The development and evolution of blockchain technology have led to different protocols. For example, ERC-20 is a protocol that focuses on fungible tokens, while ERC-721 is a protocol for non-fungible tokens. Unfortunately, these two protocols were not connectable.
It is impossible to switch a token from one protocol to another, thus creating a new protocol, ERC-1155, that can connect these two protocols. This new protocol is the talk of the town among developers in the crypto space and users of crypto and NFTs, among others. This article will assist those new to the space who want to know what ERC-1155 is.
What is ERC-1155?
Understanding ERC-1155 is a straightforward process. The blockchain Ethereum is home to a plethora of protocols that power the various technologies that have been built on it. For example, in the Ethereum ecosystem, those who trade in fungible tokens such as coins or other tokens rely on the ERC-20 protocol as the primary transactional protocol to power their operations. As a result, the ERC-721 protocol became the de facto standard for non-fungible tokens, which we refer to as NFTs.
However, although many projects have been carried out using these protocols, both have some severely restricting limitations that have far-reaching consequences. One of these limitations is that they are not interchangeable, which is a disadvantage. In attempting to close the gap between the two protocols, there is no cost-effective way to bridge the gap between the two protocols unless a new protocol is developed that can perform the same functions as the two protocols did previously. And that brings us to the ERC-1155.
ERC-1155 is a standard protocol developed to serve both the roles of the two older protocols. So the ERC-1155 is essentially defined as a multi-token standard, which means that it can serve as either a non-fungible token protocol or a fungible token protocol. The implication is that it improves the functionality of both protocols and makes them more efficient.
Since ERC-1155 is a newer token, how is it different from earlier tokens of this nature?
How is ERC-1155 different from ERC-20?
The ERC-20 protocol is used to create fungible tokens. These are tokens that can be traded or exchanged in the cryptocurrency market. It is possible to exchange one thing for another. Physical or fiat currency and cryptocurrencies are examples of things that share their fungibility characteristics.
They are always equal in value. An Ether is always worth another Ether despite where it is being traded. A dollar is a dollar everywhere in the world, and it is equal to all the one-dollar notes in the world. As a result, the purpose of ERC-20 was to serve as a token standard for smart contracts that could power fungible tokens. The smart contract standard is used to power some of the cryptocurrencies that have been built on top of the Ethereum platform.
ERC-1155, on the other hand, is responsible for these tasks and serves as a link between the ERC-20 and other protocols such as ERC-721. As a result, ERC-1155 can be faster and more efficient than ERC-20. However, the most important thing about it is that while it can do the same things as ERC-20, it can connect the standard to other standards and simultaneously do the same things for multiple standards.
How is ERC-1155 different from ERC-721?
Because the ERC-20 is designed for fungible tokens, there was a need for a separate set of standards for non-fungible tokens to complement it. Non-fungibility refers to the fact that these tokens are not exchangeable for other tokens. They hold different values, and one cannot stand up for the other. As a result, they are distinct.
ERC-721 is the technology that powers this, and its protocols cannot be shared with other protocols, especially with the protocol of ERC-20, which powers fungible tokens. A non-fungible standard, like ERC-1155, was then made to work with another standard, like ERC-20, at the same time. The implication is that on the Ethereum network, one could be moved to the other using the new ERC-1155 protocols.
Why is ERC-1155 Important?
There are many reasons why the ERC-1155 is important:
- It allows for many transfers of tokens within a single smart contract, which happens effectively. It helps to reduce the transfer costs of such transactions.
- It can also simultaneously describe and allow multiple tokens' operations tokens, whether fungible or non-fungible.
- It also helps secure token transfers by self-verifying whether a transaction has been carried out. If such verification fails, it reverts the token to its original issuer.
- Also, ERC-1155 has a huge potential to perform different tasks, and more of functionality will be added as the development of the standard continues.
How to Get an ERC-1155 Wallet
ERC-1155 tokens use the same wallet address system as other Ethereum network standards; only some readily available wallets haven't added the compatibility needed to run. However, users can get the ERC-1155 wallet address from Trust Wallet or Enjin, the protocol's developers; developers can also integrate the protocol into their projects.
The Enjin wallet is one of the best ways to get the ERC-1155 wallet address. In addition, it stores digital collectibles such as fungible and non-fungible tokens. The wallet is available for download on the Apple Store and Google Play Store.
Users can follow the steps below to get the ERC-1155 wallet:
The first step is to install the app. On opening the app, three options are given: import, watch or create a wallet. The import option comes with different choices that serve different purposes. With this option, you can integrate existing wallets into the Enjin Wallet. First, you must create a password for the wallet to create a wallet option. After creating a password, the next step is to select the coins or tokens that will appear on the main screen. After this, you back up your wallet.
To send funds to the wallet, select the appropriate currency and use the "receive funds" icon to provide an address where users can send funds. The Collectibles options under the menu button display the ERC-1155 items and tokens.
Trust Wallet also offers an ERC 1155 wallet. Trust Wallet supports multiple chains in its crypto-collectibles wallet, as the NFT market moves away from Ethereum and toward other chains. This means you can keep all of your Ethereum-based ERC-721 as well as your ERC-1155 tokens, in one app.
The growth of fungible and non-fungible tokens on the Ethereum Blockchain has led to many protocols and standards for each type. These standards are ERC-20 and ERC-721 for fungible and non-fungible tokens, respectively. However, it comes at a high cost because they are not interchangeable and compatible. As a solution to these issues, a new standard was created: ERC-1155. Interestingly, other ERC-1155 functions are in the works. However, in the meantime, NFTs and other fungible tokens can now share a smart contract with this new and more powerful standard.