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The launch of ERC 6551 or Token Bound Accounts (TBA) is certainly the most impressive addition to the Ethereum (ETH) open-source stack in the segment of NFTs since the introduction of the mainstream digital collectible standard ERC-721.
Once it achieves mass adoption, it could change the story about the use, economics, and functionality of NFTs on the Ethereum (ETH) and EVM ecosystem blockchains.
ERC 6551, which is called “Non-Fungible Token Bound Account”. An interface and registry for smart contract accounts owned by ERC 721 tokens was launched on May 7, 2023.
From the beginning, the standard has been developed in an open-source manner. However, its authors emphasized that some Web3 companies are already working on tools designed to make it easier to “upgrade” NFTs.
Non-fungible tokens, or NFTs, represent a type of cryptocurrency token with certain unique characteristics. While basically all cryptocurrency tokens (like fiat currencies) are convertible – for example you can always convert 1 USDT to 1 USDT, 1 BTC to 1 BTC – each NFT is a unique token.
Under the hood, NFTs should be treated as contracts regarding the ownership of some material. Should we examine the code of most NFTs, we can find that they are token protocols:It is certified that the Ethereum account 0xabcd… is the owner of the file Azuki4771.jpg starting at block 123456.Thus, most NFTs can be interpreted as tokenized digital property rights.
Users create NFTs typically associated with digital content: images, text, songs, videos, characters, and in-game assets.
Ethereum Request for Comments 721, or ERC 721, is a standard on the Ethereum blockchain, that is, a standardized design of non-fungible tokens. This format, introduced in December 2017, paved the way for standard NFTs: developers have been able to launch them in a streamlined manner.
On the other hand, ERC 721 is a model of a smart contract, i.e. a code template that describes basic NFT functionality. All mainstream NFT collections – Bored Ape Yacht Club, Azuki, RTFKT – include ERC721 tokens. Furthermore, it is a backbone element of the tooling of all the top NFT marketplaces: OpenSea, LuxRear, ReRible, Blur, etc.
Basically, there are two ways to create a self-replaceable token. First, you can try using a no-code tool like Mintable. With them, users can simply upload their content, pay the gas fee and get their NFT made. On some L2 series, the NFT can also be molded gasless.
Then, the NFT can be created with the OpenZeppelin code template. To create a token this way, a user needs to set up a MetaMask wallet, pay a fee (or claim a testnet token with a tap), take an ERC 721 code template, compile it, and deploy it to the network. Have to do Will be – either Ethereum or Polygon.
While, typically, NFTs are associated with programmable blockchains (those that support smart contracts), in 2023, the hype around “Bitcoin NFTs” – also known as “inscriptions” or “ordinals” – has Took hold
Ordinals are a technology that allows data to be linked to bitcoin (BTC) transactions. Since satoshis in bitcoin (BTC) can be modified, users can equip them with content ranging from .jpeg files to JSON data.
However, this standard may not go mainstream because it is technically sophisticated: to create ordinals, you need to be running a full bitcoin (BTC) node. Furthermore, the activity of Ordinals creators has rendered the bitcoin (BTC) network virtually unusable.
Account Abstraction, or ERC 4337, is a technology that allows Ethereum (ETH) wallets to act like decentralized banks. This blurs the line between wallets and smart contracts and paves the way for a new type of entity, i.e. “smart wallets”, in Ethereum and EVM compatible blockchains.
Account abstraction was introduced in early 2023 and is commonly described as the “next big thing” in Ethereum (ETH) functionality.
Vitalik Buterin has described this concept as one of the three pillars of progress towards the transition towards a mature technology stack for Ethereum (ETH).
ERC 6551 is an innovative mechanism in the Ethereum (ETH) segment. This allows NFTs to be equipped with an additional layer of wallet functionality.
ERC 6551 is a protocol that enables “regular” NFTs on the Ethereum (ETH) and other EVM blockchains to act like “smart contract wallets”, that is, to perform all the functions that non-custodial crypto wallets do. are normal. , As said, it allows ERC 721 NFTs to receive and send transactions, store your own NFTs, swap ERC20 tokens, etc. ERC 6551-enabled tokens are called “token-tied accounts” or TBAs.
ERC 6551 was proposed in early 2023 by Ethereum (ETH) veteran Benny Giang, co-author of the ERC 721 standard and co-creator of CryptoKitties, and Jaden Windley, principal software developer at Future Primitives. In February 2023, it was published as an EIP on the Ethereum Foundation forum, while it was activated in the mainnet on May 7, 2023.
The standard is completely open source and is the subject of active discussion in the Ethereum (ETH) community. ERC 6551 is backward compatible; Every existing NFT can be converted to TBA. Support for ERC6551-enabled tokens has already been researched by OpenSea and several other blue-chip NFT institutions.
Technically, ERC 6551 is an adjustment of ERC 721, the most common standard for NFTs on Ethereum. A “regular” ERC 721/ERC 1155 NFT contains only three types of entries, including the address of the NFT owner, the address of the person to whom the NFT can be transferred, and the attributes of the associated metadata (content).
by image Ethereum Foundation
Thus, the functions of NFTs are limited: they can only be transferred between Ethereum (ETH) addresses. However, should we use “registries” and “proxies” (other types of smart contracts), we can map a certain NFT to a standard Ethereum smart contract address (for example, BAYC 1234 To 0xabcd..).
NFT researcher and contributor to the ERC721A standard 0xCygaar Thrown light on ERC6551-enabled NFTs can control an unlimited number of crypto wallets:
A single NFT may control more than one Contract Account, however, each Contract Account is related to only one NFT.
Once this mapping is done, the NFT-bound wallet becomes a smart contract. Unlike multi-sig, the owner of the smart contract can authorize transactions executecall Order on Wallet.
As ERC6551 NFTs become regular crypto wallets – but without losing their NFT-specific features – they have plenty of use cases in Web3 and classic economics.
For example, thanks to impressive composability opportunities, all NFTs can be mapped to a single ERC 6551 NFT with its avatars. Similarly, a Web3 gamer may aggregate their in-game assets to streamline their display and usage. The whole process becomes user friendly and transparent. Everyone is able to track the real history of this or that NFT, which removes the possibility of fraud and selling stolen NFTs.
Then, ERC6551 NFTs can interact with DeFis, trading bots and marketplaces without revealing the identity and main wallet of their holders. This greatly increases the anonymity and security of the NFT experience.
Even more impressive opportunities open up in the “real world” economic context. For example, here’s how NFTs, the new benchmark in the tourism sector, can be used to create a holistic travel experience.
Travel experience powered by NFT technology pic.twitter.com/q3R9hYM18Z
Here’s how ERC 6551 tokens can be used even by customers with no prior cryptocurrency experience.
As an average user of cryptocurrencies, there are several ways you can benefit from starting to work with ERC 6551 tokens:
Thus, the activation of ERC 6551 paves the way for more immersive, transparent and feature-rich experiences for new and existing NFT enthusiasts across multiple Web3 segments. It can actually do for NFTs what ERC 4337 or account abstraction does for Ethereum (ETH) as a whole.
ERC 6551 is an impressive innovation in the Ethereum (ETH) segment. It enriches the tooling of non-fungible tokens with the functions of a regular crypto wallet. Anyone can convert their NFTs into a “Token Bound Account” through a newbie-friendly dashboard.
With ERC 6551, NFTs become functionally similar to “smart crypto wallets”, a new form of cryptocurrency wallet unlocked by an account abstraction mechanism. From 2023 onwards, the line between NFTs, crypto wallets and smart contracts has blurred.
Blockchain analyst and writer with a scientific background. 6+ years in IT-Analytics, 3+ years in Blockchain.
Worked in independent analysis as well as in start-ups (Swap.online, Monoretto, Attic Lab etc.).
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Disclaimer: The opinions expressed here do not constitute investment advice; They are provided for informational purposes only. The views expressed by our writers are their own and do not necessarily represent the views of U.TODAY. Every investment and all trading involves risk, so you should always do your own research before making a decision. U.TODAY is not liable for any financial losses incurred while trading cryptocurrencies. We do not recommend investing money that you cannot afford to lose.
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Source: cryptosaurus.tech
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