A Proposal To Shake Up Ethereum — A New Standard On The Horizon?

Let’s cut to the chase… There’s a new Ethereum Standard Proposal around the corner that could change the face of Ethereum Smart Contracts forever. In this blog post I’ll give a primer on Ethereum and its smart contracts (and tokens), the current standards that are in place and what the new standard proposal by is and how it will change Ethereum forever. Witek Radomski A Primer Before moving on to more advanced topics, I would like to get the basics and a few terminologies out of the way, in order for everyone to be able to follow this post. — A smart contract is a describing a , enforceable by . Smart Contract set of terms and conditions relationship between two or more parties programmatic code — This is a coded in such way to represent a . Each token has and geared towards its intended use; for example, one token can be created to pay access to a network and another can be created to represent real assets such as equity. Tokens can have either a , or (inflationary, deflationary, etc.). Token smart contract digital asset properties functions fixed supply variable supply — Is a that can be used to create any arbitrary smart contract. These smart contracts are stored on the network, thus making them and . In addition, smart contracts on Ethereum are and . Ethereum platform distributed decentralized immutable tamper-proof — This stands for thereum equest for omments. It is the official protocol for to the network. Usually there is a number attached to ‘ERC’ (i.e. ERC-20) and that is just a unique proposal ID number. ERC E R C proposing improvements Ethereum Fungibility — The property of a good or a commodity whose individual units are essentially interchangeable. What is ? ERC-20 ERC-20 is a standard interface for tokens which was proposed by and in November, 2015. This standard Vitalik Buterin Fabian Vogelsteller “allows any tokens on Ethereum to be re-used by other applications: from wallets to decentralized exchanges.” In order for a token to be and allow seamless interaction with other smart contracts and decentralized applications (dApps), they need to support the following functionality: ERC-20 compliant Retrieve the total amount of tokens that will ever exist also known as the total token supply Retrieve the number of tokens a certain Ethereum address holds Transfer tokens between two parties Approve the use of the token as a monetary asset is geared towards representing . A is not unique and is with another . The importance of will come into play later in the post. ERC-20 Fungible Tokens fungible token interchangeable identical token fungibility An example of an ERC-20 token is the ( ). For gamers, it is a common currency between multiple ENJ-implemented games. It will also provide portability and transferability of virtual goods and digital assets. You can find more information about ENJ, in one of my previous blog posts, . Enjin Coin ENJ here What is ? ERC-721 is standard interface for on- ungible okens ( ) and was proposed by in September, 2017. The proposal was accepted as an official ERC-721 interface in March, 2018. ERC-721 N F T NFT Dieter Shirley are and each can be from each other. They can represent over digital or physical assets. can represent a diverse universe of assets, including: NFTs unique in nature uniquely identified ownership NFTs — houses, unique artwork Physical property — unique pictures of kittens, collectable cards Virtual collectables — loans, burdens and other responsibilities “Negative value” assets In general, all houses are distinct and no two kittens are alike. are and you . NFTs distinguishable must track the ownership of each one separately The motivation behind was the fact that is for because each asset is distinct (non-fungible) whereas each of a quantity of tokens is identical (fungible). ERC-721 ERC-20 insufficient tracking NFTs An existing example of such ERC-721 NFT are the ‘Kitties’ in the hugely popular CryptoKitties game. Each CryptoKitty is unique in nature and uniquely identified. No two CryptoKitties can ever be the same. What is ? ERC-1155 ERC-1155 is a standard interface for multiple item/token definitions in a proposed by ( Co-Founder & CTO) in June 2018. Witek created the code for the first non-fungible token in June 2017, which inspired the creation of ERC-721. single deployed contract Witek Radomski Enjin The main motivation behind the proposal, was the fact that and require a to be deployed for each fungible or NFT token/collection. As you can imagine, this is highly inefficient and ERC-1155 ERC-20 ERC-721 separate contract “limits certain functionality by the nature of separating each token contract into its own permissioned address”. The comes with a host of advantages over ERC-20 and ERC-721, including: ERC-1155 proposal — As mentioned above, and require a to be deployed for each and this causes a massive amount of repetitious code thus ‘polluting’ the Ethereum blockchain. proposes that the ‘common’ code across tokens is stored in a and given a . This unique identifier can then be by other smart contracts which require the central smart contract’s code. This basically provides the ability for smart contracts to code from a central smart contract without the need to copy, thus saving storage space, processing power and electricity. Modular Plug & Play Contracts ERC-20 ERC-721 separate contract ERC-1155 central smart contract unique identifier referenced ‘re-use’ — An . Using the current standards, if Alice wanted to exchange Token A and Token B with Bob for Token C and Token B, that would require a minimum of (Figure A). ERC-1155 solves this inefficiency by together, regardless of have many tokens need to be swapped, and bundles everything together in a (Figure B). Atomic Swaps of Bundled Tokens Atomic swap “is a smart contract technology that enables exchange of one cryptocurrency for another without using centralized intermediaries, such as exchanges” four separate steps grouping multiple tokens two-step process Figure A Figure B — ERC-1155 will allow you to perform multiple complex operations in a single transaction which will make the transaction ‘lighter’ and cheaper (Figure C). Multiple Complex Operations in One Figure C — I have already talked about how ERC-20 caters for fungible tokens and how ERC-721 caters for non-fungible ones. “ Fungibility Singularity With ERC-1155, developers will now have increased power of choice, as each token can be either mass-produced or created singularly and either contain unique metadata or be fully fungible”. How can ERC-1155 be used in reality? As an ode to the team (and their CTO who proposed ERC-1155) I will be using games to present an example. Games have become highly sophisticated… Characters have different skins, can load different weapons, use different potions, etc. Enjin I will be using World of Warcraft as a case study and put points across as if it were to launch on the Ethereum blockchain. At the time of writing, World of Warcraft has a mind-boggling 109,429 items! Some of these items are and some are . For example, a is (with a limited number in existence) whereas an is not. Taking current standards, each would need to be represented using an and an would be represented with an . uniquely identifiable not Chromatic Sword uniquely identifiable Ancient Healing Potion Chromatic Sword ERC-721 token Ancient Healing Potion ERC-20 token Unfortunately, these two token types don’t play very well together. Additionally, the standard would require each and every one of the non-fungible items, to have a . More often than not, the code powering these items would look with some minor alterations, however, the current standards for . In essence, these would need to be on the blockchain, polluting it with duplicate code. For example, if 100 existed, each and every one of them would require a ERC-721 token. ERC-721 separate contract almost identical don’t cater code re-use individually stored Chromatic Swords separate With you can have the ; a (I’ll take credit for this catchphrase). Depending on the game mechanics, you could create thousands of different item types; some of them being uniquely identifiable whilst others being fungible. You could represent unique and fungible with the same standard. ERC-1155 best of both worlds Fungibility Singularity Chromatic Swords Ancient Healing Potions Going a step further, ERC-1155 could treat NFTs in a group, thus retaining some fungibility. For example, you would be able to tell that your token is a with a unique identifier of it being the . Chromatic Sword first that was ever created Finally, trading between two parties can now contain a basket of fungible and non-fungible items. For example, Alice could trade her and for Bob’s and , in a single transaction. Chromatic Sword 10 Ancient Healing Potions Poseidus 5 Astral Mana Potions Conclusion To conclude, I firmly believe the ERC-1155 proposal is a step in the right direction. ERC-20 and ERC-721 have served the Ethereum network well, however, ERC-1155 will take us to a whole new level giving the ability to developers to represent their fungible and non-fungible tokens under a single standard whilst also making transactions cheaper and lighter. Make sure you give this post your 👏 👏 and my blog a if you enjoyed this post and want to see more. 50 claps follow You can also show your support by donating to the following address: : ETH/ENJ 0x4c7195E074cf0Ab6F77Bdb7C97Fd2567066Bb712 . Disclaimer: All information and data on this blog post is for informational purposes only. My opinions are my own. I do not provide personal investment advice and I am not a qualified licensed investment advisor I make no representations as to the accuracy, completeness, suitability, or validity, of any information. I will not be liable for any errors, omissions, or any losses, or damages arising from its display or use. 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