A new Ethereum token standard called the ERC998 has been proposed by Matt Lockyer.
ERC20 tokens are the most widely used Ethereum tokens. These tokens are fungible, meaning that each token is uniform and of the same value.
ERC721 tokens are non-fungible tokens: each token is unique and can therefore be priced independently. Therefore, unique digital assets, such as a cat on the game CryptoKitties, can be stored on such a token.
ERC998 tokens are similar to ERC721 tokens in that they are both non-fungible. ERC998 tokens are also ‘composable’, which means that assets within the token can be composed or organized into complex positions and traded using a single transfer of ownership.
Since the ERC998 token can own a own unique set of digital assets, it can be thought of as a portfolio of assets or as a holding company for diverse assets.
Hypothetical Use Cases
The ERC998 token standard will enable a series of new use cases. As a simple example, a phone and prepaid units of talk time could be bundled together into an ERC998 token.
To take a more complex hypothetical use case, the ownership rights to a spacecraft could be represented by an ERC721 token. Rocket fuel required to cover 100 round trips between two destinations could be represented by another token. Insurance and servicing contracts could be held in a third token. These three token assets could then be owned by a single ERC998 token, which could be auctioned to space travel companies.
The ERC998 token is a valuable addition to the existing standards, and will enable a whole new range of use cases.