ERC6551 Token — The Game-changing NFT Standard
Non-Fungible Tokens (NFT’s) are a perfect medium to represent the ownership and authenticity of digital assets. These tokens cannot be divided and copied as their data are recorded in a blockchain securely. As a crypto aspirant, you may know about the NFT token — ERC721. This token has widespread use cases and is identified by its significance. But what pulls them back are the limitations such as lack of smart contracts and interoperability.
These limitations impact the ERC721’s stunning growth and its versatile acceptance in business sectors. To overcome this, Ethereum’s Token Bound Account standard — ERC6551 came into the market. This allows the Non-Fungible Tokens to access smart contracts and exhibits better adaptability and interoperability. As a result, trending NFT businesses encounter level-ups and their innovations can not be explained within a line.
So this blog explores how ERC6551 enhances the ERC721 token’s role with various use cases and business benefits. Let us begin with the basics…
What is an ERC6551 Token?
ERC6551 is a token Standard known for Token Bound Accounts (TBAs) which acts like a smart contract wallet to manage NFTs operations. That means this token standard is meant to provide a smart contract account to record the NFT functionalities and to hold the corresponding assets for each ERC721.
Well! The ERC6551 acts like a permissionless registry to empower the ERC721 token and it is able to connect with smart contracts, decentralized applications also. As a result, the particular NFT can perform without any limitations. And its changeover lays the groundwork for new business opportunities. Thus ERC6551 eliminates the Non-Fungible Token’s barriers such as owning an asset and connecting with other blockchains.
So as business people, you may now be curious to reveal the strength of ERC 6551 over ERC721. The following comparison may help you in this regard.
ERC 721 vs ERC6551 — Comparison
The table below highlights the significance of ERC6551 over ERC721 by providing detailed grades for both tokens.
So from the above comparison, you can witness the superior edges of the ERC6551 token.
Therefore, activating ERC6551 tokens for improved business integration is not a difficult process. However, you might be wondering how it happens. In this regard, the following section has the answer.
How does ERC6551 enhance NFT functionalities?
Revealing the strength of ERC721
We already discussed that enabling fully functional NFT is the scope of ERC6551’s arrival. This is possible by fueling smart contract functionality to the NFT. Enabling this allows the token to function without constraints using TBAs. So irrespective of the unique and dependent characteristics, the NFT is now capable of owning or representing any asset.
Improvise ERC721’s Nature
The TBA enhances ERC721’s flexibility and composability to give the users full control over their assets. For business people, this is a fair option to yield full potential from the NFTs. Especially for the Web3 and Metaverse-based industrial sectors. In this regard, scalability and security are the elements to consider here.
Fit for Convenience
Smart contract resolves security and scalability concerns. The smart keeps the token secure by regulating the functionality with blockchain technologies. This reflects in the performance and security of Non-Fungible Tokens. And make them eligible for large-scale businesses. Overall, the ERC6551 ensures a convenient experience for the user and token holder by delivering the NFT benefits in real-time.
However, from a business perspective your next question would be: Will ERC65551 impact the future of the Non-Fungible Token business? Let us find the answer…
How ERC6551 impacts the future of NFTs
The influence of the ERC65551 token makes Non-Fungible Token more dynamic and interactive. Thus the ERC721 gets tuned to be fit for various use cases. Here, let us discuss the potential behind this…
Backward compatibility
All existing ERC721 tokens can be migrated with the Token Bound Account standard easily. This backward compatibility makes this possible without compromising token performance. Now, the Non-Fungible Token is capable of enhancing overall business operations.
Beyond ERC721’s Boundaries
The ERC721 has static characteristics to represent an asset. However, it significantly limits the token performance. For instance, let us consider the NFT gaming platform. Each asset is represented by a separate NFT where its static characteristics play well. However, implementing the dynamic characteristics with NFT turns them to work for multiple assets. As a result, the load on the gaming servers is drastically reduced and the platform can provide a better gaming experience.
Flexible to Innovate
Unlike ERC721, the ERC6551 token represents all the identities of the assets involved. However, the upshifted NFTs can be used for anonymous functions based on business needs. This may be a useful fact for decentralized platforms to get a hike in their security.
The above-mentioned glimpses showed you how ERC6551 impacts the future of NFTs. To enrich your mind with upgrading factors, the use cases of this token standard will assist you further.
Use cases of ERC6551
Any token will get identified in the crypto space majorly because of its characteristics and possible use cases.
Therefore, activating ERC6551 tokens for improved business integration is not a difficult process. However, you might be wondering how it happens. In this regard, the following section has the answer.
The above infographic depicts how the ERC6551’s characteristics make the Non Fungible token credible to obtain the maximum practical usability for different industries. Accordingly, the following are the industrial sectors that highly benefited from ERC6551 NFTs,
- Gaming
- Art collectibles
- Music
- Real estate
- Marketplaces
- Finance
- Supply chain management
- Voting and governance systems
- Crowdfunding
- Healthcare
The arrival of the ERC6551 token has put a hold on the limitations of various industries by meeting the maximum capacity of the industries. So for startup businesses, this token standard expands its potential for earning.
However, is it the only benefit to Create an ERC6551 token for your business? Definitely ‘NO’. To get clear on this, have a look at the…
Benefits of the ERC6551 token
Benefits are essential things that most business people use to evaluate their business growth. With the collaboration of the ERC6511, the NFT is now capable of delivering more business benefits. In accordance with that, the following are the benefits of creating ERC6551 tokens for businesses.
Easy Interoperability
Elimination of interoperability makes the Non-Fungible Token easily interact with other smart contracts and assets. This greatly extends the token’s ability to bind with dapps and other decentralized platforms. As a result, the increased functionality builds up a potential base for NFT businesses that we discussed in the use cases.
Improved Security
Though Non Fungible tokens are protected by blockchain technology, ERC6551’s smart contract keeps them away from security threats like hacking. So whatever the NFT business you are going to involve, you need not worry about your business security.
Scalability
The smart contract wallet functionality improvises the Token Bound Account standard to larger outreach. So scalability is not an issue in any Non-Fungible Token based businesses. Even if you go for long-scale NFT Marketplace businesses similar to OpenSea, the scalability is not a matter of any cost.
With the above-mentioned benefits, the ERC6551 token serves the purpose, it is designed. The crypto world is moving ahead of its counterparts in terms of the industrial revolution. In this ethnicity, the search for betterment will never ever settle down. Accordingly, the NFT businesses will face a major changeover in parallel with industrial developments.
Here, the only way to survive in this business lineup is to be updated with the relevant technologies. Therefore, creating an ERC6551 token is not an expenditure; but a vital investment to keep your NFT business revised.
So as a business aspirant, have you thought deeper about how to get started? I am here to assist you.
How to create an ERC6551 token?
The ERC6551 is now slowly gaining the attention of business people. But it doesn’t attain the complete setup like the popular token standards ERC20. Still, expert people are experimenting with this token standard to make them more appealing to NFT businesses. However, you are in need of creating ERC6551 NFT tokens to build the groundwork for your business. So overall, what would be the perfect solution here is to get connected with a Prominent NFT Development Company.
NFT-based businesses meet frequent upgrades with respect to trending business innovations. To meet up, the NFT token you create should be viable for supporting the upgrades without compromising your business objectives. That you can achieve this with an expert team of developers from a reputed NFT development company. They can resolve the issues in NFT development and help you launch your business on a progressive path.
Concluding Thoughts
So far we have seen about Token Bound Account standards — ERC6551 from the basics to creating them to achieve maximum NFT business benefits. The highly competitive business scenario pushes business people to get updated technologically. Regarding that, I hope this blog has cleared all your doubts about the ERC6551 token and its appealing business usage. So get connected with a reputed NFT development company to create ERC6551 token and begin your NFT business with their experts’ guidance.
