers of NFTs.
Ofcourse, we think existing non-ERC-1155 projects should migrate to the standard to experience the aforementioned functionality enhancements.
So, which token standard are you going for in your NFT creation journey?
Does your project need Smart Contracts? Our expert WEB3 Platforms Team develops Smart Contracts using the Solidity programming language as well as provides Auditing services. Let's plan your Web3 expansion. Get a quote today!
We’re BLACK LEMON, the leading Web3 Lab & NFT Production House in the MENA, and we’re your go-to for all things Web3 & NFT. Cruise through our website & see how you can benefit from our in-demand core services.