Discover the NFT Revolution: ERC-6672 — A Business Marvel with Endless Redemption Adventures!

While ERC-6551 has been garnering widespread attention lately, I, as a rebellious individual, choose to introduce another standard that I particularly admire: ERC-6672. (And I am thinking to write ERC-3525 & ERC-4909 someday maybe)

In the world of Ethereum, a pioneering force in blockchain technology, ERC standards play an indispensable role. ERC, short for Ethereum Request for Comments, represents a series of proposals aimed at enhancing the interoperability and interchangeability of Ethereum smart contracts. These standards not only provide convenience to developers but also drive innovation in the application of smart contracts.

ERC-6672 primarily addresses the single redemption limitation of NFTs (Non-Fungible Tokens), allowing NFTs to support multiple redemptions. In the past, NFT redemptions were typically one-way, meaning that if my NFT had utilities to redeem a collectable, commonly used methods were “redeem with burn” or “redeem with transfer,” which restricted the liquidity and scope of NFT usage. Alternatively, some would store redemption records in a centralized database, which goes against the essence of blockchain. However, ERC-6672 elevates the process by recording redemptions on the blockchain, providing a more secure approach, thus enabling multiple redemptions and offering greater flexibility in NFT utilization. This opens up possibilities for integration into various types of business activities, such as trading, loyalty cards, membership cards, prepaid cards, tickets, and more.

Now, let us delve into the secrets of ERC-6672 together!

Basic Principles:

ERC-6672 extends the functionality of ERC-721 by introducing new functions and events to achieve the capability of multiple redemptions, all while ensuring transaction security and transparency. NFT contracts that adhere to this standard can retain ownership of the original NFT during redemption, and the redemption records are stored in the blockchain. This empowers NFT holders to engage in multiple redemptions whenever needed (e.g., to enjoy a lot of utilities at the same time), without concern for the NFT’s single-use limitation.

Important Code and Explanation (highlighting the key points for non-engineers, which is myself):

# “Event” here means it will watch all the redemption events on the blockchain, including their upload, update, and cancel

event Redeem(
address indexed _operator,
uint256 indexed _tokenId,
address redeemer,
bytes32 _redemptionId,
string _memo
);
event Cancel(
address indexed _operator,
uint256 indexed _tokenId,
bytes32 _redemptionId,
string _memo
);

# Verify all the parameters (operator, redemption Id, token Id) and make sure the NFT is redeemable and has the right to redeem

function isRedeemed(
address _operator,
bytes32 _redemptionId,
uint256 _tokenId
) external view returns (bool);

# Retrieve all redemption history records

function getRedemptionIds(
address _operator,
uint256 _tokenId
) external view returns (bytes32[] memory);

# Execute the redemption, with the exchanged item recorded in the memo

function redeem(
bytes32 _redemptionId,
uint256 _tokenId,
string memory _memo
) external;

METAVERSE

Increase value: In a metaverse auction platform supporting ERC-6672 standard NFT contracts, players can acquire different NFT accessories or items by completing specific tasks or achieving goals. These NFTs can be carried across platforms and redeemed multiple times for various utilities, such as other ERC-20 tokens, privileges, offline event tickets, Amazon discount codes, and more. By utilizing the ERC-6672 standard, these tokens become redeemable multiple times, and because the redemption history is recorded on the blockchain, they can also be sold at a higher price (the original NFT + utilities rewards). Buyers do not need to worry about whether the utilities have been used, thus resolving trust issues in transactions. For instance, if the utilities offer ten sets of discount purchases, the user can redeem five sets first and sell the remaining five sets. This not only introduces more engaging gameplay and development possibilities, but also enhances the utility and liquidity of NFTs in the game.

New channel: exchanges/ markets in Metaverse can become novel channels for product sales, akin to a web3 version of Alibaba. All products, such as computers, clothing, furniture, and e-books, are transformed into NFTs recorded on the blockchain. Upon purchase, ownership is acquired, and these NFTs can be freely transferred and resold. When needed, they can be redeemed for physical goods and delivered to the buyer’s address.

E-commerce

NFT technology allows intangible items that were previously non-tradable, such as voting rights or privileges, to become tradable units. They can be traded first and then redeemed, creating liquidity. (P.S. I call it ownership transactions, which differs from the transactions before that are mainly about goods -> you pay with any form of money and you receive the products or services, now we move our focus to the ownership behind these goods)

Recording redemption history and transaction records on the blockchain can address certain market inefficiencies. For example, electronic coupons/vouchers are less suitable for secondary resale compared to physical gift cards because buyers cannot verify if the seller is fraudulent or if the coupon/voucher has already been used. Hence, when receiving electronic coupons/vouchers as gifts or from companies, they cannot be resold, there’s demand and supply in the market, but with no transactions being made. Taking NIKE sneakers as an example, in the past, when investing in limited-edition sneakers, buyers might be concerned about the authenticity or mismatched sizes when reselling. Now, with NFTs + REDEEM, we can confidently trade the ownership of the shoes until the final person decides to wear them and redeem them from NIKE, selecting their size for delivery. (This can be further extended with NFC chips + ERC-6672 blockchain records).

Example if brands are utilizing ERC-6672: Adidas Sneaker Loyalty Program

Adidas, a globally renowned sports brand and manufacturer of beloved athletic footwear and apparel, can utilize the ERC-6672 standard to create a multi-redeemable NFT loyalty program, offering unique rewards and experiences to its loyal customers.

Imagine Adidas launching a Sneaker Loyalty Program, which issues ERC-6672 NFT loyalty cards. Every time a customer purchases a pair of sports shoes, they receive a stamp on their ERC-6672 NFT loyalty card. These points can be used to redeem specific rewards on the website or at designated physical stores, such as gifts, discount coupons, limited-edition merchandise, or VIP event invitations. Customers can also choose not to redeem immediately, and their NFT will automatically upgrade to VIP status, allowing them to redeem a customized pair of physical sneakers. In the metaverse world, their virtual avatars will also receive the same customized shoes, creating a seamless experience between online and offline. ERC-6672 NFTs will not disappear after the redemption; instead, the redemption history will be retained. This means customers can redeem rewards multiple times, not just once.

Moreover, Adidas can collaborate with other companies using NFTs and ERC-6672 as the data exchange format, enabling the same NFT to support various benefits and experiences like exchanging for a drink at a bar, attending a basketball game, getting a sports drink from a vending machine, obtaining new virtual props in a blockchain game, or gaining the right to purchase new shoes. If I don’t need a pair of new shoes, I can resell the purchase right in the form of an NFT, generating more secondary transactions, with the brand earning commission from each transaction made.

The ERC-6672 standard brings about more efficient and convenient web3 business models, seamlessly connecting goods across different platforms and facilitating easy redemption. It bridges the gap between the digital world and real-life experiences. Through multi-redemption functionality, users can easily access benefits and experiences from different brand platforms, maximizing the value of digital goods. It resolves the one-way limitation of traditional NFTs, enhances the flexibility of NFT usage and transactions, and opens up possibilities for the crypto gaming, art, virtual asset industries, and beyond. As one of the significant standards within the Ethereum ecosystem, the introduction of ERC-6672 will further drive the adoption and application of blockchain technology. Let us anticipate further developments in this standard and more creative use cases in future practice.