The introduction of ERC-6551 has brought about a revolutionary transformation in the world of NFTs. With ERC-6551, NFTs have evolved far beyond being simple JPEG images, now encompassing the concept of a valuable ‘smart wallet.’ So, what is ERC-6551, and how is it different from regular NFTs? Read more in the following article.
Article Summary
- ✨ ERC-6551 is the latest Ethereum ecosystem innovation that introduces the Token Bound Accounts (TBA) concept. Token Bound Accounts are smart contract wallets that are linked to specific NFTs.
- 💰 ERC-6551 allows NFTs to have their wallet. In other words, the NFT acts as a wallet with its own address.
- 🪄 With TBA, you can store any asset in any NFT you own. For example, you can keep ETH or even NFT BAYC in your Azuki NFT.
- 🖼️ TBA is compatible with ERC-721 and ERC-1155 standards, meaning ERC-6551 can be built on top of NFTs without undergoing fundamental changes or wrapping ERC-721 and ERC-1155 NFTs first.
What is ERC-6551?
ERC-6551 is the latest Ethereum ecosystem innovation that introduces the Token Bound Accounts (TBA) concept. Token Bound Accounts are smart contract accounts (wallets) that are linked to a specific NFT. These accounts can do everything a regular wallet can and are compatible with every NFT you own. In other words, TBAs are smart contract wallets.
ERC-6551 is a new token standard that allows NFTs to have their wallet. In other words, the NFT acts as a wallet with its own address.
Currently, many individuals utilize wallets such as Metamask to hold their NFTs. However, with the introduction of TBA, a whole new level of functionality emerges. TBA enables users to store various assets within any NFT they possess. For example, you can store ETH, traits, or even BAYC NFTs in your Azuki NFT.
Simply put, TBA allows highly personalized use cases and interactions with dApps. Your NFT will not be a static JPEG whose value comes from speculation. NFTs will become more valuable depending on your stored assets and past interaction history.
Difference between ERC-721 and ERC-6551
ERC-721 has been widely adopted as the standard for creating NFT tokens, particularly for collectibles. However, it does have certain limitations, notably its inability to interact with smart contracts or decentralized applications (dApps).
To address these limitations, the ERC-6551 development team has introduced a solution that aims to overcome the drawbacks of ERC-721. ERC-6551 NFTs take the form of smart contract wallets, empowering them to perform various functions. They have the capability to sign transactions, store assets, and seamlessly interact with other dApps as NFTs.
By embodying greater flexibility and acting as independent entities, ERC-6551 NFTs successfully overcome the interaction barriers faced by ERC-721. As a result, they are now able to actively participate in the dynamic blockchain ecosystem.
Who Created ERC-6551?
ERC-6551 is the product of Future Primitive. Future Primitive is a Web3 development studio comprised of people who have worked at several Web3 companies. Future Primitive is led by one of the founding team members of CryptoKitties and Dapper Labs (NBA Top Shot), Benny Giang.
How Does ERC-6551 Work?
ERC-6551 introduces the concept of Token Bound Account (TBA). A TBA is a smart contract wallet linked to a specific NFT. It allows NFTs to own assets and interact with applications, making them more dynamic and interactive.
ERC-6551 works by utilizing a registry and smart contract wallets. A smart contract wallet is a smart contract that can accept NFTs, ERC-20 tokens and also execute transactions. This smart contract wallet has its address (like all smart contracts).
To better understand a registry, you can think of it as a single smart contract that stores info.
ERC-6551 registry contains info stating what NFTs are compliant with the smart contract wallet. Everyone can create a Token Bound Account (TBA) for any ERC-721 token by calling a function on the registry and paying a small fee. After that, the registry will send a proxy contract that serves as the TBA for the token.
ERC-6551 allows NFTs to have a wallet using a registry and smart contract wallet. The registry creates contract wallets and directs each wallet to an NFT. Contract wallets can store other assets. Only NFT owners can execute transactions on these wallets.
TBA is compatible with ERC-721 and ERC-1155, meaning ERC-6551 can be built on top of NFTs without fundamental changes or wrapping ERC-721 and ERC-1155 NFTs in advance.
Use Cases of ERC-6551
NFT Compatibility
By using Token Bound Accounts (TBA), you can combine your NFTs with other related assets (NFTs, tokens, traits, etc) into a single profile. It eases you to manage and transfer assets across multiple platforms.
Before the creation of TBA, all the NFT assets you collect, for example, in a game, would be stored as separate tokens in your wallet.
Now, thanks to TBA, you can have an inventory that allows assets related to a particular game to be transferred into your wallet. It provides a better user experience.
When you sell or transfer an NFT, all the assets in it will also be automatically transferred.
On-chain Identity
Currently, your wallet represents your digital identity. With TBA, each of your NFTs has its own identity.
In other words, your NFT can interact with dApps independently without relying on the wallet that holds it. It can have an impact on the value of your NFT.
Some examples of systems that can utilize TBA include token airdrops, loyalty programs, and in-game rewards. In the future, it could also enable the adoption of loan rating systems that could improve the efficiency of lending protocols.
Provenance
NFTs (currently) do not provide a complete picture of transaction history or asset utility other than proof of ownership. However, with TBA, it stores all of these data. It is especially useful for collectible NFTs. It allows NFT buyers to verify the complete origin of the NFT.
Interaction with dApps
With ERC-6551, NFTs can interact with other dApps. Your NFTs become more valuable and can change in appearance. It is different from traditional NFTs which were simply certificates of ownership. Nothing more.
ERC-6551 Implementation Example
Future Primitive implemented ERC-6551 in the Sapienz NFT, a project of the dynamic NFT PFP Stapleverse.
Sapienz can customize apparel and other items. Instead of the items being in the user’s wallet, they are in the Sapienz wallet (NFT) itself.
Conclusion
ERC-6551 solves some of the problems inherent in ERC-721 NFTs by adding a wallet to NFTs. This allows it to store the assets needed to make NFTs a digital identity, gaming component, or collectible.
While ERC-6551 has the potential to be a significant innovation in the NFT world, some protocols may need to adapt to the ERC-6551 standard to utilize all of its advantages.
This adaptation process may require time and effort from developers and communities looking to integrate the new features of ERC-6551 into their applications and projects.
Referensi
- Future Primitive, Introduction to Tokenbound, Tokenbound, accessed 18 Juli 2023.
- Zakai Mill, ERC-6551: A new groundbreaking standard for NFTs, Twitter, accessed 18 Juli 2023.
- Benny Giang, A thread on ERC6551 (the next innovation for NFTs), Twitter, accessed 18 Juli 2023.
- Cygaar, Explanation of how ERC6551 will enable all NFTs to own any type of asset, Twitter, accessed 18 Juli 2023.
- Antier Team, A Definitive Guide to ERC-6551 Token Standard, Antier, accessed 18 Juli 2023.
- M. Musharraf, Mrig P, dan Juan Leal, What is ERC-6551? Token Bound Accounts Explained, Thirdweb, accessed 18 Juli 2023.