What is ERC-721?
ERC-721 is a technical standard used on the Ethereum blockchain for creating and managing non-fungible tokens (NFTs). Unlike ERC20 tokens, each ERC-721 token is unique and cannot be replaced with an identical one.
This standard underpins most NFT collections, digital collectibles, and unique digital assets.
How does ERC-721 work?
ERC-721 defines a set of rules that allow the unique identification of each token. Each NFT has a distinct identifier (Token ID) and can contain specific information about the asset it represents.
Through smart contracts, NFT ownership can be transferred, verified, and tracked directly on the Ethereum blockchain.
What is ERC-721 used for?
The ERC-721 standard is used for:
- NFTs and digital collections;
- digital artworks;
- blockchain game items;
- digital tickets and subscriptions;
- digital documents and certificates;
- representing real-world assets in digital format.
Examples of projects using ERC-721
Among the most well-known projects based on ERC-721 are:
- CryptoPunks
- Bored Ape Yacht Club
- CryptoKitties
These projects use unique tokens that can be bought, sold, and transferred between users.
ERC-721 vs ERC-20
The main difference between ERC-721 and ERC20 is the nature of the tokens:
| ERC-721 | ERC20 |
|---|---|
| Unique tokens | Identical tokens |
| Used for NFTs | Used for cryptocurrencies and stablecoins |
| Each token has a unique ID | All units are equivalent |
| Non-fungible | Fungible |
For example, 1 USDT can be exchanged for any other USDT without differences. In contrast, an ERC-721 NFT is unique and cannot be replaced by another NFT.
Advantages of ERC-721
- Allows verifiable ownership of unique digital assets.
- Ensures transparency of ownership on the blockchain.
- Facilitates trading of NFTs between compatible platforms.
- Is supported by most NFT wallets and marketplaces.
Disadvantages of ERC-721
- Transaction fees on Ethereum can be high.
- Liquidity is lower compared to fungible tokens.
- The value of NFTs can be very volatile.
Frequently Asked Questions
What does NFT mean?
NFT (Non-Fungible Token) represents a unique digital asset that can demonstrate ownership over a digital or physical object.
Are ERC-721 and NFT the same thing?
No. ERC-721 is the technical standard used for creating NFTs on Ethereum.
Can I send an ERC-721 NFT to any Ethereum address?
Yes, but the recipient must use a wallet compatible with NFTs to view and manage it.
Is ERC-721 used only for digital art?
No. The standard can be used for any unique digital asset, including tickets, certificates, game items, and tokenized documents.
Conclusion
ERC-721 is the standard that made the emergence and development of the NFT ecosystem on Ethereum possible. With its ability to represent unique digital assets, ERC-721 has opened new possibilities for digital art, gaming, collectibles, and asset tokenization.