What is ERC-1155?
An ERC-1155 is a standard token that falls in the ERC category. It is a semi-fungible token standard on the Ethereum blockchain, allowing for the creation of tokens that can represent both fungible and non-fungible assets within a single smart contract.
What does ERC stand for?
Great question! Before we get into ERC, let us first understand a super important concept in the Ethereum network known as the Ethereum Improvement Proposal (EIP).
Ethereum Improvement Proposal (EIP)
EIP is a formal document that can also be considered a proper channel or means for users associated with the Ethereum community to propose a change that they deem beneficial for the network as a whole.
There is no strict eligibility criterion for partaking in the EIP. However, there are certain standards that must be met in order for a proposal to be accepted and voted on.
Thus, ERC, Ethereum Request for Comments, is an example of EIP that got accepted in the wake of the voting within the Ethereum community and is majorly focused on token standards.
When was EIP introduced?
The concept of this phenomenon was introduced shortly after the launch of the blockchain itself in the year 2015. Needless to say, it was very much inspired by the Bitcoin Improvement Proposals (BIP).
As of March 2023, there are over 400 EIPs within the Ethereum network. The phenomenon got entrenched and ingrained within the ecosystem after November 2015. It allows community members to propose and discuss changes in a transparent manner and holistically.
How is the EIP different from staking?
This is yet again an absolutely amazing question! You’re definitely a keen learner.
So, staking is basically how transactions are validated within the Ethereum network or any network that follows a Proof of Stake (PoS) as a consensus mechanism. What happens in staking is, as the name suggests, you stake some Eth coins and become sort of an investor in the blockchain.
This process, thus, allows you to validate the transactions, add to the overall security and integrity of the blockchain, and have some say in the decision-making process of the network.
While staking does allow you to partake in some decisions within the blockchain, those decisions are majorly focused on the security and integrity of the network.
EIP, on the other hand, is majorly focused on proposing and implementing changes.
Both are important components and contribute significantly to the network but they are both different as they serve different purposes.
Okay, how many ERC tokens are there?
As of today, there are hundreds of ERC tokens. However, the most popular and the most used ones happen to be; ERC-20, ERC-721, and ERC-1155.
Now, there are three types of tokens – fungible, non-fungible, and semi-fungible.
In the simplest of words, fungible tokens are those that can be replicated, non-fungible are those that can not be replicated and semi-fungible are those tokens that fall in between fungible and non-fungible.
Let’s now characterize all three ERC tokens.
Of all three widely used tokens, ERC-20 is fungible, ERC-721 is non-fungible and ERC-1155 is semi-fungible.
Why was there a need for a third ERC token type?
If you have been following the mighty giant that Ethereum has become in the wake of the events like flippening and the merge, you would know that ERC-20 and ERC-721 are amongst the first of the trio.
ERC-20 was the first one to be released. It was launched in 2015 by Fabian Vogelsteller and ERC-721 was proposed in 2017 by William Entriken, Dieter Shirley, Jacob Evans, and Nastassia Sachs.
The final of the trio – ERC-1155 was introduced in 2018 by a blockchain gaming company known as Enjin.
The need for a third token type was realized by the gaming industry as tokens gaming are a big phenomenon and are frequently traded.
What are the limitations of ERC-20 and ERC-721?
Succinctly put, the major problem or limitation of the ERC-20 and ERC-721 tokens was that ERC-20, being a fungible token and ERC-721, being a non-fungible token performed different tasks and at times, entailing a lot of redundancy.
In simpler words, well-built multiplayer online games have tons of assets (big and small) which include swords, characters, attires, etc. Some of them may be fungible tokens while some of them can be supported by NFTs.
Read more about the differences between ERC-20 and ERC-721 here:
The biggest limitation of the ERC-20 and ERC-721 would be that they do not involve a common ground or a common channel to get access to both types of tokens. Both have different functions with barely any overlap between them.
What pain point is addressed by the ERC-1155 token?
So, before the launch of ERC-1155, each gaming-related item required its own smart contract. This meant hell lots of redundancy. Many smart contracts also required management. The lack of a common platform to acquire these tokens was the need of the hour.
ERC-1155 solved this massive barrier in the trading of tokens related to gaming. Today using the ERC-1155 token, multiple items can be added and stored within a single smart contract. In terms of trading, various items can be traded in a single transaction.
A real-life example of how the ERC-1155 is used
Let’s say we’re building a fantasy RPG game where players can collect different types of weapons and potions. Weapons are non-fungible, while potions are fungible.
First, we define our ERC-1155 contract with two token types: “Weapons” (non-fungible) and “Potions” (fungible). Each weapon and potion is assigned a unique ID.
Next, we create a mapping that links each weapon ID to its properties (e.g. damage, rarity, name) and another mapping that links each potion ID to its properties (e.g. health restored, duration, name).
When a player acquires a new weapon, the contract creates a new non-fungible token with a unique ID and assigns it to the player’s address. When a player acquires a potion, the contract simply updates the player’s balance of that particular potion ID.
If a player wants to transfer a weapon or potion to another player, they call the transfer function in the ERC-1155 contract and specify the token ID, recipient address, and quantity (if applicable). The contract then updates the balances of the sender and recipient accordingly, depending on whether the token is fungible or non-fungible.
By using the ERC-1155 standard, we can create a flexible game economy that allows players to collect and trade both unique, non-fungible weapons and fungible potions, all stored in a single smart contract.
Features of ERC-1155?
- Semi-fungibility: This function ensures that ERC-1155 can include both fungible and non-fungible assets. Thus, both types of tokens are represented under its umbrella. This also makes ERC-1155 interoperable in nature.
- Supply management: One of the most amazing features of the token is that because it is interoperable in nature, it can have both fixed and variable supply. For example, fungible tokens can have a variable supply but non-fungible tokens can only have a fixed supply.
- Customization: The ERC-1155 standard allows for the creation of tokens with customizable metadata, including attributes, properties, and images.
- Efficiency: Compared to the other two popular ERC tokens, ERC-1155 is more efficient because, with just a single transaction, multiple tokens can be traded.
Use cases of ERC-1155
- Gaming: One of the biggest use cases of the token which is also like an inspiration for the creation of the token as a whole is gaming. Trading both fungible and non-fungible tokens using this semi-fungible token is very much possible. Axie Infinity and Gods Unchained are two good examples.
2. Digital collectibles: These tokens can also be used to create digital collectibles which include cards, artwork, etc. This is where the customization of the token comes into play. With ERC-1155, your token can have different attributes and unique properties. Examples include CryptoKitties and SuperRare.
3. Reward Points: ERC-1155 tokens can be used to create loyalty and reward programs, where tokens can be earned and exchanged for goods or services. Examples include Enjin, the game that came up with the idea of ERC-1155.
In conclusion, ERC-1155 was created to bridge a huge gap between ERC tokens and it has been able to revolutionize ERC tokens to a great extent.