ERC6551 Founder Benny: The massive explosion of chain games will occur in the native field.
Source: World Island ThreeDAO
On July 10th, World Island had the honor to invite ERC 6551 founder Benny as a guest on World Island, to exchange and discuss the challenges and opportunities of NFT with 6 founders, as well as open topics such as AI and blockchain games. It is worth noting that Benny is also a founding member of CryptoKitties and ERC 721. The following is a translation of the highlights of the event, you can also scan the poster at the end of the text to watch the replay, and join the ERC 6551 community to communicate deeply with Benny.
World Island CoachDAO Simon: Please introduce yourselves briefly
Benny: Six years ago, I was a member of the ERC 721 team and launched CryptoKitties. After that, we launched NBA Top Shot. Taking this opportunity, we started collaborating with trendy brands, and eventually released our own SAPIENZ project, which is an NFT about digital fashion items. We hope that NFT characters can have their own clothing and accessories, so we created ERC 6551 for this purpose. That's my story.
Boyu: I am the Co-founder of RE:DREAMER, and we focus on tokenizing real-world assets, especially physical consumer goods. Therefore, we have many connections with manufacturers and supply chains. We hope to store many real-life behaviors and data into NFTs through blockchain, and we are integrating ERC 6551 with our own standard ERC 6672.
Kekos: I am the Co-founder of Createra, and we are building a Web3 game engine. We think ERC 6551 is designed very well, and we are also trying to combine it with games, such as in the DID field.
Shawn: I am the Co-founder of Parami Protocol, and we also have an ERC 5489 protocol. It can revolutionize the creator economy of the Internet and turn NFTs into gateways for Web3 content discovery.
Kaiyang: I am the Co-founder of xBank. We try to match the demand and supply ends of NFTs and provide more leverage for NFT buyers to lower their entry barriers.
Timmy: I am the Co-founder of Furion. We are developing NFTs in the direction of DeFi. We fragment NFTs from ERC 721 to ERC 20, and then empower the ERC 20 tokens in various ways to make them more usable.
Simon: What drives the innovation of ERC 6551? Benny, can you introduce the background and creative experience?
Benny: I have been a supporter of NFT for the past six years. I have attended gaming conferences in Shanghai, Hong Kong, Taipei, etc., and shared my ideas about NFT and CryptoKitties. I still remember how many people looked at me with strange eyes and didn't understand what I was saying. It is well known that ICO was very popular in those years, so nobody paid attention to niche NFT.
After that, the Dapper Labs I participated in decided to develop its own blockchain, Flow, and developed NBA Top Shot on it. So we missed out on Ethereum and other EVM-compatible chains. After leaving Dapper Labs, I returned to the Ethereum ecosystem. In these four years, NFT has undergone many changes, such as BAYC, AZUKI, Doddles, etc. So I have to find a way to catch up and learn where people are using NFT, as well as the possibilities of NFT in various fields. So ERC 6551 is not something recent in essence. For example, in areas like Flow, there have already been concepts of resource orientation. Therefore, ERC 6551 is native to blockchain but not to Ethereum.
The emergence of ERC 6551 was not something we imagined while sitting in a room, but a demand we discovered during the project process. SAPIENZ is a collaboration between Future Primitive and Jeff Staple, a very well-known street designer with 25 years of experience and partnerships with over a hundred brands including Nike. During this process, we had a cool idea - what if NFTs could change clothes and this process could happen on the Ethereum blockchain without requiring gas fees? However, solving this problem was very challenging. Fortunately, we had the opportunity to learn from many other projects like Doodles that had attempted similar things. In a hackathon in San Francisco, we developed a project using xmtp technology that allows NFTs to send messages to each other, enabling them to "talk." Then, during breakfast, I asked the team members if we could give NFTs their own accounts, so they can interact with other Dapps or hold other assets. This idea was very cool, so we did extensive research and looked for standards and projects, but we didn't find anyone who had implemented this idea, so we decided to do it.
First, ERC 6551 is not a token standard. Many people are confused and even compare it to ERC 721, but in fact, ERC 6551 simply connects each individual NFT to its own account. It is very open, so there are 5 crucial points to help everyone understand it.
First, ERC 6551 is applicable to all NFTs on Ethereum, Polygon, and other EVM chains, and it is backward compatible. This means that already issued NFTs like CryptoKitties can also bind to their own accounts.
Second, your NFT can hold ERC 20, ERC 721, and ERC 1155 tokens such as ETH and USDC.
Third, there is no packaging contract, so you don't need to send your NFT to a specific contract address.
Fourth, NFTs can be compatible with existing infrastructure such as Opensea, MetaMask, Etherscan, and other platforms.
Fifth, it is completely decentralized. Previously, some solutions were implemented in a centralized manner, but we strictly adhere to the spirit of decentralization. Therefore, the NFT is the only owner of the associated account, and we can never do any harm such as stealing user assets.
Simon: What are the main applications of ERC 6551? How do you think it will bring changes and innovation to the gaming and social fields?
Benny: I believe the first obvious field is gaming. Its role is to create a decentralized inventory system, which is very important for games. We are currently in communication with many game teams, and they are considering using ERC 6551 to make some new changes.
I think the second scenario is DAO. Many DAOs will issue their own NFT membership cards. However, the problem is that DAOs are related to loyalty and reputation. Before ERC 6551, in addition to membership cards, you could also earn points, SBT, and many other things. These would exist independently in your MetaMask. When you sell your membership card, you still have these things in your hands. ERC 6551 will structure all these things. Many DAOs will not only issue membership cards, but also include other assets related to reputation and behavior in these cards.
The third scenario is infrastructure. We have many projects, including Rabbit Hole, that are using ERC 6551. We are also exploring the development of data indexing and other fields. We are also discussing the integration of standards with platforms such as Zora and Opensea.
The fourth scenario is social interaction. We are in close communication with Lens Protocol because in Lens Protocol, you have many NFT assets including handles and followers that are unstructured and messy. ERC 6551 can create a network for them, so Lens Protocol is very interested in it.
Simon: What changes do the five founders of Wandering Island think ERC 6551 will bring to the field?
Boyu: I think ERC 6551 has great potential. We are particularly interested in the part where NFT can have real-world asset copyrights. It's really fascinating. Previously, people were thinking about having real-world people hold digital assets, but now it can be the other way around, where digital assets can hold real-world assets. When we communicate with some brands, we can see the potential for creating more interesting scenarios based on this, especially regarding membership mechanisms.
Kekos: I also think ERC 6551 will first be applied in gaming and social fields. For example, NFTs tied to user accounts can have their own identity and assets on the chain. Through ERC 6551, these assets can directly interact with Dapps, making game tasks more composable and interactive.
Shawn: As a member of Parami Protocol, I am definitely a firm believer in NFTs. In the social field, NFTs have already proven to be a very effective medium for showcasing people's identities, cultures, trends, etc. ERC 6551 aligns perfectly with the vision of Parami Protocol, tokenizing behaviors such as influence and interaction on the internet.
Kaiyang: Let's go back to 2017, when smart contracts had just emerged but there weren't many use cases. But now it's completely different. We've discovered that it can do a lot of things. Just like today, we have an NFT account, and I believe it will have a wide range of applications in the future. For us at xBank, as an NFT lending platform, imagine users entering our platform with NFT as their account. This NFT will accumulate users' points and credit, and it will expand into many gameplay options. We will actively explore the possibilities of integrating ERC 6551 with xBank's business.
Timmy: I completely agree with what Benny said about the ERC 6551 ecosystem development. I think the first requirement in this ecosystem is trading. It's important to combine ERC 6551 with the token standards ERC 20 and ERC 721 for trading because the most important attribute of assets is their tradability. The second point is community building. For example, if we buy BAYC, it automatically forms a community. I think having a strong community is very important, especially for PFP-type NFTs. A strong community will contribute to better ecosystem development.
Benny: I find Timmy's two points very interesting. When you create a DAO, you need to have a multi-signature wallet to manage the community's assets and add other signatories. Every NFT project is a DAO. If an NFT has 10,000 tokens, there will be 10,000 wallet addresses. So issuing an NFT is like creating a DAO. But you need to add all these 10,000 wallet addresses to the multi-signature wallet and require 5,000 addresses for voting. This can create efficiency issues. However, I believe there will be people designing new DAO tools. I think it's an interesting direction worth exploring.
The second point is that there are many people working on the Defi direction. I know a lot about NFT and DAO, but to be honest, I don't know much about Defi. I am a beginner and I have put a lot of money into Defi, but I lost it all. However, there are two views on ERC 6551. One view is that it will make NFTs more unique and harder to price because with ERC 6551, many assets can be included in the NFT and accumulate on-chain data, making it more difficult to estimate its price compared to traditional NFTs. The other view is that ERC 6551 will create a new Defi paradigm. I don't know much about Defi, but as far as I know, you can create an NFT as an LP for Uniswap or other Defi protocols and earn profits. You can also create a portfolio of assets for this NFT, which is like an on-chain hedge fund, and you can sell it on Opensea.
Simon: Benny, what are the plans for ERC 6551 next? How can we help it be adopted by more people?
Benny: In the near future, there may be something like an extension store, where developers can build extension plugins that can be installed on NFTs. Imagine if you own Azuki, you can only wait for the project team to create new contracts and add new features to the NFT. But in the future, if there is an extension store based on ERC 6551, and developers can release many interesting features in it, you can add them to your NFT without being the creator of the NFT.
Next, I think it's great to combine AI with it. For example, in games, there will be NPCs that give you tasks and talk to you. In the future virtual world metaverse, there will also be NPCs. However, when people leave the virtual world, the whole world will become empty like a ghost town. What we are trying to do is to use AI and programmable NFTs as NPCs to fill this world. These NPCs will also be part of the blockchain, and every action will be on the chain. They will have their own identities and assets. This really excites me.
Simon: How secure is ERC 6551?
Benny: We believe it is relatively safe. We have already conducted two code audits, and we will continue to do so. But as you know, smart contracts can never be 100% secure. I will try my best to ensure security through audits, bug bounties, and other means. So first, I need to tell everyone that there is always a certain probability risk when interacting with smart contracts. This cannot be eliminated. There is nothing that is 100%.
Second, let's say you have an NFT, and it holds other NFTs. All the NFTs will ultimately be held by a wallet, which may be MetaMask or Ledger, etc. So if you leak the mnemonic phrase of this wallet, you will still be at risk of losing your assets through attacks.
The third risk is that if your NFT holds a lot of assets, and you list it on Opensea as a bundle for sale, someone offers you a price based on the entire set of assets. Then you transfer all the assets under the NFT before accepting the offer. The other party only gets an empty NFT shell, and nothing else.
One possible solution is to use a time lock and set a specific time for your NFT. Before this time, the assets inside the NFT are locked. Other buyers will trust that you won't do anything harmful when they see it is locked. However, it also means that you cannot extract the assets normally. So this solution is not perfect, only temporary.
Another solution is that we are closely collaborating with Opensea. They have assigned an engineer specifically for this matter. Opensea will check if the assets exist and if there are any changes in the token's account. If there are any abnormalities, it will prevent the buyer. This is a more efficient and long-term solution.
Simon: How might ERC 6551 integrate with AI?
Benny: Whenever I think about this question, I get excited but also scared. Because currently, ChatGPT can only have conversations, it doesn't have assets, nor its own wallet. So, even though it is smart, it cannot do any evil things. But just like the NPC scenario I mentioned earlier, it can earn millions of dollars through flash loans, attack the blockchain, and even hire real-world people to work for it once it has money. Therefore, on September 20th, we will be organizing an event in New York, inviting friends from OpenAI, NVIDIA, artists, and various industries to discuss ethical topics. To some extent, we are unleashing this unstoppable power. It could be the end of humanity, or maybe we can coordinate and truly set some ethical standards.
Just like Elon Musk's concerns about AI before, if the NPC I mentioned has its own AI model injected with a soul, and holds assets and a wallet to interact with others, because the blockchain is decentralized, they have all the rights in the blockchain world. These NPCs may become like Skynet in movies. I don't know if there are solutions for the risks related to decentralized AI models. Perhaps this is why AI models are not yet open source.
But our conversation today is happening in the year 2023, and it is not much different from when I talked about NFTs in 2018. So we are still in a very early stage. But I believe that this transformation will not happen with the current blue-chip NFTs, but with new projects that deeply think about this matter.
I have spent a lot of time studying psychology. The Dunbar's Number, also known as the 150 rule, suggests that humans can only maintain meaningful and stable social relationships with up to 150 people throughout their lives. This has led me to consider a similar question: how many meaningful connections can humans have with objects? Imagine if my house were on fire, what would I protect? It could be a photo with my parents or perhaps an engagement ring. Currently, there is no research on the maximum number of deep connections humans can have with objects, let's assume it's 100 for now. At least 99% of these connections are in the real world today. However, I believe that in 5 to 10 years, there will be a large number of digital items that you would care about. This is where NFTs come in. Ownership associated with NFTs makes digital items meaningful. In the physical world, you are limited by your physical space. You can only keep meaningful items in a limited room. However, in the digital world, you can own millions of items. NFTs break the limitations on ownership space and quantity. Additionally, in the physical world, these items are static. In the digital world, you can program and interact with NFTs. They can even have their own consciousness when combined with AI. This will be very interesting.
How will the five founders of the Wandering Island integrate ERC 6551 with their own products?
Timmy: Building a community is very important to me. Community contributors will receive credits, SBT, and other reputation rewards. They can then vote on product directions or enjoy discounts and perks. I believe ERC 6551 can be helpful in this aspect.
Kaiyang: I think a more reasonable pricing model is crucial for us. We will focus on how protocols like ERC 6551 can affect the valuation of NFTs and adapt to it.
Shawn: I think Benny's ideas are very consistent with the Parami Protocol we are developing. We believe that a person's branding, influence, and culture can be tokenized and to some extent become a DAO. These will all be quantified as value on the blockchain. We believe that ERC 6551 will have many synergies with Parami Protocol. We have already developed a Google Chrome extension to enhance the interactivity and scalability of NFTs.
Kekos: As I mentioned earlier, I will try to combine ERC 6551 with the DID in our game. So please stay tuned.
Boyu: Because we focus on the integration of manufacturers and supply chains, this process can be complex as an entity may have different roles and permissions. In addition, our community ambassador program will also involve managing various roles and badges. We will try to use ERC 6551 internally within the system.
How does ERC 6551 solve cross-chain problems?
Benny: The TBA implemented by ERC 6551 itself is cross-chain compatible. Let's say you own a "Month Bird," and the account address bound to it on the Ethereum mainnet is 0x 123. This address will also be the address on other EVM-compatible chains such as Polygon, Optimism, Arbitrum, and so on. So when you transfer the NFT from Ethereum to another EVM-compatible chain, the account on that chain will still belong to you. But the biggest problem is, if you have assets held on Optimism, how can I control your Month Bird on the mainnet? We are developing an account custodian that uses LayerZero and other cross-chain solutions to allow your Month Bird to operate assets across chains. However, we are not satisfied with this idea because it is still centralized to some extent since it requires a cross-chain provider. Therefore, we are working on a new, more automated and native version that can complete cross-chain signatures through the NFT account. The only issue is that you need to pay the gas fee from the mainchain to the other chains. We are researching some feasible ideas and actively communicating with the Optimism team on how to eliminate the need to pay gas fees on the mainnet. Instead, we can execute asset transfers through signatures without using a cross-chain provider. This is a more decentralized solution that no one has done before, so it is still in the research stage. We believe there is an 80% chance of implementing it.
Ultimately, if you want to issue NFTs or chain games, you can choose the Ethereum mainnet because it has more players in the NFT space. Then, you can issue things like points and badges related to this NFT on Layer 2. You only need to prove that you own the NFT on the mainnet to do this. This requires a lot of time for research and testing, approximately 2 to 4 months.
Simon: As a founder, what do you think is the most important thing?
Benny: I think as a founder, it doesn't matter which region you are in, whether it's Asia or Europe. What matters most is that we have a responsibility to evangelize and educate, to make more people understand your project. Although our conversation today is about ERC 6551, I want to emphasize that as a founder, you need to constantly ask yourself why you are doing this. Try to set aside the technology behind it and explore your true purpose. What problem do you want to solve? And then think about whether using the current technology is the best way to solve this problem. So I often see a lot of debates about ERC 6551. Some people say it is not that great, others say it is copying something that was already there years ago. But I want to say that the debate about whether the technology is good or not is not the most important thing, because first of all, everything is open source and I don't make money from it. Secondly, I believe that if we keep competing, arguing, and attacking others, it is not the process of achieving a greater goal in the blockchain field. Whether it is Ethereum or other ecosystems, they have developed through cooperation and contributions. So we must cooperate and grow together, rather than blindly arguing and attacking, which cannot bring about any substantial changes to the industry.
I believe that in the past six years, my experience at CryptoKitties and Dapper Labs has originated from Ethereum. I have learned a lot from it, especially the spirit of decentralization. Dapper Labs is a centralized company worth hundreds of millions of dollars. I was an early member of it. But when it grew to a scale of 600 people, I felt the disappearance of the company culture, the respect for decentralization, and the great goal. Instead, it started making a lot of wrong decisions. But in a decentralized open-source organization, you can prevent all of this from happening. So if you are a founder, you really need to focus on decentralization and openness, so that the organization can live longer.
Will the metaverse game have some opportunities next year?
Benny: My predictions about the future may not be accurate. It's difficult for me to determine what will happen tomorrow. However, I have indeed come across some interesting game teams. But what I want to say is that in 2018 when I went to China, Korea, and Japan to attend game conferences, I saw many very large game companies. They had good IPs and showed interest in Web3. However, six years later, I didn't see them succeed. Of course, there may be many reasons, such as policies and other factors. But at least I believe that blockchain games need to be completely decentralized, without even a centralized server. The explosion of blockchain games should occur in more native fields. I don't think relying on IPs can solve the problem because even when I was at Dapper Labs, we signed contracts with many major IPs, including the NBA, but it wasn't very successful. Even huge IPs like Disney, I don't think they would be good examples either. Perhaps previously unseen decentralized IPs like Nouns, Bored Ape Yacht Club, etc., might succeed. I have seen many game teams trying to sign contracts with existing centralized IPs, but centralized IPs will definitely do centralized things. There are many constraints and formalities in it, and you can't truly create it freely. So, massive breakout games should be more native, decentralized, and bottom-up.
