Mastering the ERC-1155 Multi-Token Standard (Part 1)
You're probably familiar with ERC-20 and ERC-721 tokens, and you might be curious about ERC-1155 and what it's all about. If you're seeking a deeper understanding of this token standard, you've come to the right place. In this article, you will be provided with a comprehensive overview of ERC-1155, covering everything you need to know about it. We'll also take a look at the projects and protocols that have adopted this standard. Furthermore, there will be a follow-up article where we'll explore the process of creating a smart contract based on ERC-1155. So, without any more delay, let's get started!
Prerequisites
Before diving into this article, it is important to ensure you have a strong foundation in the following areas:
Cryptocurrency.
Solidity Smart Contracts.
Overview of Token Standards
Token standards are a set of rules and guidelines that govern how a crypto token works. They define the basic functionality of tokens, such as how they can be transferred from one account to another, stored, and used. Token standards are important in the blockchain ecosystem because they provide a common framework for building and using tokens. This makes it easier for Web3 developers to create tokens and for users to interact with tokens from different projects like in decentralized exchanges, gaming platforms, and so on.
Token standards also help to ensure that tokens are secure and compatible with each other and with different wallets, exchanges, and other applications. Some of the most popular token standards are ERC-20, ERC-721, ERC-1155, and others, which can be found here. In this article, we will focus solely on the ERC-1155 token standard.
What is ERC-1155?
ERC-1155, otherwise known as the Multi-Token Standard, is a token standard that allows you to create and manage both fungible (ERC-20) and non-fungible (ERC-721) tokens in a single contract. This makes it a more versatile and efficient token standard than the ERC-20 and ERC-721, which require a separate contract to be deployed for each token type or collection.
If you want to work on a project such as building a ticketing platform that involves the creation of both NFTs and ERC-20 tokens, rather than deploying different contracts for this, ERC-1155 allows you to have the combined functionalities in a single contract.
As seen in the table above, the ERC-1155 standard also enables advanced features like trading multiple tokens at once, simplifying the process of exchanging tokens without the need to individually approve each token contract.
Background
ERC-1155 was proposed in June 2018 by a team of developers from Enjin and other companies. It was designed mainly to address the limitations of previous token standards, such as the inability to represent both fungible and non-fungible tokens in the same contract.
The History and Development of ERC-1155
ERC-1155 was approved by the Ethereum community in December 2018 and was officially released in June 2019. It has since become one of the most popular token standards on the Ethereum blockchain and is used by a wide range of projects, including gaming platforms, NFT marketplaces, and other applications. Another popular gaming platform that uses the ERC-1155 token standard apart from Enjin Coin is Aavegotchi.
Aavegotchi uses ERC-1155 to represent in-game assets, such as wearables, consumables, and resources. Check out the platform here.
Advantages of ERC-1155
Here are the key advantages of the ERC-1155 token standard:
It is versatile, accommodating fungible, non-fungible, and semi-fungible assets, making it suitable for gaming, collectibles, and many other applications.
ERC-1155 allows users to transfer multiple types of tokens in a single transaction, reducing gas costs and improving transaction efficiency. This is because ERC-1155 contracts can represent multiple token types in one contract, reducing the need for multiple transactions.
It is compatible with a number of different blockchains, including Ethereum, Polygon, and Avalanche, which makes it very easy to port ERC-1155 tokens to other blockchains.
How ERC-1155 Works
Now that we've talked about the basics of ERC-1155, like what it can do and how it has changed over time, let's take a closer look at how it's built and how it stores information. This will help you see how you can use it effectively in your own project.
ERC-1155 contracts use a number of different data structures to track tokens and balances.
Token IDs
These are unique identifiers (id) that are assigned to each token. Token IDs are used to track the ownership and transfer of tokens. For example, you can check out the details of this Aavegotchi NFT on polygon here, including its token ID.
Balances
Balances track the number of tokens that each address/account owns. They are kept separately for each token type. If you want to retrieve multiple balances in a single call, you can pass the array of owners, followed by the array of their token IDs.
For example, given the IDs=[2, 15, 6, 8] of a token type and its accounts=[0x6335..., 0x1337..., 0xe4f5..., 0x733a...] respectively, you will get their return value as an array of values.
Metadata
This is additional information about a token, such as its name, description, traits and image.
Metadata is optional, but it is often used to make tokens more user-friendly.
To use the ERC-1155 standard in your smart contract, you need to do some basic things like minting tokens, transferring tokens, and checking token details. Here's a list of interfaces every smart contract implementing the ERC-1155 standard must implement:
The supportsInterface function in ERC-165. This takes an interface ID in bytes as an argument. When you provide the interface ID for ERC-1155, which is represented as 0xd9b67a26, the function will return the constant value true through the
interfaceIDparameter.
2. All functions in the ERC-1155 interface.
TransferSingle: This event is used to transfer a single type of token from one address
(_from)to another address(_to). Wherever it’s being used, It emits a TransferSingle event to reflect a change in token balance.TransferBatch: This is similar to TransferSingle, but it is used for the transfer of multiple types of tokens in a single function call. It emits a TransferBatch event to reflect the balance changes for all the transferred tokens.
ApprovalForAll: It emits an ApprovalForAll event to indicate the change in approval status for a third-party address
(_operator)to manage all tokens for a specific owner address(_owner).URI: This event is emitted when the URI is updated for a specific token ID. URIs are used to point to JSON files that conform to the ERC-1155 Metadata URI JSON Schema.
safeTransferFrom: Safely transfers a specified amount of a token with a given ID from one address
(_from)to another address(_to). It checks various conditions, including approval, balance, and whether the recipient is a smart contract. It emits a TransferSingle event.safeBatchTransferFrom: Safely transfers multiple types of tokens in a batch from one address
(_from)to another address(_to). It checks various conditions for each token type, emits appropriate events, and handles transfers to smart contracts.balanceOf: Retrieves the balance of a specific token ID owned by a particular address
(_owner).balanceOfBatch: Retrieves the balances of multiple token IDs for multiple addresses in a batch, returning an array of balances.
setApprovalForAll: Allows an address
(_operator)to be approved or revoked for managing all tokens owned by the caller. It emits the ApprovalForAll event upon success.isApprovedForAll: Checks whether a specific operator address is approved to manage all tokens for a given owner address and returns a boolean value indicating the approval status (either true or false).
These functions and events altogether define the ERC-1155 Multi-Token Standard, which tracks the management and transfer of multiple types of tokens within a single smart contract interface.
3. All functions in the ERC1155Token Receiver interface to accept transfer.
onERC1155Received: This function is to be called by an ERC-1155-compliant smart contract when it receives a single ERC-1155 token type. It is usually called at the end of a
safeTransferFromoperation. The function must return bytes4(keccak256("onERC1155Received(address,address,uint256,uint256,bytes)")) (i.e., 0xf23a6e61) if it accepts the transfer. It must revert if it rejects the transfer. Any other return value will result in the transaction being reverted.onERC1155BatchReceived: is used when the receiving contract expects to handle multiple ERC-1155 token types in a batch. It is called at the end of a
safeBatchTransferFromoperation. The function must return bytes4(keccak256("onERC1155BatchReceived(address,address,uint256[],uint256[],bytes)")) (i.e., 0xbc197c81) if it accepts the batch transfer. LikeonERC1155Received, it must revert if it rejects the transfer, and any other return value will result in transaction rejection.
These two functions define how a smart contract should handle the receipt of ERC-1155 tokens, whether received individually or in batches and provide a standardized way to interact with ERC-1155 tokens.
Additional Use Cases for ERC-1155
ERC-1155 has a number of additional use cases beyond gaming and NFTs, including:
Fractional ownership of assets: ERC-1155 can be used to represent fractional ownership of assets, such as real estate or even stocks and bonds. This can make it possible for people to invest in assets that they would not otherwise be able to afford. Let's take an example of fractional real estate ownership, where the company uses ERC-1155 to represent shared ownership of real estate. This approach allows people to invest in real estate with as little as $100.
Asset management and collateralization: ERC-1155 can be used to manage and collateralize assets in DeFi applications. The platform Aave is using ERC-1155 to manage and collateralize assets in its DeFi applications. For example, It allows users to deposit ERC-1155 tokens as collateral for loans.
These are just a few other examples of the many different ways that ERC-1155 is being used in DeFi.
Conclusion
In this article, we covered the basics of the ERC-1155 standard, including what it is, its important features, advantages, and real-world applications in areas like gaming, DeFi, and cross-platform compatibility. In the next part of this article, we'll explore how to create an ERC-1155 smart contract to help you understand how to use it in your own projects.
As we finish this first part, it's evident that ERC-1155 has opened up exciting possibilities in the digital assets world. Its ability to connect different industries and manage tokens efficiently has made it an important part of blockchain technology. I encourage you to explore and innovate further with ERC-1155. For those interested in delving deeper into ERC-1155, I recommend referring to the sources and documentation mentioned in this article for valuable insights. Ensure you keep an eye out for the next tutorial on ERC-1155.