An in-depth interpretation of ERC-6551: Creating a new NFT standard for social networking and gaming
Original author: Ishanee, IOSG Ventures
ERC 6551 is a new proposal put forward by a third-party team (Future Primitive), which has recently caused a stir in the NFT community. The reason is simple - it opens up vast possibilities for new and existing NFT projects without having to wrap them up and tie them together using complex multi-threaded ERCs or rely on centralized companies.
The beginning of the story
Benny Giang, the first author of ERC, has several years of experience in the field of crypto consumption and processing NFTs. He is Cryptokitties, NBA" target="_blank" rel="noopener noreferrer">see moreAn early team member at TopShot and even a co-founder of Bistki. A few years ago, he founded FP with Jayden Windle as a consultant to provide creativity and consulting to brands and projects that want to launch new NFT series. While working on a project, the team encountered a problem and began to ideate ERC-6551 - the client wanted to have a series of NFTs, where each NFT itself included any future benefits provided to it, and if the original These benefits will not be lost if the NFT is traded in the future.
The team had some basic principles when developing 6551, which they shared on ETH Lisbon:
It should be backwards compatible with existing NFTs
It should be decentralized and permissionless
It should be simple (ideally a one-time) implementation so that NFT projects dont have to rewrite their code bases that may involve security issues.
Particular attention should be paid to the third point, as NFT projects typically have limited resources (compared to the broader crypto market) and therefore have less budget for security audits. Teams often copy and use industry standards, leaving little room for innovation and experimentation.
A brief description of the ERC-6551 proposal
The proposal introduces a Registry contract that is deployed on each chain to empower all NFTs on that chain. The registration contract uses the CreateTo function to assign each NFT a predetermined wallet address. CreateTo allows developers to deploy smart contracts to predetermined addresses.
The deployed smart contract (account) is called the Token Bound Address (TBA). The address is tied to an NFT and any parent wallet that owns the NFT has full access to it. Since TBAs are wallets/accounts themselves, they are more than just properties; they have full functionality like any other wallet and can hold other NFTs, ERC-20s, POAPs, and/or any future adopted token standards.
Data tracking
Since the activation of the first TBA in May 2023, the Ethereum and Polygon communities were the first to quickly adopt this standard. There are a total of 64k activated TBAs across all EVMs, 1.7k TBA-related transactions and 18k NFTs in activated TBAs.
TBA’s most active NFT collector
The most active TBA on Ethereum, Source: Dune
The most active TBA (link to Good Minds #3206) owns many other NFTs in the series, which can be seen by tracking TBA activity on Etherscan, which is a unique use of TBA. Among them, the NFT wallet continues to collect other works of the same series, and therefore will have a certain percentage of the total tokens of the series in the same wallet.
Any bid for this NFT (3206) technically must take into account the price of all assets collected in its TBA (assuming assets are not traded or transferred from the NFT at the time of sale).
A Good Mind NFTs TBA owns a percentage of other NFTs in the same series that are nested under its TBA. Development of the TBA standard is being conducted by tokenbound.org, which works with multiple teams to incorporate the standard into their products.
Comparison with other NFT standards and companies
While there have been several NFT solutions in the past, none have had the same advantages as TBA/6551. Key criteria to consider include:
Can NFT hold other assets, such as NFT, ERC 20, ERC 1155, POAP, etc.?
Do NFTs require packaging/additional steps?
Will the new standard be compatible with existing dApps?
Is it decentralized?
Source：IOSG Ventures
Use cases for ERC-6551
Games
Collectible games like Illuvium and Colony incentivize players to accumulate in-game assets. Typically, as a player progresses in the game, the wallet accumulates assets. However, when a character is traded, the assets associated with it do not transfer seamlessly to the new owner. Instead, players often choose to sell their entire wallet, ensuring that the main character and its associated assets are sold together.
With TBA-enabled character NFTs, players can now sell veteran character NFTs and eliminate the need to sell an entire wallet or go through a multiple or bundle sale process. Assets held in a TBA transfer seamlessly to the new owner upon completion of the sale.
The second benefit of using 6551 is that the pricing mechanism of the role and its related assets is brought to the chain and becomes transparent. Bidding and selling now occur on-chain, providing a transparent and secure trading environment.
social aspects
Lens Profile is an NFT just like your ENS address. Activating TBA for both allows users to cultivate a chain identity tailored to their social profile NFT rather than their wallet. While this difference is trivial to end users, it is significant to organizations seeking to build and leverage social or interest graphs.
Social protocols like Hats - creating NFTs with built-in access controls to access DAO functionality (and work as on-chain verifiable LinkedIn) can use TBA-enabled NFTs. NFTs distributed to core community members (non-paying employees) can be used as tokens for future airdrops, discounts, and any other benefits.
Brand activities
In line with the concept of creating a TBA-based social/interest graph; brands can target entire communities (eg: BAYC, Pudgy Penguins, etc.) with one click without the need to constantly index and update the wallet addresses that will receive benefits. TBAs eliminate the need for “snapshots” and simplify the database and bookkeeping functions that many brands would otherwise need to perform.
other
TBAs can support other industries such as digital fashion, real estate, DeFi, NFTFi, etc. in the future, but their application scope is not yet clear because most of these are emerging industries, or inventions that have matured to 6551 have not brought a 10x improvement to current practices. Improve.
Impact on the existing NFT market
The introduction of TBAs represents a significant improvement in user experience, but also brings significant changes to bidding, pricing and execution dynamics in the NFT market.
market bid
Normal bidding on Blur represents an assessment of the value of an individual NFT, taking into account factors such as the series transaction volume, minimum price, item rarity, and overall project quality. But for TBA-enabled NFTs, buyers not only need to evaluate these metrics, but also consider the value of the assets being held within the TBA. Now, NFTs can command a premium based on their involvement in other assets or activities, and buyers are willing to pay for it.
Interestingly, if the seller is unhappy with an offer, given the assets held in the TBA, they can move some assets out of the TBA. They can then accept what is initially considered a low offer, in which case the responsibility for fair pricing shifts to the end user.
implement
As the previous example illustrates, when buyers change their understanding of their purchases due to changes in TBA holdings, the market must implement buyer protection measures to prevent end-user exploitation. This may involve setting up escrow for NFTs with an active TBA, or adding double confirmations, such as signatures, to accepted bids and shipments to ensure a more secure trading environment.
in conclusion
ERC-6551 is a refreshing proposal and innovation in the NFT field. Todays sluggish NFT market is a painful experience for many NFT collectors in 2021. This direction over-promised and under-delivered on CC0 s, interesting IP, and token utility. It created many NFT millionaires, but ultimately left many people scarred. 6551 brings new features to NFT, and I hope the next generation of NFT projects can take full advantage of it!
