June 24, 2022 - 17 min read
Over the last two years, the NFT craze has created a new multi-billion dollar market for digital collectibles and has already begun to have a major impact on the art, gaming, and fashion industries, among many others.
While NFTs can be minted on a variety of blockchains, the vast majority of NFTs are minted on Ethereum, with most of those being minted utilizing the ERC-721 token standard. For example, the ultra-popular Bored Ape Yacht Club (BAYC), CryptoPunks, and Moonbirds NFT collections, among many others, are all ERC-721 NFTs on the Ethereum blockchain. The ERC-721 standard was created by Dieter Shirley, William Entriken, Natassia Sachs, and Jacob Evan, and was launched in 2018.
Despite the popularity of the ERC-721 standard, a new Ethereum NFT token standard has arisen, the ERC-1155 standard, which offers more flexibility– and it could begin to overtake the ERC-721 NFT standard in the coming months and years. In this article, we’ll review both token standards, what they offer, and how they impact both developers and ordinary users.
– Witek Radomski, co-creator of ERC-1155
Unlike the ERC-721 token standard, the ERC-1155 token standard was not developed by the core community of Ethereum developers. Instead, it was developed by the gaming company Enjin and released in June 2018, initially intended to tackle the shortcomings of both ERC-721 and ERC-20 tokens with gaming applications in mind. Enjin is a well-known Ethereum-based blockchain gaming platform that allows games to mint NFTs easily and inexpensively. It also has its own token, Enjin Coin (ENJ), that helps support games using its platform.
Before we dive into the difference between ERC-1155 vs. ERC-721 tokens, we should clarify the difference between these token types and the popular Ethereum ERC-20 token standard. ERC-20 tokens are fungible tokens, meaning that each token is, for all intents and purposes, the same.
This allows ERC-20 tokens to be created and transferred in large quantities and traded on both centralized and decentralized exchanges for the current market rate. Popular cryptocurrencies and tokens using the ERC-20 token standard include Tether (USDT), Shiba Inu (SHIB), Maker (MKR), and 0X (ZRX).
In addition, tokens on other blockchains, including Bitcoin, can be bridged to the Ethereum network, creating tokens “wrapped” in the ERC-20 standard. Popular wrapped ERC-20 tokens include Wrapped Bitcoin (wBTC), a token pegged 1:1 to Bitcoin which can be used to transfer Bitcoin when using Ethereum-based wallets or exchanges that are not Bitcoin compatible. Wrapped tokens can also be “unwrapped” by bridging them back to the original blockchain. Like ERC-20 tokens, both ERC-721 and ERC-1155 can be “wrapped” in other token standards by bridging them to other blockchains.
However, in contrast to ERC-20 tokens, both ERC-721 and ERC-1155 tokens are non-fungible, meaning that they are completely one-of-a-kind, each representing a unique digital asset stored on the Ethereum blockchain. Both of these NFT token standards allow a percentage of royalties to be paid to the initial creator of the NFT each time the NFT is sold or changes ownership.
It should be noted that in addition to representing digital assets like JPEGs or videos, NFTs of all types can also represent real-world assets, such as art, cars, or even real estate. These NFTs can also be fractionalized to allow multiple owners of the same NFT.
It should be noted that Ethereum NFTs are far from the only type of NFT out there. Other blockchains, like Solana, Avalanche, and Binance Smart Chain (BSC), among others, are all NFT-capable. Solana NFTs have recently surged in popularity due to their low gas fees and their addition to OpenSea, the most popular NFT marketplace on the market today.
Like ERC-721 tokens, ERC-1155 tokens do not have their own addresses. However, when minted or transferred, the creator or sender must indicate a recipient address. ERC-1155 token activity can be tracked using Etherscan, which we link to below.
Here is a short list of some games and projects using the ERC-1155 token standard. We will dive into some of these in more depth later.
While ERC-1155 NFTs are nowhere near as widespread as their ERC-721 cousins, several major NFT collections have been launched using the ERC-1155 standard.
One example of a recently launched ERC-1155 NFT collection is Microsoft Azure Heros, which we mentioned in the last section.
The Microsoft Azure Heros collection is a series of Badger illustrations intended to reward members of the Azure developer community for participating and making recognizable contributions. Individual NFTs are rated by rarity and are intended for individuals who have taken on different roles or worked on developing specific parts of Azure, such as being community leaders or championing sustainability objectives. Individuals in the Azure development community can nominate themselves or another community member to win an Azure Hero NFT. Recipients receive a personalized QR code which can be scanned with their phone to claim their NFT.
Another well-known NFT collection utilizing the ERC-11554 standard is the Adidas Into The Metaverse collection. The collection has four distinct launch phases; ERC-1155 NFTs are used for phases 1-3, while ERC-721 NFTs are utilized for phase 4. Customers can purchase various versions of the NFTs, which gives them access to both physical and digital items. Physical items offered include Adidas Originals sneakers and clothing, as well as gmoney, PUNKS, and Bored Ape Yacht Club merchandise. Digital items include access to virtual land in the upcoming Adidas Metaverse.
Abstract Pony Collection is yet another interesting ERC-1155 NFT collection launched by the NFT marketplace NiftyZone. It consists of 6 artistically painted abstract ponies and was launched in January 2022. In addition to being available on NiftyZone, the collection is also available for sale on OpenSea.
A variety of crypto and NFT wallets currently support the ERC-1155 token standard, including:
While MetaMask supports holding ERC-1155 NFTs, you cannot see them natively in the MetaMask Mobile app, though this may change in the near future. Currently, ERC-1155 tokens are supported by the MetaMask wallet in such a way that they can receive and store the tokens, but, unfortunately, it can’t (yet) send the tokens.
Since shortly after their inception, ERC-1155 tokens have been available on OpenSea, the world’s most popular NFT marketplace. In September 2019, OpenSea announced a special marketplace for ERC-1155 tokens.
Just like ERC-721 tokens on OpenSea, users can mint, sell, and auction NFTs. OpenSea typically takes a 2.5% commission on all NFT sales.
Gaming was the initial purpose for the creation of the ERC-1155 standard, though, as previously mentioned, it can be used for a wide variety of other purposes. All of the below tokens are available on OpenSea.
That being said, some of the most popular games using ERC-1155 tokens hosted on OpenSea include:
The Sandbox: The Sandbox is one of the most popular blockchain P2E games in the world, and is typically considered the world’s most popular virtual land game, with land in the game costing thousands of dollars. A variety of celebrities and brands have purchased and developed land and NFT items, including ERC-1155 NFTs, in The Sandbox, only increasing its popularity.
Town Star: Town Star is a play-to-earn blockchain farming game. The game was created by one of the co-founders of Zynga, the company which created Farmville. Town Star allows players to compete and win prizes and has already awarded players over $2 million in rewards. In the game, users must make the most of limited space and resources to grow their town and craft high-value goods that they can sell. The game is considered the flagship game of Gala Games, a specialized blockchain gaming network built on Ethereum.
Spirit Clash: Spirit Clash is a digital collectible card game that allows players to fight with a variety of characters in order to while traveling amongst the six nations of Kartulos, and collecting rare items which will assist players with quests. The aim is to claim three spiritual cores, objects of great value that will allow the player to become the undisputed Overlord of Kartulos. The main game and quests are played in single-player mode, though players can also start matches with other players online.
Age of Rust: Age of Rust is an interactive sci-fi game set in the year 4424 A.D. The game is focused on a journey to search for new life on the other side of the galaxy. Users can explore a variety of interactive environments on a variety of worlds including space stations, mystical caves, and ancient ruins while unlocking puzzles and secrets. Players can collect, sell, and trade their NFT cards on OpenSea and other NFT marketplaces.
The Six Dragons: The Six Dragons is an open-world fantasy RPG that consists of 64 square kilometers of territory, which includes a wide scope of exciting environments including one billion dungeons and craft items, as well as a player-owned, decentralized economy that also allows players to sell and trade their NFT items.
While OpenSea may be the most popular NFT marketplace offering ERC-1155 NFTs, it’s far from the only one. Other ERC-1155 marketplaces include:
NiftyZone: NiftyZone, not to be confused with Nifty Gateway, describes itself as one of Asia’s largest NFT marketplaces. Unlike some NFT marketplaces, NiftyZone hosts NFTs on a wide array of blockchains, including Polygon and Binance Smart Chain (BSC). NiftyZone may not be a place to find the largest NFT collections, but it could be an excellent choice to discover smaller, emerging artists, especially those located outside the United States.
Rarible: Rarible is a popular NFT marketplace with a focus on rare media and sports NFTs. In addition to Ethereum, Rarible also integrates with the Tezos and Flow blockchains. Unlike some other NFT marketplaces, Rarible is owned by its community, which can vote on proposals and steer the future of the marketplace.
Coinbase NFT: While Coinbase may be one of the most established exchanges in the crypto industry, its NFT marketplace is one of the newest, having been launched in April 2022. Coinbase NFT is designed for ease of use, as it easily integrates with the Coinbase Wallet. It should be noted that, however, unlike crypto, Coinbase NFT does not custodially store NFTs. A variety of collections, including the well-known Lazy Lions NFT collections, partnered with Coinbase for the launch of its NFT platform, and, while still in the growing phases, the platform looks to have a bright future.
Async Art: Async Art is a highly unique NFT marketplace designed for artists to host and develop programmable art, art that can be developed and changed over time by multiple artists. Each piece of programmable NFT art on Async Art consists of a Master and Layers. A Master is the core NFT while Layers are distinct, modifiable elements that make up the art. Each layer is tokenized, meaning that t different artists can own different layers and contribute to changing and growing each piece of art on the platform. Async Art is somewhat more complex than other platforms, however, so it may not be the best for those looking for an easy user experience or to purchase the most popular NFT collections.
Nifty Gateway: Nifty Gateway is an NFT marketplace with a focus on high-value NFT drops and celebrity art. Nifty Gateway has gained notoriety in the NFT industry due to the fact that the world’s two most expensive NFTs were sold there, including PAK’s The Merge, which sold for a staggering $91.8 million in December 2021. Unlike most other NFT marketplaces, Nifty Gateway allows users to buy NFTs with fiat currency, not just crypto, which can reduce transaction costs and make it easier for non-crypto-natives to purchase NFTs.
Perhaps the only major Ethereum-based NFT marketplace that does not currently offer ERC-1155 NFTs is SuperRare. The Binance NFT Marketplace is based only on Binance Smart Chain standard NFTs, while Magic Eden only offers Solana NFTs, so these marketplaces do not offer NFTs in either the ERC-721 or ERC-1155 standards.
Just like ERC-20 fungible tokens and ERC-721 NFTs, ERC-1155 tokens can be bridged to other blockchains, including Ethereum Layer-2s. Ethereum Layer-2 blockchains are built on top of the Ethereum Layer-1 (mainnet) blockchain and are designed to increase transaction speeds while reducing gas costs while inheriting the scalability, decentralization, and most of the security guarantees of the main Ethereum blockchain.
Polygon is currently the most popular Layer-2 blockchain on the market today. In contrast to Etheruem, which has a maximum speed of 15 transactions per second (TPS), Polygon can often reach 700-1,000 TPS and has a theoretical TPS of 7,200 TPS, with future updates potentially increasing that number to hundreds of thousands or even millions of transactions per second. According to its website, Polygon currently hosts more than 500 dApps, has processed more than 600 million user transactions, and has 60 million unique user addresses. According to DeFi Llama, Polygon currently has $2.5 billion in TVL (total value locked) in DeFi applications, such as decentralized exchanges (DEXs) and borrowing and lending applications.
In contrast to Ethereum, where transactions regularly cost between $50-$70 in gas fees, with fees running into the hundreds during times of network congestion, Polygon’s gas fees generally run between $0.0005 to $0.20, though costs have been slowly rising as network use has increased.
To take advantage of Polygon’s faster times and lower gas costs, many people have started bridging their NFTs (both ERC-721 and ERC-1155-based) to the Polygon network. This is a link to the Polygon NFT bridge, while this is a link to the developer documentation for NFT bridging from Ethereum to Polygon.
Here are some of the ERC-1155 tokens using the Polygon Layer-2 blockchain.
BULLY’ Apes, an NFT collection hosted on Polyon, for sale on OpenSea.
As we’ll mention more about later, ERC-1155 gas fees are identical to ERC-721 gas fees for single NFT minting and transfers, however, the benefit to the ERC-1155 is that a massive amount of NFTs can be minted or transferred in a single smart contract, which can exponentially reduce fees, particularly if hundreds or thousands of NFTs are minted or transferred at once. The ERC-1155 standard also allows a variety of token types, including fungible, semi-fungible, and NFTs, to be transferred or minted in the same transaction.
When compared to the ERC-1155 token standard, the ERC-721 token standard does not necessarily have any distinct benefits. However, some do consider it safer due to the fact that it has been far more “battle-tested” than the ERC-115 standard.
When compared to the ERC-721 standard, the ERC-1155 standard has a variety of major benefits, including:
There are a variety of tutorial resources for developers looking to create or develop ERC-1155 NFTs. Some of these include:
While ERC-721 tokens still dominate the market today and are still used for most new NFT collections, we will likely see the ERC-1155 token gain in popularity, particularly as NFTs are increasingly used in gaming applications. This is due to a variety of the factors we’ve reviewed, including the token’s ability to reduce gas fees by enacting batch transfers, as well as the standard’s incredible ability to create dynamic NFTs that can change and evolve over time.
In addition to the utilization of traditional ERC-1155 NFTs on the Ethereum network, we will likely continue to see NFTs (of both the ERC-721 and ERC-1155 standard) bridged to a variety of other blockchains via the use of cross-chain NFT bridges and wormholes. Due to the desire for lower gas fees and faster transaction times, NFTs will likely increasingly be bridged to both Ethereum Layer-2s like Polygon and Arbitrum, as well as Ethereum competitors like Binance Smart Chain and Solana.
Overall, the future for ERC-1155 tokens is bright, and we will probably see even more uses for these NFTs over the coming years. However, it’s entirely possible that a new Ethereum NFT standard will arise that could eclipse both ERC-721 and ERC-1155 NFTs in popularity. Only time will tell.
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