{"id":6199,"date":"2023-07-08T15:37:23","date_gmt":"2023-07-08T15:37:23","guid":{"rendered":"https:\/\/metaschool.so\/articles\/?p=6199"},"modified":"2023-08-31T10:13:07","modified_gmt":"2023-08-31T10:13:07","slug":"erc-6960-token-standard-polytrade","status":"publish","type":"post","link":"https:\/\/metaschool.so\/articles\/erc-6960-token-standard-polytrade\/","title":{"rendered":"There&#8217;s a new token standard in town: ERC-6960"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_56_1 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/metaschool.so\/articles\/erc-6960-token-standard-polytrade\/#BUT_WHY\" title=\"BUT WHY!?\">BUT WHY!?<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/metaschool.so\/articles\/erc-6960-token-standard-polytrade\/#The_trio\" title=\"The trio\">The trio<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/metaschool.so\/articles\/erc-6960-token-standard-polytrade\/#The_fault_in_the_standards_ERC-20_ERC-721_together\" title=\"The fault in the standards: ERC-20 &amp; ERC-721, together\">The fault in the standards: ERC-20 &amp; ERC-721, together<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/metaschool.so\/articles\/erc-6960-token-standard-polytrade\/#The_solution%E2%80%A6_almost_ERC-1155\" title=\"The solution\u2026 almost: ERC-1155\">The solution\u2026 almost: ERC-1155<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/metaschool.so\/articles\/erc-6960-token-standard-polytrade\/#The_extension_of_the_almost_solution_ERC-6960\" title=\"The extension of the (almost) solution: ERC-6960\">The extension of the (almost) solution: ERC-6960<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/metaschool.so\/articles\/erc-6960-token-standard-polytrade\/#What_do_the_token_writers_say\" title=\"What do the token writers say?\">What do the token writers say?<\/a><\/li><\/ul><\/nav><\/div>\n\n<p>As recently as 2023, a DeFi fin-tech revolutionist, Polytrade, authored something groundbreaking. On April 30, the project details were officially posted on <a href=\"https:\/\/ethereum-magicians.org\/t\/eip-6960-dual-layer-token\/14070\" target=\"_blank\" rel=\"noopener\">Ethereum\u2019s website<\/a>. Moreover, Polytrade\u2019s <a href=\"https:\/\/twitter.com\/Polytrade_fin\/status\/1668823074077315072?s=20\" target=\"_blank\" rel=\"noopener\">Twitter<\/a> reposted the story on June 14, making it official.<\/p>\n\n\n\n<p>So, what exactly is this project? It is a new ERC token standard available to the Ethereum ERC-verse now. And everyone&#8217;s calling it ERC-6960.<\/p>\n\n\n\n<p>The dual-layer token (DLT) standard is designed to address the drawbacks and shortcomings of the <a href=\"https:\/\/metaschool.so\/articles\/erc-1155-meaning\/\">ERC-1155 token standard<\/a>. It is also aimed at improving ERC token classification and management.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"but-why\"><span class=\"ez-toc-section\" id=\"BUT_WHY\"><\/span>BUT WHY!?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Exactly! But why? There are already tons of <a href=\"https:\/\/metaschool.so\/courses\/creating-nfts-using-different-token-standards\" target=\"_blank\" rel=\"noreferrer noopener\">Ethereum token standards<\/a> in the market. Why another token standard? In order to understand the reason\/s for developing the ERC-6960 token, we will have to understand how the three popular ERC tokens work and what is so special about them.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"the-trio\"><span class=\"ez-toc-section\" id=\"The_trio\"><\/span>The trio<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In ERC tokens, there is a group of three popular tokens that consist of <a href=\"https:\/\/metaschool.so\/articles\/erc20-token\/\">ERC-20<\/a>, <a href=\"https:\/\/metaschool.so\/articles\/erc-721-tokens\/\">ERC-721<\/a>, and ERC-1155 (the latest of all three). ERC-20 is a token standard that was created for <a href=\"https:\/\/metaschool.so\/articles\/fungible-token-meaning\/\">fungible<\/a> assets and ERC-721 is a token standard designed for non-fungible assets.<\/p>\n\n\n\n<p>Then followed ERC-1155, a semi-fungible&nbsp;token standard on the Ethereum blockchain, which allowed the <a href=\"https:\/\/metaschool.so\/courses\/create-erc20-token-on-starknet-in-cairo-language\" target=\"_blank\" rel=\"noreferrer noopener\">creation of tokens<\/a> that can represent both fungible and&nbsp;<a href=\"https:\/\/metaschool.so\/articles\/what-are-nfts\/\">non-fungible&nbsp;assets<\/a> within a single&nbsp;smart contract.<\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-fixed-layout\"><thead><tr><th>Features<\/th><th><strong>ERC-1155<\/strong><\/th><th><strong>ERC-721<\/strong><\/th><th><strong>ERC-20<\/strong><\/th><\/tr><\/thead><tbody><tr><td>Fungible tokens<\/td><td>Yes<\/td><td>No<\/td><td>Yes<\/td><\/tr><tr><td>Non-fungible tokens<\/td><td>Yes<\/td><td>Yes<\/td><td>No<\/td><\/tr><tr><td>Batch transfers<\/td><td>Yes&nbsp;<\/td><td>No<\/td><td>No<\/td><\/tr><tr><td>Unlimited token types<\/td><td>Yes<\/td><td>No<\/td><td>No<\/td><\/tr><tr><td>Smart contract size<\/td><td>Smaller<\/td><td>Larger<\/td><td>Larger<\/td><\/tr><tr><td>Gas costs<\/td><td>Lower<\/td><td>Higher<\/td><td>Higher<\/td><\/tr><tr><td>Use cases<\/td><td>Games, digital collectibles, metaverse<\/td><td>Digital collectibles, art, gaming<\/td><td>DeFi, payments, gaming<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"the-fault-in-the-standards-erc-20-erc-721-together\"><span class=\"ez-toc-section\" id=\"The_fault_in_the_standards_ERC-20_ERC-721_together\"><\/span>The fault in the standards: ERC-20 &amp; ERC-721, together<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Now, for instance, you are into <a href=\"https:\/\/metaschool.so\/articles\/gamefi-meaning\/\">GameFi<\/a>, and have been playing, say, CryptoKitties for quite some time.<\/p>\n\n\n\n<p>Naturally, you would want to own some of the assets that you have earned in the game, and collect and keep them as valuables. In a game like CryptoKitties, you can only do so via tokens. Some of these tokens would be fungible i.e. ERC-20 and some would be non-fungible i.e. ERC-721.<\/p>\n\n\n\n<p>If you own fungible and non-fungible in-game assets, both, you would need to have several different <a href=\"https:\/\/metaschool.so\/courses\/create-erc20-token-on-starknet-in-cairo-language\" target=\"_blank\" rel=\"noreferrer noopener\">smart contracts<\/a> supporting those assets. Sounds like a nightmare, no? That represents no concept of fractional NFTs or co-ownership of properties.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"the-solution-almost-erc-1155\"><span class=\"ez-toc-section\" id=\"The_solution%E2%80%A6_almost_ERC-1155\"><\/span>The solution\u2026 almost: ERC-1155<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The inefficiency, lack of management, and interoperability of these token standards are solved by ERC-1155. It allows the management of both fungible and non-fungible tokens efficiently, effectively, and economically within a single smart contract.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"the-extension-of-the-almost-solution-erc-6960\"><span class=\"ez-toc-section\" id=\"The_extension_of_the_almost_solution_ERC-6960\"><\/span>The extension of the (almost) solution: ERC-6960<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>But then what does the ERC-6960 do? The ERC-6960 aims to increase the scalability and flexibility of ERC-1155 and to work as an extension of ERC-1155 along with other implementations. These include the hierarchical representation of fungible and non-fungible tokens through a dual-layer classification. In simple words, as a dual-layer token standard, ERC-6960 will allow one asset to be divided into several sub-assets.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"922\" height=\"332\" src=\"https:\/\/metaschool.so\/articles\/wp-content\/uploads\/2023\/07\/eip-6960-dual-layer-token-dlt-1.webp\" alt=\"An visual charting out how the ERC-6960 token works\" class=\"wp-image-6205\" srcset=\"https:\/\/metaschool.so\/articles\/wp-content\/uploads\/2023\/07\/eip-6960-dual-layer-token-dlt-1.webp 922w, https:\/\/metaschool.so\/articles\/wp-content\/uploads\/2023\/07\/eip-6960-dual-layer-token-dlt-1-300x108.webp 300w, https:\/\/metaschool.so\/articles\/wp-content\/uploads\/2023\/07\/eip-6960-dual-layer-token-dlt-1-150x54.webp 150w, https:\/\/metaschool.so\/articles\/wp-content\/uploads\/2023\/07\/eip-6960-dual-layer-token-dlt-1-768x277.webp 768w\" sizes=\"auto, (max-width: 922px) 100vw, 922px\" \/><figcaption>Image from <a href=\"https:\/\/eips.ethereum.org\/EIPS\/eip-6960\" target=\"_blank\" rel=\"noopener\">Ethereum.org<\/a><\/figcaption><\/figure><\/div>\n\n\n\n<p>For instance, you have a fungible asset whose total supply is 60 units. The ERC-6960 will allow you to divide the asset into, say, three sub-assets with varying supplies of 10, 20, and 30 units, respectively. It is similar to taking a $500 dollar bill and dividing it into five $100 bills. You may check out the <a href=\"https:\/\/polytrade.gitbook.io\/rwa-marketplace\/\" target=\"_blank\" rel=\"noopener\">Gitbook<\/a> of the token standard to read more.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-do-the-token-writers-say\"><span class=\"ez-toc-section\" id=\"What_do_the_token_writers_say\"><\/span>What do the token writers say?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The founder of Polytrade is certain that ERC-6960 has the potential. Polytrade is essentially a trade finance platform on the Polygon blockchain which provides real-world borrowers access to low interest rates and swift financing.<\/p>\n\n\n\n<p>Metaschool connected with one of the token authors, <a href=\"https:\/\/www.linkedin.com\/in\/ashish-sood-65051911b?originalSubdomain=ae\" target=\"_blank\" rel=\"noreferrer noopener\">Ashish Sood<\/a>, who shared that the ERC-6960 token is very special to him and the Polytrade team.<\/p>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Read more: <a href=\"https:\/\/t.co\/pyhhY9E3dh\" target=\"_blank\">https:\/\/t.co\/pyhhY9E3dh<\/a><\/p>&mdash; Polytrade (@Polytrade_fin) <a href=\"https:\/\/twitter.com\/Polytrade_fin\/status\/1668823103882022915?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">June 14, 2023<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>When asked about why he felt the need for an extension token of ERC-1155, Sood shared:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>&#8220;Fractionalized asset projects often face the challenge of representing ownership in a clear and flexible manner.<\/p><p>Two common approaches involve creating ERC-20 tokens with low values:<br>a. where your holding of each token represents your share in the asset<br>b. locking ERC-721 and minting multiple ERC-1155 tokens as a representation of ownership.<\/p><p>However, these methods lack true fractionalization. ERC-6960 introduces a solution. It utilizes a main ID that links to the parent NFT, while the SubID can hold different variables. One of the biggest features is Batch Settlement for all fractions with a click of a button. Even if there are 100 owners of the same asset the NFT can be settled just using 1 click of a button&#8221;<\/p><\/blockquote>\n\n\n\n<p>When asked what drove him and the team to create an ERC token standard, Sood replied:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>\u201cOur motivation was very simple. There was a gap and somehow we saw a path and had a reason. We are deeply motivated people and want to see the overall growth of the ecosystem and anything that we can do is a privilege\u201d.<\/p><\/blockquote>\n\n\n\n<p>What is your take on the new ERC-6960? Let us know in the comments.<\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":11,"featured_media":6200,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[17],"tags":[],"class_list":["post-6199","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain"],"_links":{"self":[{"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/posts\/6199","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/comments?post=6199"}],"version-history":[{"count":11,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/posts\/6199\/revisions"}],"predecessor-version":[{"id":6791,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/posts\/6199\/revisions\/6791"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/media\/6200"}],"wp:attachment":[{"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/media?parent=6199"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/categories?post=6199"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/tags?post=6199"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}