What are NFT standards and how to choose one?
Non-fungible tokens (NFTs) are digital tokens with unique IDs that allow them to associate themselves with particular on-chain addresses. They also have comprehensive metadata that makes them an ideal instrument for confirming ownership of assets. NFTs are being applied to physical and virtual assets to monetize their value.
NFTs are primarily used in the metaverse, video games, real-estate and collectibles. In this guide, we will explain the different token standards and respective smart contracts on Ethereum and other blockchains. Check our guide to learn more about NFT.
A token standard defines the smart contract and features that the token issued by it has. There are many different standards on different blockchains. The simplest categorization would be between fungible and non-fungible tokens.
Over time, Ethereum has gained more and more popularity and now most NFTs are issued on this blockchain. Ethereum token standards start with the abbreviation ‘ERC’ (Ethereum Request for Comments).
ERC-20 – fungible tokens. ERC denotes a set of rules that help developers improve the process of creating a standard Ethereum-based token, while ‘20’ is the unique identification number for the proposal.
In fact, ERC-20 tokens are smart contracts that provide great flexibility and functionality. The rules of this protocol must be followed in order for the token to interact with other tokens within the network. They can act as certificates, cryptocurrencies or stocks.
The main difference between ERC-20 and other cryptocurrency standards is that it is tied to Ethereum and can only be used within this network.
ERC-20 tokens function like a regular cryptocurrency, but they are still tokens. ERC-20 works specifically on the Ethereum blockchain; therefore, commissions are written off during transactions and gas fees directly depend on the network's load. To learn more about gas, please, read our guide.
ERC-20 can be used as a financial asset, utility asset or currency.
Here are more token standards of the Ethereum blockchain.
- ERC-721 – non-fungible tokens
- ERC-223 – much like ERC-20 but with a feature that ensures the tokens are only sent to compatible addresses. This prevents loss of access to the tokens since they cannot be retrieved from incompatible addresses.
- ERC-827 – allows the approval of fungible token transfers so the tokens can be spent by an on-chain third party.
- ERC-777 – an improvement on ERC-20. Users can send tokens on behalf of different addresses.
- ERC-1155 – a smart contract that allows users to manage Ethereum tokens of many types. It can contain ERC-20 or ERC-721 tokens and it works for all types of assets: fungible and non-fungible.
- ERC-1137 – a token standard designed for recurring payments. It works well for subscriptions requiring payments at certain intervals.
- ERC-998 – a smart contract that allows users to merge several NFTs into one NFT.
- ERC-875 – a smart contract that allows users to transfer several NFTs in a single transaction.
- ERC-865 – a smart contract that allows users to pay for a transaction with tokens instead of gas.
The most popular non-fungible token standards on the Ethereum network are ERC-721 and ERC-1155. The NFT STARS platform features the ERC-721 and ERC-1155 standards. ERC-1155 is more commonly used for collections of several different NFTs. The ERC-721 standard is used for single NFTs.
ERC-721 tokens on Etherscan
ERC-721 creates non-fungible tokens for single assets. The token has extensive meta-information and can record transaction history.
The main goal of ERC-721 is to register copyright ownership. Another important function of this token standard is its ability to facilitate royalty payments associated with each resale of the NFT, since it can record transaction history.
Avalanche C-Chain acts like Ethereum and is compatible with Ethereum’s smart contracts. Users can create NFTs of the ERC-721 standard on Avalanche. The NFT STARS platform also plans to use Avalanche.
ERC-1155 is a universal token standard for the Ethereum blockchain because it is compatible with both fungible and non-fungible assets. With it, you can create and manage tokens of different standards in a single transaction. The only downside of ERC-1155 tokens is that they cannot record transaction history as the assets used in an ERC-1155 smart contract have their own transaction histories that are unrelated to ERC-1155.
The ability to transfer multiple assets in a single transaction is one of ERC-1155’s big advantages over many other standards, helping to significantly reduce network congestion and lower gas prices considerably. A transfer rate of 155 assets per second was achieved using ERC-1155 tokens.
ERC-1155 is a token standard that can include an infinite number of ERC-721 and ERC-20 tokens. This token standard was originally created for games in 2018 but it started being used for many other purposes, due to its versatility. Two use cases that ERC-1155 can offer is an escrow service and the atomic exchange of multiple ERC-20 and ERC-721 tokens.
Binance Smart Chain has a built-in Ethereum Virtual Machine, which makes it interoperable with Ethereum.
BEP-721 is like ERC-721 but on Binance Smart Chain.
BEP-721 offers all the benefits that come with BSC:
- Low fees compared to Ethereum (around 20 cents per trade)
- Faster transactions
Therefore, if you want to trade NFTs and pay less gas, BEP-721 is a great solution.
BEP-1155 is like ERC-1155 but on Binance Smart Chain.
- The ability to issue several unique tokens at once in one smart contract
- Tokens can be both fungible and non-fungible
- Support for atomic swaps
- Support for ’batch’ transactions
- There is no need to wait for the block to be created to complete the transaction.
This standard is the most suitable for blockchain games since it was created for them. However, it has also been useful in other industries, namely the art industry.
And just like BEP-721, it has all the benefits of the Binance Smart Chain blockchain.
TZcolors – the first NFT project on the Tezos blockchain
TZIP-12 – supports various token types and allows users to manage fungible and non-fungible tokens.
This token standard is used on the Tezos blockchain. Its main feature is the ability to embed a hash from IPFS into a Tezos-based token.
Despite a number of advantages, the token standard is not very popular and has rather few unique assets based on it. However, if you decide to buy a TZIP-12-based NFT, you will pay a very small fee, which makes this blockchain quite user-friendly.
The Flow blockchain on the NFT market
Flow is a special blockchain designed specifically for collectibles and games. The very popular NBA Top Shot uses this blockchain.
Flow has its own NFT standard which is the equivalent of ERC-721. Transactions on Flow are much cheaper and faster than on Ethereum. This blockchain is perfect for artists and NFT developers because it was specifically designed to work conveniently with non-fungible tokens.
Release of TRON’s TRC-721 standard
TRC-721 – non-fungible tokens. This NFT asset standard is equivalent to ERC-721 on the Tron blockchain.
Like ERC-721, all TRC-721 tokens have unique IDs, the main distinction being the very low costs of using TRC-721 compared to ERC-721. Transactions within the Tron network rarely ever reach one dollar, so it is very cost-effective.
To create assets based on TRC-721, you must have at least 350 TRX in your balance. The name and ticker of the NFT can be customized upon its issuance.
Our platform uses the ERC and BSC (coming soon) standards. ERC-1155 is used for collections consisting of several different NFTs. The ERC-721 standard is used for single NFTs.
Click on NFTS (ERC-721) or NFTS (ERC-1155) to create a single collectible to sell. Set its price and choose whether you want to sell it via at a fixed price or during an auction. In our guide, we explain what drops are on the NFT STARS platform.
To create your own token using the ERC-721 or ERC-1155 token standards, add the token name, symbol and choose the number of copies you want to sell.
In the future, we plan to increase the number of standards we use.