Author: bayemon.eth, Grapefruit, ChainCatcher
On June 25, the EthGlobal Waterloo hackathon officially ended, with a total of 11 projects entering the finals, covering multiple fields such as NFT, infrastructure, AI, and payment. It is worth noting that among the 11 selected projects, 4 projects are based on the latest token standard ERC-6551, such as the decentralized media network platform AquaNet, which supports users to use their NFTs as their own accounts, and the auction platform Fukuro, which supports NFTs bundled with ERC20 or other NFTs for buying and selling.
These are also the first real projects that users have seen since the ERC-6551 concept was proposed, and they have quickly attracted intensive attention from the crypto community.
ERC-6551 is a new token standard released by the Future Primitive team on May 23. It will support NFT to create Token Bound Accounts (TBA), that is, NFT can be used as a wallet address or an on-chain account, truly making NFT a wallet.
This will open a new door for ERC721 NFT, because currently NFT is just a static asset stored in the wallet, which means it cannot interact with other DApps, nor can it be used as a true on-chain identity representative. The current user's on-chain identity is still the wallet address. ERC-6551 will support the current ERC721 NFT to create a smart contract wallet account, and use NFT as its on-chain identity wallet account. The NFT account can contain multiple wallet addresses, held NFTs and ERC20 tokens, etc., making NFT a true on-chain identity account representative.
This article will focus on the characteristics of ERC-6551, its implementation principles, and the differences from ERC-721, and explore what new possibilities ERC-6551 will bring to the NFT track.
What is ERC-6551?
ERC-6551 Concept
In the past, NFT could only be a small picture lying in the user's wallet, and it seemed to have no other use except for viewing. The emergence of ERC-6551 may open up a new situation for it. In addition to being a picture asset, it also has other functions such as being an on-chain account, and NFTs can be bundled and packaged for sale, making it more composable, dynamic and interactive, making NFT assets completely "alive".
How to understand ERC-6551? Simply put, it is to use a string of fresh codes (ERC-6551) to create a wallet for NFT, and NFT is this wallet account.
If we apply the setting of Chinese Paladin to NFT, and assume that Li Xiaoyao is a creation NFT under the ERC-721 standard, then the money he earned from fighting in the big world, the achievements he gained from the plot, the peach wood sword in his backpack, and even the "social relationships" he formed with Zhao Linger, Lin Yueru and others do not actually belong to this "Li Xiaoyao" himself, but are scattered as separate NFTs in the wallets of players who purchased the stand-alone game. ERC-6551 binds a wallet account that belongs only to Li Xiaoyao, and all the assets, reputation and even social relationships attached to him, as well as the subsequent inheritance and continuation, will appear in this NFT account in the form of an archive of "past memories" when written on the chain, rather than only the operations performed by players who purchased the game under the ERC-721 standard.
ERC-6551 Source
So why did the Future Primitive team introduce a new development standard, ERC-6551, when ERC-721 already exists and has been widely adopted? Is it really necessary to go to so much trouble just to give NFT the so-called "autonomy"? This is mainly because the current ERC-721 still has loopholes.
As we all know, ERC-721 has long been widely adopted in the NFT field, and NFTs created based on it occupy a large share of the cryptocurrency ecosystem. However, the standard still has obvious defects. Currently, NFTs created based on ERC-721 are still just static assets. In addition to being able to circulate between accounts as a "token", it seems that there is no NFT that can create its own story as a representative of the on-chain or Web3 identity.
There is no transaction history to trace and on-chain signatures cannot be performed, which means that tokens minted under the ERC-721 standard cannot interact with other smart contracts and DApps like wallets, cannot own other assets, and can only exist as picture "mascots".
In fact, in order to make ERC-721 a true on-chain identity representative, developers in the Ethereum community have also put forward endless proposals over the years and defined various ways to extend the ERC-721 standard.
ERC-721 Proposal on Asset Ownership Tokens
Although there have been proposals to allow ERC-721 to have the ability to own assets, rather than just a "small picture" lying in the fox wallet, the biggest problem with these proposals is that they are not compatible with ERC-721. This means that most NFTs currently circulating in the market require developers to modify the code a lot if they want to become "wallets."
Therefore, in order to grant ERC-721 assets more functions while ensuring compatibility with all previously deployed ERC-721s, Future Primitive released the ERC-6551 standard. A member of the team, @BennyGiang, was also an early project member of Dapper Labs/CryptoKitties.
The ERC-6551 standard is inspired by Soul Bound Tokens (SBT), which transforms the "small pictures" in the wallet into the wallet itself, creating Token Bound Accounts (TBA) for NFT, allowing NFT to interact directly on the chain, record transaction history, and hold assets on the chain. The token-bound account belongs to the NFT owner and authorizes the owner to directly initiate on-chain interaction operations.
For example, Xiao Ming usually stores Azuki in his wallet after purchasing it. Now, through ERC-6551, he can create a smart contract account (TBA) for it. NFT is the identity of this account. Under this account system, other NFTs, encrypted tokens, POAP identity certificates, etc. can also be held, that is, NFT is a wallet. As a "wallet", TBA can interact with other DApps, etc.
Standing on the shoulders of giants, ERC-6551 converts NFT into a wallet, expanding the originally extremely flat assets into a "living organism" that seems to be truly liquid, becoming an overall proof of ownership and transactions.
ERC-6551 Features
As mentioned above, in order to realize more functions of NFT, ERC-6551 needs to have characteristics such as compatibility, composability and transaction traceability.
compatibility
In order to improve the versatility, interoperability and scalability of applications, while reducing development and deployment costs. As the Ethereum ecosystem emphasizes "compatibility" day after day, ERC-6551, as an extension of ERC-721, the OG status standard in the NFT field, naturally engraves the word "compatibility" in the DNA of the new standard. For developers, compatibility means that there is no need to modify the current ERC-721 and the smart contract after the wrapper at the code level; for holders, there is no need to perform any additional operations on the NFTs already in the wallet.
Composability and traceability
In addition to "compatibility", smart contract standardization and composability have become mainstream trends. The composability of the ERC-6551 standard is mainly that it allows all assets bound to tokens to be operated in the same place, providing DAPP with easier and more flexible asset management and bundling. For example, after OpenSea confirms that ERC-6551 can be used one day in the future, artists can package and sell a series of NFTs on OpenSea.
In addition, ERC-6551 supports allowing NFTs to interact directly on the chain and record transaction history. This transaction history may provide a traceable transaction path proof for NFT royalties that were previously difficult to track, thereby spawning more feasible solutions for royalty division.
What are the application scenarios of ERC-6551?
Even though ERC-6551 has only been proposed for more than a month, it has already set off a frenzy of discussion in the community. To some extent, ERC-6551 has created an NFT wallet with the ability to "evolve" and is infinitely close to reality. It can solve the rigid curse of "pre-programming" in the gaming industry, fit the affiliation in the real world and even simulate interpersonal communication. Therefore, many excellent use cases based on ERC-6551 have emerged in the fields of games and digital signatures.
Parallel Colony: NFT as a game player account
Parallel Colony is a narrative game that combines artificial intelligence, ERC-6551, and a life similar to The Sims. The protagonist of the game, Parallel Avatar AI, starts his life with a few dollars in his pocket (the currency in the game is ERC-20 PRIME), a chip, and a rifle.
Among them, the virtual character Avatar AI NFT uses ERC-6551 technology, that is, the NFT serves as its own game account, and all items purchased in the game belong to the wallet bound to the NFT. Avatar AI will decide with the players how to dispose of the assets in the wallet.
Tokenbound Titans: NFT-based “cultivation” game
Tokenbound Titans is an NPC game developed by HomeDAO in ETH Waterloo 2023. It uses the ERC-6551 standard to combine the NPC game mode with dynamically generated NFTs. Players are the owners of NFTs, and each NFT is bound to a character with different abilities and characteristics.
The core gameplay is that the character obtains token rewards through battles, and spends money to max out attributes such as attack, speed, defense, and health. As the level increases, new moves, combos, and other skills can be unlocked.
The original NFT blockchain game model seemed more like an arrangement of code blocks, which was not friendly to players who loved "development" games. The emergence of ERC-6551 completely changed the way blockchain games and NFTs were integrated, that is, character NFTs could continue to evolve and grow during the game and respond to the player's choices in a real way.
Web3 digital fashion company StapleVerse: Launching NFT signed hats using ERC-6551
Stapleverse launched a limited edition baseball cap in collaboration with @9dccxyz on June 21. Unlike other limited edition signatures, the signature on the baseball cap is electronic. It is precisely because of the launch of ERC-6551 that NFTs are given the right to hold other NFTs. In the collaboration between Stapleverse and @9dccxyz, the "hat" NFT becomes the holder of the "signature" NFT. If the holder of the "hat" NFT subsequently trades, the "signature" will also be traded to the buyer's wallet as an additional asset of the "hat". From this point of view, ERC-6551 can be seen as a means of abstracting and realizing certain "subordinate relationships" in the real world on NFTs.