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YOUR GUIDE TO ERC-1155: COMPARING ERC-721 TO ERC-1155


Deric Cheng
December 7, 2021


The arrival of new applications on Ethereum has led to development teams
designing new kinds of token standards. In its early years, the ERC-20 token
standard, which defines how a traditional token such as DAI or UNI functions,
dominated the market. This approach to crypto treats all assets as completely
interchangeable (known as fungibility), functioning conceptually like a currency
such as USD.

However, in the past 18 months NFTs have captured the market’s attention, which
rely on a newer standard termed ERC-721. This standard allows for the creation
of one-off, custom tokens: for instance, a collectible trading card, or personal
avatar that is totally unique and can’t be replicated.


Lately, attention in the crypto market has been moving towards another standard,
which has a newly revised set of properties — the ERC-1155 token standard. This
debate of ERC-721 vs. ERC-1155 can perplex teams, and it’s worth knowing when to
employ each. Though ERC-1155 is a newer standard and has some technical benefits
that may give it an edge in the future, it’s not a strict upgrade and differs in
certain ways.


A BRIEF HISTORY OF NFTS

Why has this choice between the two token standards become such a pain point?
After all, many NFT projects today continue to use the ERC-721 standard.

Ethereum’s ecosystem initially had little need for a new token standard. After
all, most were eager to use the highly praised smart contract feature, which set
Ethereum apart in the early days. Creating a blockchain network with an
accompanying ERC-20 token was comparatively easy and resulted in the birth of
numerous new projects, such as Crypto.com and Circle’s USDC.

But the Ethereum ecosystem experienced a seismic shift when developers saw the
potential for other use cases with its smart contract feature. Unlike fungible
tokens which are fully interchangeable and function similar to a dollar bill,
non-fungible tokens that uniquely identified each token allowed for a swathe of
new applications. 

Both token standards have their applications, and it’s worth knowing their
unique properties to help decide which to implement in your project.


WHAT IS THE ERC-721 TOKEN STANDARD?

The ERC-721 token standard kicked off the NFT craze. It was the first of its
kind, and consequently, the most popular standard for creating these unique
tokens. NFTs have a long history, but along with the ERC-721 token standard,
they only truly came to the forefront with the CryptoKitties project. 

Dapper Labs, the company behind CryptoKitties, introduced ERC-721 via an
Ethereum Improvement Proposal (EIP) in 2017. CryptoKitties are a set of
collectible, randomly generated kittens that can be individually traded, similar
to Tamagotchis or Pokemon. Each CryptoKitty is 100% unique - they can’t be
replicated, and they have a transaction history letting the public know exactly
who has owned the kitty over its entire lifespan.


A limited edition CryptoKitty partnering with Operation Jairo to fund sea turtle
conservation.

In addition to being completely, unique, here are some of the additional feature
specifications of ERC-721: 

 * It allows you to transfer NFTs between accounts, allowing NFTs to be traded
   for other currencies.
 * It allows you to identify the total supply of a set of NFTs on the network.
 * It allows you to query for the owners of a specific asset.

Just four years later, NFTs based on ERC-721 have taken over the crypto
ecosystem. Projects range from blockchain ownership of original copies of
digital art sellings in the tens of millions, to unique avatars that have become
a public membership into an exclusive club, to fractional ownership of private
land. 


WHAT IS THE ERC-1155 TOKEN STANDARD?

The ERC-1155 token standard was developed by the team behind the Enjin project,
which focuses on blockchain-based solutions for games. Enjin introduced the
token standard in 2019, and it is a middle ground between the ERC-20 standard
and the ERC-721 standard.

Enjin identified a number of challenges associated with the comparatively
limited ERC-721 standard — in particular, the inability to conduct batch
transfers. 

Unlike ERC-721, if one were to transfer multiple NFTs, each NFT would require a
single transaction — because each NFT is represented by a single smart contract.
This results in exorbitantly high transaction costs when minting or trading
individual NFTs. The ERC-1155 allows batch transfers — multiple assets on a
single smart contract — that result in all tokens being transferred at once
with, leading to a less congested network and consequently lower gas costs. For
example, when a user wants to sell a thousand items in a game to another user,
he or she can use the batch token transfer of ERC-1155 to send them all in one
go 💸. 

Another major feature of this multi-token standard is it supports both fungible
and non-fungible tokens — because of its ability to support multiple states — on
the same address and contract. In practical terms, this means you can make
in-game payments using a fungible token on that address and simultaneously
transfer unique NFT assets as well.

An additional feature of ERC-1155 is that it supports the creation of
semi-fungible tokens. SFTs trade as fungible tokens, but once redeemed, they
convert into NFTs. For example, a ticket to a concert prior to the event may be
considered a fungible asset - any ticket will give you identical GA entry into
the concert. However, after the concert, the ticket loses its tradeable value
and becomes a unique item of memorabilia. SFTs enable that type of functionality
directly into the code of the ticket itself. 

Lastly, token transfers on this standard can be reverted in the event of a
mistake. On the ERC-721 standard, you can’t reclaim assets if they are sent to
the wrong address. However, ERC-1155 contains a function that addresses this.
The safe transfer function and a number of other rules are in place to prevent
exploitation.


A piece of artwork by Beeple, a prominent NFT artist.


ERC-721 VS. ERC-1155

The ERC-1155 token standard could see much more prominent use than the ERC-721
token standard in the near future, thanks to its additional features. Both allow
you to be able to mint new NFTs, but there are some key differences: 

 * ERC-1155 permits the creation of both semi-fungible tokens and non-fungible
   tokens, whereas ERC-721 permits only the latter.
 * In ERC-1155, smart contracts are linked to multiple URIs and do not store
   additional metadata (such as file names). In comparison, ERC-721 only
   supports static metadata stored directly on the smart contract for each token
   ID,, increasing deployment costs and limiting flexibility.
 * ERC-1155’s smart contracts support an infinite number of tokens, whereas
   ERC-721 needs a new smart contract for each type of token.
 * ERC-1155 also allows batch transfers of tokens, which can reduce transaction
   costs and times. With ERC-721, if you want to send multiple tokens, they
   happen individually.


BUILDING TOWARDS THE FUTURE OF NFTS

If you’re looking for additional resources towards learning about NFTs or
building your own, we’ve got you covered! At Alchemy, one of our primary goals
is to help educate blockchain developers on the tooling available in the space,
and to provide resources to help you become a better developer. Here’s a few
tutorials that might help you get started minting your own NFTs: 


> How to Build an NFT

> NFT Minter: How to Create a Full Stack DApp 

> How to View Your NFT in Your Mobile Wallet

Additionally, we’ve just released an NFT API that will help you fetch this
metadata without relying on the limited toolset available to you via web3.js or
ethers.js! Sign up for the waitlist below.


> Alchemy’s NFT API

And finally, we're always available to help 24/7 on our Alchemy Discord. Stop by
and say hi - we'd love to help you on your journey to becoming a full-fledged
blockchain developer!












MORE ARTICLES


The Past, Present, and Future of NFTs
Bud Hennekes
Writer at Alchemy
How to make NFT Art with On-Chain Metadata
Patrick Collins
DevRel at ChainLink
Flavours of On-Chain SVG NFTs on Ethereum
Simon de la Rouviere
Founder at Untitled Frontier
A Guide to Designing Effective NFT Launches
Hasu
Research Collaborator at Paradigm


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