Since the birth of blockchain technology in 2008, the crypto market has experienced rapid development. However, the total market value of the entire crypto market is still not as high as the market value of Apple, and Web3 still lacks practical applications in the real world. However, a new research report from Citibank, "Money, Tokens and Games", may change this situation. In the report, Citibank regards the tokenization of real-world assets (RWA) as the main narrative in the next stage, believing that it may have a huge impact on the development of Web3, which will enable the blockchain and Web3 industries to have the next billion users and may bring tens of trillions of dollars of market economic activities.
In the grand narrative of real-world asset tokenization (RWA), Spinach believes that the ERC-3525 standard has great potential. It is a semi-fungible token (SFT) standard that combines the characteristics of ERC-20, ERC-721 and ERC-1155, allowing it to more effectively represent and manage more complex assets such as bonds, coupons, invoices, futures, options and ABS. In this way, ERC-3525 has great potential to promote the development of real-world asset tokenization (RWA), thereby promoting the widespread real-world application of Web3.
This article will compare the components of ERC-20, ERC-721, ERC-1155 and ERC-3525 to help you understand the differences between these token standards, then explore the digital world modeling ideas of ERC-3525 from three levels, and finally look forward to which areas of ERC-3525 are worthy of attention in the future.
Author: Spinach spinach!
Special thanks to Mr. Satsuma for his careful polishing and optimization of this article
Table of contents
Background
Comparison of existing ERC token standards - How to understand ERC-3525?
ERC-20
ERC-721
ERC-1155
ERC-3525
Understanding ERC-3525 from three levels is a digital world modeling idea
Super NFT that can be split and combined
Universal digital container
Visualizing Smart Contracts
Which ERC-3525 application areas are worth paying attention to in the future?
Real-World Assets (RWA)
Virtual assets or commodities
Social, identity and tokenized accounts
Summarize
Background
Before introducing ERC-3525, let’s first introduce what EIP and ERC are:
EIP, the full name of Ethereum Improvement Proposals, is a framework in the Ethereum community that allows anyone to propose improvements or updates to the Ethereum network. These proposals can involve the Ethereum protocol itself, related client APIs, or provide relevant standards for other projects in the Ethereum ecosystem.
ERC, the full name of Ethereum Request For Comment, is a special type of EIP, which focuses on application-level standards, such as smart contract design patterns, interface definitions, etc. These ERCs usually provide a standard template for Ethereum application developers to ensure that different projects and applications can have a shared interface or standard. Regarding the relationship between the two, in simple terms, all ERCs are EIPs, but not all EIPs are ERCs. EIPs cover a wider range, including changes in the underlying protocol, etc.
ERC-3525 was created on December 1, 2020. It was designed by core members of Solv Protocol and supported by core developers of the Ethereum community. The process from the initial proposal to its final acceptance by the community took 20 months. During this period, it was improved through several drafts and finally officially passed as the ERC token standard in September 2022. As an Ethereum standard created by a team with Chinese core members, ERC-3525 is also ushering in a new round of attention in the industry.
Comparison of existing ERC token standards - How to understand ERC-3525?
ERC-3525 is a semi-fungible token (SFT) standard. When many people first learn about ERC-3525, they may think it is a patchwork of ERC-20 and ERC-721. But in fact, ERC-3525 is a cornerstone universal standard, and even has an overwhelming advantage over ERC-20, ERC-721 and ERC-1155 in some areas. Next, we will help you understand ERC-3525 by comparing the key components of other token standards (key components ignore other attributes such as names and symbols) and their advantages and disadvantages.
Image source: solv.finance PPT
ERC-20
ERC-20 is one of the most widely used token standards on Ethereum, i.e., homogeneous tokens, which means that each token is equal in function and value, without any difference. That is why they are called "homogeneous". Stablecoins are an important example of ERC-20 applications, where each stablecoin is homogeneous and interchangeable, representing the same value.
Key components: address and value. Address is the address of the specified asset owner, and value is the number of tokens owned by the address. Under the ERC-20 standard, each address (Address) can be associated with a balance (Value), which represents the number of tokens held by this address. All balances are the same and there is no difference.
Features and advantages: ERC-20 tokens correspond to interchangeable assets, just like traditional currencies or shares, which makes ERC-20 very useful in many applications, such as representing shares of a company or used as a trading pair for decentralized exchanges (DEX). ERC-20 is also widely used in DeFi applications such as lending platforms and liquidity mining, and ERC-20 can be split into non-integers, and you can own 0.5 ERC-20 tokens.
Limitations: Since ERC-20 tokens are fully fungible, this makes them unusable for representing unique or non-fungible assets, such as art or collectibles.
ERC-721
When it comes to ERC-721, we have to mention non-fungible tokens (NFT). Well-known NFTs such as Bored Ape and Azuki all belong to the ERC-721 standard, which describes how non-fungible tokens should be created and managed on the Ethereum blockchain.
Unlike ERC-20 tokens, where each unit is equivalent, each unit of ERC-721 tokens is unique and non-fungible, making them ideal for representing unique digital or real-world assets such as artwork, real estate, collectibles, etc. The earliest NFT CryptoPunk was not the ERC-721 standard, but the ERC-20 standard, but the emergence of CryptoPunk prompted the birth of ERC-721 and became the cornerstone of many valuable applications such as NFT.
Key components: tokenId and owner. TokenId is a unique identifier used to distinguish different ERC-721 tokens. Owner is the address of the token owner. Under the ERC-721 standard, each token is different and unique, distinguished by the ID attribute, and each ID is associated with an owner.
**Features and Benefits:**ERC-721 tokens are non-fungible and each token is unique. This makes them ideal for representing unique items or assets, such as artwork, collectibles, real estate, or other unique assets. This also makes them valuable in creating and trading digital art and other unique digital assets.
**Limitations:** Due to the non-fungible nature of ERC-721 tokens, they cannot be effectively used to represent fungible assets such as currency or shares, lack advantages in liquidity, have poor composability and are not divisible. You cannot own 0.5 ERC-721 tokens.
ERC-1155
ERC-1155 is a multi-instance token standard that combines the features of ERC-20 and ERC-721, and is designed to handle multiple different types of tokens more efficiently and flexibly. In the previous ERC-20 and ERC-721 standards, each different token required the deployment of a new smart contract. This means that if you want to create a new token, you need to deploy a new contract, which may result in duplicate code and expensive gas fees. Moreover, different contracts may also need to handle complex interactions.
ERC-1155 provides a way to manage multiple tokens in a single smart contract. Each token can be homogeneous (like ERC-20 tokens) or non-homogeneous (like ERC-721 tokens). For example, in a game, you can use ERC-1155 to create different types of weapons (non-homogeneous) such as sticks, knives, and guns. Each weapon under each weapon type (non-homogeneous) is homogeneous. Knife No. 1 and Knife No. 10 are exactly the same (homogeneous), but knives and guns are different (non-homogeneous).
Key components: id, value and owner. id is a unique identifier used to distinguish different ERC-1155 tokens. value represents the number of tokens with a specific id. owner is the address of the token owner. Taking the example of weapons, different types of weapons represent different IDs, and the number of weapons under each weapon type (ID) is the Value. The weapons under each type (Value) are the same.
**Feature Benefits:**ERC-1155 tokens can represent both fungible and non-fungible assets, making them very useful in a range of applications. For example, a game might use ERC-1155 tokens to represent a player’s equipment type (non-fungible) and equipment quantity (fungible).
**Limitations:** While the flexibility of ERC-1155 tokens makes them useful in many situations, this flexibility also means that ERC-1155s may be more complex to understand and implement than ERC-20 or ERC-721, and cannot represent assets that can be partially exchanged, such as bonds or futures, and cannot be split into non-integer amounts. You cannot have 0.5 ERC-1155 tokens.
ERC-3525
ERC-3525 is a semi-fungible token (SFT) standard that combines the features of ERC-20, ERC-721, and ERC-1155. It is more complex than ERC-1155, but can be used to express and manage complex digital financial assets, such as securities, bonds, options, futures, swaps, insurance strategies, etc. It is more composable than other token standards. ERC-3525 represents a digital world modeling idea that can be understood from three levels: a decomposable super NFT, a universal digital container, and a visualized smart contract.
Key components: id, value, slot and address. Each SFT has an id attribute equivalent to ERC-721 to identify it as a globally unique entity, so that the SFT can be transferred and approved between addresses in a way that is compatible with ERC-721. In addition, each token also contains a value attribute, which represents the quantity of the token, similar to the "balance" attribute of the ERC-20 token.
Address represents an address with slots and IDs. Each address can have any number and type of IDs and slots. What is different is the slot attribute. Values with different IDs in the same slot can be transferred and exchanged, but different slots cannot be transferred and exchanged. A slot can have many IDs, but different IDs can only have one slot.
The focus of ERC-3525 is Slot. Simply put, Slot represents a classification. There will be many IDs under the same Slot. Although each ID is different and has its own Value, different IDs under the same Slot can be considered the same and can be exchanged, combined and split.
Take the membership card as an example. Suppose the membership card has two slots, KFC and McDonald's respectively. Each KFC and McDonald's membership card has a different ID representing the membership cards of different people, such as Satoshi Nakamoto's card and Vitalik's card. Each person's membership card has a Value to represent his points.
Then, in the same slot, that is, the KFC membership card, the points in the Satoshi card and the Vitalik card are considered to be the same thing. Satoshi can transfer points to the Vitalik card and receive points from the Vitalik card. Satoshi can also split the points in his own points card into a primary card and a secondary card (two different IDs, arbitrarily assigned points value), or merge the primary card and the secondary card back.
In different slots, KFC and McDonald’s are two different companies, so KFC points cannot be transferred to McDonald’s points card. Naturally, there is no transferability, exchangeability and combination between Value and ID.
**Feature advantages: **ERC-3525, due to its more complex structure, can be used to represent various complex digital structures such as securities, bonds, options, futures, swaps, insurance policies, membership cards, etc. In addition, because it is a semi-homogeneous token, each token can have its own characteristics and rules, making this standard very flexible and powerful, and due to the existence of Slot, ERC-3525 can realize transfers from ID to ID, just like transferring points from Satoshi's points card to Vitalik's points card, and it can also support the splitting and combination of non-integers.
**Limitations:** The complex structure of ERC-3525 leads to a high threshold for understanding. Due to the existence of Slot, there are more centralized features in the technical structure. It is difficult to develop
Understanding ERC-3525 from three levels is a digital world modeling idea
Compared with other token standards, ERC-3525 has a more complex structure. As a universal token standard, the composability of its data structure enables it to create various complex token structures in the digital world, just like using Lego bricks to create various complex models in the real world. It can be said that ERC-3525 represents a digital world modeling idea. To deeply understand ERC-3525, it can be understood from three aspects: decomposable and combinable super NFT, universal digital container, and visual smart contract.
Super NFT that can be split and combined:
ERC-3525 can simultaneously express the three token standards of ERC-20, ERC-721 and ERC-1155 by simply converting its properties. For example:
**Expression of ERC-20: **Slot is the same, the value between IDs can represent homogeneous tokens
**Expression ERC-721: **Slot is different, only one ID can represent non-fungible tokens
Expressing ERC-1155: Different slots can represent multiple instances of tokens with multiple different IDs
But ERC-3525 is more than that. On top of that, ERC-3525 can realize the splitting of non-fungible tokens. For example, a boring ape can be split into several parts in a real sense instead of using an additional contract to realize NFT fragmentation. For most people who first learned about ERC-3525, the general understanding may be that ERC-3525 is a super NFT that can be split and combined. There is nothing wrong with understanding ERC-3525 from this level, but this is just the tip of the iceberg, and it does not fully understand the greater potential of ERC-3525.
Generic number container:
To understand that ERC-3525 is a universal digital container, you need to understand that ERC-3525 is an account abstraction. In the case of the membership card mentioned above, ERC-3525 can realize the transfer between IDs. The internal ID is essentially an account, which has the functions of receiving, storing and sending, just like a basket full of various digital assets. Since ERC-3525 is an abstract account, it means that we can separate and decouple the operation rights of the ID in a certain slot and grant it to other wallet addresses, not just the owner of this ERC-3525 smart contract.
The difference between ERC-3525 account abstraction and ERC-4337 account abstraction is that ERC-4337 decouples the signature rights and ownership of the smart contract wallet and can use custom signature methods for operations, such as implementing traditional account password operations on the wallet, while ERC-3525 account abstraction still relies on the EOA wallet account (a wallet operated using a private key) for operations, and one ID can only receive assets under the same slot.
If the ERC-3525 ID is understood as an account with receiving, storage and sending functions, it means that it can be used as a container for digital assets. Any digital asset can be poured into this universal digital container as a solution to become a uniform solution. At this time, the Value of this ID becomes a share of a basket of assets.
For example, in a slot, 100 Bitcoins and 10 Ethereums are poured into container A (ID: A). Then, Bitcoin and Ethereum will become a uniform solution after entering the container as a solution. If the Value of container A is evenly divided into ten parts, each split container will have 10 Bitcoins and 1 Ethereum. At this time, if the container is to be combined with another container with a solution of different ingredients (100 Doge), the solution in the new container will represent 10 Bitcoins, 1 Ethereum and 100 Doge. Similarly, this container can continue to be split and combined, and the solution (Value) inside represents the share of this basket of assets.
Once you understand this level, you can feel the magic of ERC-3525. Through its complex data structure and flexible composability, you can create countless complex token structures in the digital world, just like Russian nesting dolls, where you can repeatedly nest multiple layers of assets in a container. This is very suitable for expressing some structured financial assets such as ABS, MBS, etc.
Visualizing Smart Contracts:
The meaning of “ERC-3525 as a visual smart contract” is not difficult to understand. Similarly, if we compare ERC-3525 to a container, it is equivalent to installing a real-time updated display screen on the container, which displays all the information content and changes in the container, such as what ingredients are contained in the solution (what assets and what proportions). The visual feature can make it easier to manage and more transparent.
Although it only realizes the visualization of a smart contract, it looks very simple, but the meaning behind it is not simple. If ERC-3525 technology had been available and widely used before 2008, perhaps the financial crisis would not have happened. This has to start from one of the triggers of the 2008 financial crisis, which was the chaos of financial derivatives. :
After the Internet bubble burst, the United States launched a low-interest loose monetary policy to stimulate the economy, and the low interest rate of loans will lead to more people taking out loans. If you have seen a movie called "The Big Short", you should be impressed by a scene in the movie: a person can get a loan from a bank to buy a house without any collateral and even in the name of his dog. Why can such an outrageous situation happen? Aren't banks afraid that these people will not pay back the money? In fact, banks are not afraid, because there is a financial derivative called MBS.
Mortgage-Backed Securities (MBS) are asset-backed securities that have an income stream derived from a group of mortgage assets, such as residential or commercial mortgages. These loans are packaged by loan providers (such as banks) and sold to special purpose entities (SPEs), which then convert them into securities that can be sold to investors.
This operation essentially packages a group of mortgages into a new financial product and sells it to investors. For banks, this operation can transfer the original loan risk and earn cash by selling these packaged mortgages to earn the spread. Loans rated as high risk, such as loans with no income and no collateral, are called subprime loans. This is why the 2008 financial crisis is called the "subprime mortgage crisis" because the default of many subprime loans led to the collapse of the MBS market.
Since home loans can be packaged into financial assets, other loans (such as student loans, car loans, and credit card loans) can naturally be packaged into financial assets. These assets are usually called asset-backed securities (ABS). The underlying logic of the returns of financial derivatives such as MBS and ABS comes from the interest and principal repaid by the borrowers. These financial derivatives seem to have high returns, attracting a large number of investors to enter, and problems also follow.
Under this model that allows risk to be transferred, banks only focus on increasing the number of loans and ignore the importance of loan quality. Many riskier subprime loans are packaged into ABS and MBS. As ABS and MBS become more popular, financial institutions even begin to create more complex financial derivatives - collateralized debt obligations (CDOs).
If ABS and MBS are financial assets packaged from many loans, then CDO is a financial asset packaged from ABS and MBS, forming a more multi-layered financial product. Packaging assets of different qualities increases the diversity of the investment portfolio, and sets different repayment levels of inferior (higher yield but first bears principal loss in case of default) and senior (lower yield but relatively safer principal in case of default), which can theoretically increase the overall stability of the investment portfolio and obtain a better Sharpe ratio (risk-return ratio).
However, such complex financial products make investors' understanding of their true risks more vague, and the moral hazard of rating agencies further aggravates this problem. In order to attract customers, some rating agencies will rate assets that should be at a higher risk level as low risk, which further increases the risk.
In addition, insurance products such as credit default swaps (CDS) further insured, split, and repackaged different levels of CDO, and mixed CDS and other assets into the new CDO, which was called synthetic CDO. In the end, people were completely confused by the layers of nested financial derivatives and had no idea what assets were supporting them. Many subprime loans were mixed into many financial derivatives rated as low-risk. The distorted ratings made high-risk assets have extremely low premiums, which were packaged and sold to various securities firms and investors. The leverage ratio of the entire financial system was rapidly increasing, and it became increasingly shaky.
As the United States began to raise interest rates, the increase in loan interest caused many lenders to default. This problem was initially most obvious in the subprime loan market. However, as subprime loans were packaged in ABS, MBS and even CDO, the problem quickly spread throughout the financial market. Many seemingly high-grade, low-risk financial derivatives suddenly exposed high default risks, and investors knew nothing about the true risks of these derivatives. Market confidence was severely hit, and a large-scale sell-off occurred in the financial market, which was one of the main triggers of the 2008 financial crisis.
This situation is caused by the disorder, opacity and overly complex structure of the financial market. However, ERC-3525, a visual smart contract, can solve this problem. ERC-3525 can realize the nesting of complex financial derivatives, such as ABS, MBS and CDO. More importantly, its visualization feature allows people to directly see what specific components are included in these complex nested products, which plays an important role in risk control.
In the context of 2008, even the most complex asset securitization products can calculate real-time objective ratings based on the yield-default rate of their underlying assets. This increased transparency, combined with the automatic execution of blockchain smart contracts, improves the security and trust of transactions and prevents the accumulation of systemic risks.
If ERC-3525 had been applied before 2008, every investor and every market participant would have a clear understanding of the specific situation of their investment, and perhaps the crisis of that year would not have occurred. This shows how important the visual smart contract layer of ERC-3525 is to the asset management of real-world assets on the chain (RWA) in the future.
Which ERC-3525 application areas are worth paying attention to in the future?
As a super NFT that can be split and combined, a universal digital container, and has the characteristics of a visual smart contract, the core competitiveness of ERC-3525 lies in its ability to achieve unparalleled flexibility and composability through data structure conversion, as well as extreme transparency and execution convenience brought by visualization functions. This innovative structure gives ERC-3525 huge advantages in some areas, including but not limited to:
Real-World Assets (RWA) on the blockchain:
For the definition of real world assets (RWA), we can simply understand it as all assets outside the blockchain system, including but not limited to securities assets such as currency, stocks, bonds, commodities, funds, as well as non-securities assets such as real estate, artworks and collectibles, agriculture, climate assets, and intangible assets (such as carbon credits and intellectual property rights).
According to Citibank's latest research report "Money, Tokens and Games", it is estimated that by 2030, up to $5 trillion may flow into new forms of digital currency, such as central bank digital currencies (CBDCs) and stablecoins, and about half of these funds may be based on blockchain's distributed ledger technology. This forecast focuses on the continued innovation of laws and technologies, and the tokenization of real-world assets (RWA) is seen as a key driver leading the blockchain industry into a multi-trillion dollar market. In fact, any asset that can be given value, whether it is red wine or financial assets, can be tokenized, using blockchain technology to achieve a significant increase in liquidity and global transactions.
ERC-3525 has significant advantages over real-world security assets. As a universal digital container, ERC-3525 can express almost all types of financial assets in the real world. Through the smart contract visualization function, it can clearly reveal the internal structure of these financial assets, greatly improving its transparency and intuitively reporting risks. Presented.
In addition to traditional financial assets, ERC-3525 also demonstrates a new possibility in supply chain finance. With its unique properties, ERC-3525 can tokenize various assets in the supply chain, including raw materials, production equipment, inventory, accounts receivable, etc. As one of the major narratives of blockchain, we will give a practical application case to illustrate the subversiveness of ERC-3525 in supply chain finance:
In supply chain finance, accounts receivable factoring is a common business model. It allows companies to sell accounts receivable to a third party (usually a factoring company) at a certain discount, thereby obtaining necessary financing and improving their cash flow. However, in the traditional supply chain finance model, this factoring service is usually only available to large companies and some reputable small and medium-sized enterprises, and most small and medium-sized enterprises often find it difficult to enjoy this service.
The root cause of this problem lies in the difficulty of bill falsification. SMEs generally lack sufficient credit support, and investors are unable to conduct reasonable risk control on a large number of SMEs. As a result, SMEs generally face financing difficulties in reality. If SMEs cannot accept delayed payment of accounts, it will be difficult for them to receive orders from large enterprises; but accepting orders from large enterprises will lead to tight liquidity of enterprises and increase the risk of cash flow interruption.
Imagine if we tokenize the payment bill in this scenario. Through ERC-3525, we can create a pair of accounts: a payment account (Payable) and an accounts receivable account (Receivable). A payment channel similar to quantum entanglement is formed between the two accounts. As long as the buyer remits money to the payment account, the funds will be automatically distributed to the accounts receivable account through the smart contract. This means that no matter how many parts the accounts receivable are split into, no matter who ends up with them, they will eventually be transferred to the accounts receivable account according to the predetermined ratio, which greatly increases the liquidity and composability of supply chain financial factoring business.
In traditional supply chain finance factoring business, bill authenticity identification has always been a difficult problem. In Western countries, bills are usually printed by individual companies rather than through a unified channel, which makes it difficult to distinguish the authenticity of bills. At the same time, it is also difficult for banks to use accounts receivable bills as collateral, because each mortgage requires two companies to sign a contract to mortgage the bill income rights, and default also involves the transfer of the payment object. This has greatly hindered most small and medium-sized enterprises from conducting factoring business and financing.
However, the use of blockchain technology can change this situation. Through smart contracts, we can add a confirmation step to the billing process. Once confirmed, the bill will be generated with the confirmation signatures of both parties. This ensures that the bill is generated in a state that has been confirmed by both parties. Considering that the overdue payment is actually equivalent to a form of loan provided by the seller to the buyer, if we can effectively solve the problem of bill authenticity, the seller can rely on the buyer's reputation to sell the receivables to the factoring agency at a certain discount rate, thereby obtaining a discounted amount.
For example, if a seller has accounts receivable with a face value of 1 million yuan, and the factoring agency is willing to purchase the accounts receivable at a 90% discount rate, the seller can immediately obtain a cash flow of 900,000 yuan without waiting for the buyer to pay. This process is essentially to accelerate the flow of cash flow by transferring credit risk, which is made possible by ERC-3525 and blockchain technology.
With the traceability and transparency of the blockchain, the automatic execution and verification of smart contracts, and the execution convenience of ERC-3525, we can see that ERC-3525 is used in the tokenization of traditional financial assets, especially in supply chain finance. It has significant advantages, but in the RWA track, the widespread application of blockchain technology requires the support of sovereign governments, regulated financial institutions and large companies, but this is also in line with the relatively centralized nature of ERC-3525’s technical structure. , and with the continuous updating and improvement of middleware facilities such as oracles, real-world assets on the chain will be a major narrative in the future of ERC-3525, which is worthy of continued attention.
Virtual assets or commodities:
In addition to representing financial assets, ERC-3525 can also be used to represent virtual digital goods or projects, such as virtual land, upgradeable/combinable game items, virtual membership cards, gift cards, lottery tickets, etc. Among them, virtual land, game props and membership cards are areas that deserve more attention. For the existing game props and virtual land system, ERC-3525 has shown higher possibilities and flexibility, and ERC-3525 is backward compatible with the ERC-721 standard, which means that all protocols, platforms and wallets that support the ERC-721 standard will be easier to integrate ERC-3525. In the future, ERC-3525 has the potential to show higher playability in the combination of games and blockchain.
With the launch of Starbucks Odyssey, the combination of customer loyalty programs and Web3 has attracted widespread attention. This can be understood as a points membership card system, and Starbucks has the world's leading customer loyalty program, with tens of millions of active members in the United States alone. It is worth noting that membership cards may become a key scenario for Mass Adoption of Web3, which will help attract a large number of users into the world of Web3.
From the earlier KFC and McDonald’s cases, we can see that the ERC-3525 token standard shows significant advantages in customer loyalty programs. It can realize collection, transfer and deposit operations from ID to ID, and its Value can well represent the points value in the membership card ID. Therefore, ERC-3525 has high potential in this application scenario and may achieve greater potential than other token standards in the future. .
Social, identity and tokenized accounts:
Because ERC-3525 is composable, it can express more data structures, which makes it more advantageous than non-fungible tokens (NFT) to express social graphs using semi-fungible tokens (SFT) in current Web3 social fields, such as protocols like Lens. In addition, using ERC-3525 to implement soul-bound tokens (SBT) can also express more attributes, such as quantifying some specific data in SBT, such as someone's contribution to an event.
In addition, as an account abstraction and digital container, ERC-3525 can itself be regarded as a "wallet". Therefore, in addition to the functions of a normal blockchain wallet, ERC-3525 also leaves room for other more imaginative innovations.
Summarize
As a divisible and combinable super NFT, universal digital asset container, and visual smart contract, the positioning of ERC-3525 is not to solve the problem of value creation, but to solve the problem of value packaging. Digital assets can grow a dynamic, information-rich interface that can be fragmented, merged, packaged, combined and programmed.
ERC-3525 shows significant advantages in the future trend of Web3. Whether it is real world assets (RWA), customer loyalty programs, or gaming, ERC-3525 has significant potential. Especially in the subdivision of real-world assets such as supply chain finance, ERC-3525 has overwhelming advantages over other standards. These development directions deserve our continued attention.
At present, ERC-3525 still faces some challenges and resistance:
1. The high complexity leads to a high cognitive threshold, hindering people’s general understanding and acceptance of ERC-3525.
2. The development difficulty of ERC-3525 is higher than that of ERC-20, ERC-721 and ERC-1155, and it has higher requirements for entrepreneurial teams.
3. The application scenarios of ERC-3525 may involve sovereign governments and centralized guarantee agencies, which belongs to the semi-centralized area. It may conflict with the absolute spirit of decentralization, and its impact on the values of the blockchain world is still unknown.
In any case, it is precisely because ERC-3525 has not yet attracted the attention of the market and has great potential that it deserves our close attention. We expect ERC-3525 to play an important role in the future mass adoption of Web3.
Reference：
[1]https://icg.citi.com/icghome/what-we-think/citigps/insights/money-tokens-and-games
[2]https://eips.ethereum.org/EIPS/eip-3525
[3]https://mp.weixin.qq.com/s/cf8_oDVGBSwXYqEWYmv8uA
[4]https://research.web3caff.com/zh/archives/1996
[5]https://sftlabs.io/2022/09/27/everything-about-fungible-semi-fungible-non-fungible-tokens/
[6]https://www.binance.com/zh-CN/news/top/7221255