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ERC-721

Give me the basics

ERC-721 is a standard for creating unique, non-fungible tokens on the Ethereum blockchain. Each token has a unique identifier and cannot be exchanged for another token. This makes ERC-721 tokens useful for representing assets like digital art or collectibles, where uniqueness is important. They can also be used in decentralized games to represent in-game items or characters. ERC-721 tokens are widely used in the growing field of decentralized finance (DeFi) and have become a popular way for creators to monetize digital art and other unique digital assets.

In-depth explanation

The world of blockchain technology has brought about the creation of unique digital assets that can be easily transferred and traded without the need for intermediaries. One such creation is the non-fungible token (NFT), which is represented by the ERC-721 standard on the Ethereum blockchain. In this article, we will explore what ERC-721 is, how it works, and why it is important.

What is ERC-721?

ERC-721 is a standard for creating unique, non-fungible tokens on the Ethereum blockchain. Each token has a unique identifier, making it different from any other token on the network. This uniqueness is what sets ERC-721 tokens apart from other tokens, which are fungible, meaning they can be exchanged for other tokens of equal value.

ERC-721 tokens were first proposed by William Entriken, Dieter Shirley, Jacob Evans, and Nastassia Sachs in 2017. The standard was later finalized by the Ethereum community in March 2018. Since then, ERC-721 tokens have become a popular way for creators to monetize digital art, collectibles, and other unique digital assets.

How does ERC-721 work?

ERC-721 tokens are created by smart contracts on the Ethereum blockchain. These smart contracts contain a set of rules that dictate how the tokens can be created, transferred, and traded. Each ERC-721 token is unique and has its own unique identifier, which is stored on the blockchain.

To create an ERC-721 token, a smart contract must be deployed on the Ethereum blockchain. The smart contract defines the properties of the token, such as its name, symbol, and the total supply of tokens that can be created. Once the smart contract is deployed, anyone can create and own ERC-721 tokens that adhere to the rules set out in the contract.

ERC-721 tokens are traded on decentralized marketplaces, such as OpenSea, Rarible, and SuperRare. These marketplaces allow creators to sell their digital art, collectibles, and other unique digital assets directly to buyers, without the need for intermediaries like galleries or auction houses.

Why is ERC-721 important?

ERC-721 tokens have become a popular way for creators to monetize unique digital assets. They have been used to represent everything from digital art and collectibles to in-game items and characters. The uniqueness of each token makes them ideal for representing assets where uniqueness is important, such as one-of-a-kind digital art pieces.

ERC-721 tokens have also become an important part of the growing field of decentralized finance (DeFi). They can be used as collateral for loans, allowing holders to borrow against their digital assets without having to sell them. This has created new opportunities for creators and collectors to unlock the value of their digital assets without having to part with them permanently.

In conclusion, ERC-721 is an important standard for creating unique, non-fungible tokens on the Ethereum blockchain. It has enabled creators to monetize unique digital assets and has opened up new opportunities in the world of decentralized finance. As the blockchain industry continues to evolve, it is likely that ERC-721 and other NFT standards will continue to play an important role in the creation and monetization of digital assets.