What are ERC721 Tokens
ERC721 tokens are tokens that represent ownership of a unique item or piece of content on the Ethereum network. Introduced in 2017 by the Ethereum community, the ERC721 standard defines a set of rules that make it possible to create and manage non-fungible tokens (NFTs). Unlike fungible tokens, where each unit is interchangeable (like Ethereum or USDT), each ERC721 token has distinct properties and value, allowing them to represent unique digital items such as artwork, collectibles, and in-game assets.
The rise of ERC721 tokens has been closely linked to the popularity of NFTs, which exploded in popularity starting in 2020. These tokens are often used in various applications, including digital art marketplaces, virtual real estate, and gaming, where ownership and authenticity of digital assets are crucial. The flexibility of the ERC721 standard has enabled developers to create a diverse range of NFT projects, contributing to the broader adoption of blockchain technology.
Where are ERC721 Tokens used?
Non-Fungible Tokens (NFTs) created using the ERC721 token standard can represent a wide variety of assets, including:
Art: These tokens represent ownership of unique artworks, such as those sold on platforms like OpenSea or Rarible.
Game Assets: Tokens that represent unique items or characters within video games, such as CryptoKitties or Axie Infinity.
Virtual Real Estate: Tokens that represent ownership of parcels of land in virtual worlds, such as Decentraland or The Sandbox (although The Sandbox has transitioned to using a more advanced token standard, ERC1155).
How do ERC721 Tokens work?
ERC721 tokens function using smart contracts on the Ethereum blockchain, which enforce the rules of ownership, transfer, and define metadata associated with each token. Each token is identified by a unique
tokenId, allowing them to be distinguished from one another. The metadata for an ERC721 token most commonly includes attributes such as name, description, and a URI that links to an image or other details about the asset. Metadata is usually stored off-chain, either on a centralized server or a decentralized storage system like IPFS.The
metadata and uri functions in the ERC-721 token are two ways of adding metadata to a token. The metadata function provides the actual metadata information for a specific token, while the uri function provides the location (URI) where the metadata can be fetched. When creating an ERC721 token, developers define the structure and content of the metadata that the metadata function will return, as well as the URI returned by the uri function.When an ERC721 token is created, it is minted through a smart contract, which assigns the token ID to a specific owner. The ownership is recorded on the Ethereum blockchain, ensuring its immutability and transparency. The
ownerOf function was introduced with the ERC721 token standard to track ownership: when called, it returns the address of the current owner of a specific token. Owners can change quite frequently, as users can buy, sell, or trade these tokens using decentralized exchanges or NFT marketplaces, and the smart contract handles all aspects of the transfer process.What are some of the examples of ERC721 Tokens?
CryptoPunks: one of the earliest and most well-known NFT collections, launched in 2017. It consists of 10,000 unique pixel art characters, each with its own distinct attributes and rarity. CryptoPunks are built on the Ethereum blockchain and use the ERC-721 token standard to represent the unique digital assets.
Bored Ape Yacht Club (BAYC): a highly successful NFT collection featuring 10,000 unique cartoon ape avatars. Each Bored Ape is an ERC-721 token with its own set of traits and characteristics, making each one unique. The BAYC collection has gained significant popularity and recognition in the NFT and broader crypto communities, especially after launching its own fungible ERC20 token, ApeCoin.
CryptoKitties: one of the earliest and most well-known NFT-based games, launched in 2017. The game allows users to breed, collect, and trade unique digital cats, each represented as an ERC-721 token. CryptoKitties was one of the first mainstream applications to demonstrate the potential of NFTs and the ERC-721 standard.
