Learn about ERC-6551: making NFTs more dynamic and interactive

Logan Liu, the Operations Director of YBB Capital, has written a brief introduction to the new ERC-6551 standard, which includes its principles, main use cases, challenges, and limitations.

ERC-6551 is a new standard for non-fungible tokens (NFTs) that enhances their functionality and value by giving them smart contract capabilities. This means that ERC-6551 can hold and trade tokens and other NFTs just like a regular smart contract wallet. It addresses the issues of regular ERC-721 NFTs by using a permissionless registry that is compatible with existing ERC-721 NFTs. Anyone can create a Token Binding Account (TBA) for any ERC-721 token by calling a function on the registry and paying a small fee.

The primary use cases for ERC-6551 include composability, identity, provenance, and interdependence. Composability means that NFTs can be bundled together with their associated assets, such as other NFTs and tokens, into a configuration file. Identity means that each NFT has its own identity and can interact independently with DApps. Provenance means that a complete transaction history or a complete picture of utility can be obtained for an asset, rather than just proof of ownership. Interdependence means that NFTs can interact with other on-chain assets or platforms on their own, thereby enhancing their functionality and value.

However, ERC-6551 also faces some challenges and limitations, including the need to obtain support from existing NFT projects and platforms, the need to protect security, the possibility of providing a larger attack surface for hackers, and the need to provide a user-friendly and intuitive experience. Despite this, ERC-6551 has the potential to revolutionize the world of NFTs, giving each ERC-721 token a smart contract wallet that can own assets and interact with applications, making NFTs more dynamic and interactive than ever before.

Reference: https://twitter.com/0xLoganLiu/status/1678600016846528512

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