ERC721 Non-Fungible Tokens

ERC721 or ERC-721? Non-fungible tokens or NFTs? In fact, both are correct and are equally interchangeable. Over the past few months and at present, NFTs are receiving a lot of popularity from the Web3 community, social media channels and all media channels in general. Users find it difficult to distinguish what is the correct wording and terminology, so this article will help identify these knowledge gaps and provide a substantial informative introduction to NFTs and ERC721.

Also, if you would like to learn more about this topic, then feel free to get in touch with our team as we can help create your own NFT or NFT Marketplace.

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What is a Non-Fungible Token (NFT) ?

This is perhaps one of the most searched questions on the Google search engine since the end of 2020. A Non-Fungible Token (NFT is the short term) is used to identify something or someone in a unique way.

The best usage of NFT tokens is at platforms which offer collectible items, lottery tickets, numbered tickets etc. This type of token has many different possibilities and has a special standard – the ERC-721 token standard. ERC721 tokens are on the pillar of popularity since late 2020 up to early 2021 and even today users are investing a lot of funds into them. These kind of tokens have helped to create a new concept on the blockchain which ensures that distinctive features of assets can become in a sense immortal within one large community which we call life. As a result, NFTs provide a digital representation of one of a kind prices of art. The ownership of such art can easily be tracked and proved through the blockchain’s records, therefore minimizing the level of counterfeit art or goods.

From a technical point of view, all NFTs have a few variables which include a uint256 variable called tokenId.  As such, for any ERC-721 contract the uint256 tokenId must be globally unique. Consequently, dApps can have converters which use the tokenId as input and they produce outputs of an image variation. Examples include variations of tokenized cats, monkeys, weapons, zombies etc. For example, monkey art or apes in particular, have been a massive topic of interest since the Bored Ape Yacht Club NFT Marketplace was created:

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ERC-721 token standard

ERC-721 or simply ERC721 stands for Ethereum Request for Comments. ERC721 is not any type of technology or platform. It is an Ethereum token standard which provides technical assistance to developers, specifically for project development. The non-fungible token standard was created by William Entriken, Dieter Shirley, Jacob Evans, and Nastassia Sachs due to an incapability within an ERC-20 interface in early January 2018.

It provides functionalities which allow the transfer of tokens from one account to another, the possibility to review current token balance of an account, receiving specific tokens as well as access to the total supply of tokens available on the network. Apart from the aforementioned functionalities, it also has additional features such as the ability to approve an amount of tokens from an account that can be moved by a third party account.

If a smart contract implements the some or all of these functionalities it can easily be named an ERC721 NFT contract. Therefore, once deployed, it will be responsible to keep track of the created tokens on the Ethereum network.

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Token standards

While analyzing the ERC721 token standard, it is also good to be resourceful and look at the bigger picture. When we expand the frame we can see that there are other token standards which have been developed long before ERC721. Here is a short list of popular token standards on the Ethereum blockchain:

         • ERC-20 -A standard interface for fungible (interchangeable) tokens, similar to voting tokens, staking tokens or virtual currencies.

         • ERC-721 –The common interface for NFTs, most examples include artwork or games.

         • ERC-777 –This standard helps users develop additional functionalities on top of tokens such as a mixer contract for improved transaction privacy or an emergency recover function should a private key be lost.

         • ERC-1155 –This standard allows for more efficient trades and bundling of transactions. Therefore, costs are reduced. This token standard allows for creating both utility tokens and non-fungible tokens such as CryptoPunks.

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Leading NFT Marketplaces

As well as token standards there are multiple NFT Marketplaces which already exist and are gradually expanding. Such NFT Marketplaces include:

Opensea, Rarible, SuperRare, Axie NFT Marketplace, CryptoPunks/Larva LabsMarketplace, NiftyGiveaway, Solanart, Binance NFT Marketplace.

Different to subscription-based businesses such as Spotify, Tidal, Netflix and many others, which offer digital services for a monthly subscription fee, NFT platforms are created based on the idea that digital content can also be scarce. Demand is shifting and now physical goods are not the only scare goods out there. Now, digital goods are also limited in quantity and can therefore be meaningfully owned and traded.

NFT Marketplaces such as the ones we already discussed, are leveraging blockchain technology similar to traditional auction houses. In this case, digital art is the most popular content being traded. In addition to that, these platforms act as a form of authenticator which confirms which artwork is an original and which art is replicated. Another feature which some platforms offer is “burning” items in order to decrease supply and increase scarcity of digital products. Lastly, there are blockchain transaction logs which create a royalty program. Royalties are earned automatically every time a NFT is traded and are calculated in revenue percentage from second-hand sales with the original creator of the NFT.

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Implementation of ERC721

ERC721 has seen a lot of success and to show this success, highlights will shift to how the token standard has seen implantation with one of the popular games on the Ethereum blockchain – CryptoKitties. The game itself has already made a lot of headlines within crypto news and the crypto community due to its unique idea which exists on the Ethereum network. So far, it is one of the best examples of how ERC721 is implemented into practice.  CryptoKitties allows players to develop, buy, sell and trade digital versions of non-fungible token cats. Each cat is unique in its own specific way. Therefore, uniqueness drives consumers to collect them due to their characteristics or scarcity.

CryptoKitties is the pioneering platform which showcases how value is placed in digitally-scarce goods benefiting from human nature’s need to collect items. The ERC721 token standard plays a massive role as users can be confident that their digital assets cannot be duplicated or obtained by a third party. As such, ERC721 provides a form of security on the Ethereum network.

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Another example is Decentraland which allows users to purchase digital land in the metaverse. Land is scarce by default and each parcel is tokenized with a unique token. As a result, games such as CryptoKitties and Decentraland are reshaping the future of gaming as of the time this article is being written.

Lastly, NFT Marketplaces have generated popularity so much that even celebrities are investing in them. For example, famed basketball player Steph Curry owns a Bored Ape NFT. Therefore, not only scarcity drives prices up, but so does popularity among different communities. Another example is CryptoPunks which generate more than
762.50Ξ or the equivalent of ($3.21M) for the duration of 24 hours.

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List of examples with NFT implementation

1. CryptoKitties. https://www.cryptokitties.co

2. 0xcert ERC-721 Token. https://github.com/0xcert/ethereum-erc721

3. Su Squares. https://tenthousandsu.com

4. Decentraland. https://decentraland.org

5. CryptoPunks. https://www.larvalabs.com/cryptopunks

6. DMarket. https://www.dmarket.io

7. Enjin Coin. https://enjincoin.io

8. Ubitquity. https://www.ubitquity.io  

9. Propy. https://tokensale.propy.com

10. CryptoKittiesDeployed Contract. https://etherscan.io/address/0x06012c8cf97bead5deae237070f9587f8e7a266d#code

11. SuSquares Bug Bounty Program. https://github.com/fulldecent/su-squares-bounty

12. XXXXERC721.https://github.com/fulldecent/erc721-example

13. ERC721ExampleDeed.https://github.com/nastassiasachs/ERC721ExampleDeed

14. CurioCards. https://mycuriocards.com

15. RarePepe. https://rarepepewallet.com

16. AuctionhouseAsset Interface. https://github.com/dob/auctionhouse/blob/master/contracts/Asset.sol

17. OpenZeppelin SafeERC20.sol Implementation. https://github.com/OpenZeppelin/zeppelin-solidity/blob/master/contracts/token/ERC20/SafeERC20.sol

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Want to start your own NFT Marketplace?

After learning what NFTs are and what is ERC721 why not create your own NFT Marketplace or your own NFT? Our team of developers can help you achieve these results swiftly and efficiently. Simply, visit our services page if you wish to learn more.