Creating Your NFT Project: Selecting Ethereum Token Standards & Crypto APIs Services

NFT stands for a non-fungible token which in its simplest form is a digital representation of an artwork, video or media which is unique and has no other duplicates. The first NFT was first mined on the blockchain in 2014 with its own unique code and metadata to distinguish itself from other assets. Since then, the NFT market has been exponentially growing due to a very popular demand from creators, developers, collectors, traders and others. 

In this competitive environment organizations and builders that are looking to create, scale and optimize their NFT projects may face a lot of challenges. This is where Crypto APIs' comprehensive blockchain infrastructure can be very helpful as we respond to this ever growing demand with a set of services that can help you attain your goals, even if you are building or managing an NFT marketplace. 

Continue reading to find more about our solutions and to understand the role of the ERC-1155 and ERC-721 token standards in the NFT market. 

ERC-1155 & ERC-721 Token Standards

The Ethereum network is the leading blockchain protocol which developers and businesses utilize to create new digital assets. The first token standard that was introduced to the Ethereum network is the well known ERC20, widely used during the ICO/IEO/STO era, and it still continues to be among the preferred token standards. 

An inherent outcome of the Ethereum network's evolution was the emergence of ERC-721. ERC-721 enables the creation of distinct and one-of-a-kind tokens, making it an excellent choice for crafting non-fungible tokens (NFTs) that cannot be duplicated. In contrast to the widely adopted ERC-20 standard, ERC-721 is designed to represent ownership of a particular asset, whereas ERC-20 assumes the fungibility of tokens, permitting them to be exchanged interchangeably.

After the introduction of the ERC-721 standard, the ERC-1155 token standard emerged, offering a fresh and refined set of attributes. However, it's important to note that the launch of ERC-1155 did not constitute a direct upgrade to the existing token standards. Instead, it introduced specific technical advantages and provided developers with some unique benefits, positioning ERC-1155 as more of an alternative to ERC-721 rather than a direct improvement.

Specifics of the ERC-721

The ERC-721 was first introduced through a submission to the Ethereum Improvement Proposals (EIP) in 2018. This token standard allows implementation of a standard API for NFTs within smart contracts with functionalities of tracking and transferring. As outlined in the EIP proposal, the ERC-721 is concerned with digital assets in the form of three main categories. The first category is physical properties, including artwork produced by creators as well as real estate - land, houses, flats etc. Second category is virtual collectables, covering all digitized collectables, including the well-known CryptoKitties project. The last category encompasses negative value assets in the form of loans, financial burdens and other responsibilities.  

Specifics of the ERC-1155

There are disputes whether this token standard is all about gaming, because the main reason for its creation and submission to the EIP was claimed to be the inability of ERC-721 to provide enough flexibility needed for gaming items. It was found that, for instance, the ERC-721 was failing at broadcasting batch transactions. 

If multiple non-fungible tokens were to be transferred with the ERC-721, the sender would need to send each one of them as a single transaction. Each transaction is associated with transaction costs and the multiple transactions are a premise for network congestion. On the other hand, if transactions were to be made via ERC-1155 standard, the sender could send hundreds of NFTs at the same time, and pay a single transaction fee. This is not only cost-effective, but it is also significantly quicker for the sender.  

The ERC-1155 is also widely accepted as a multi-token standard, as it supports not only non-fungible tokens, but it also works with fungible. To illustrate how this concept works best in practice, let's imagine that we need to make in-game payments. Payments can be cleared with fungible assets on the address of the recipient. To the same address, the ERC-1155 allows sending NFT assets. 

Another key distinctive characteristic of ERC-1155 is that it supports the so-called semi-fungible tokens (SFTs). In essence, SFTs represent fungible tokens which convert into non-fungible once they are transferred and redeemed. 

There is another very specific to this standard feature, and this is the support of semi-fungible tokens (SFTs). An example of an SFT could be an event ticket which is deemed fungible prior to the actual event. It is fungible, as the ticket provides identical entry to the event as any other ticket will. Once the event is over, the ticket loses its financial value, but it can be kept as a souvenir; an item of memorabilia which is unique. This is the functionality that the SFT can provide to enable “transformation” and flexibility over assets.  

Last, but not least - the ERC-1155 can fix human errors in terms of cancelling and reverting a transaction. This feature is not available with the ERC-721 in case assets were sent to the wrong recipient/wrong address.  Through the “safe transfer function” a series of rules are introduced with the ERC-1155 which take place to provide flexibility to the assets` sender. 

What are the difference between ERC-721 & ERC-1155

Whilst both are suitable for NFT assets, and both can let you mint new non-fungible tokens, the number of differences is not that low. Some of the key differences we already covered above, such as the support and creation of semi-fungible and non-fungible tokens in ERC-1155 (only NFTs are supported in ERC-721); There is the option to place batch transactions and save money (from transaction fees) and time with ERC-1155. If you want to use the other token standard, you will need more time, and must pay gas fees on each transaction, as batch transactions are not allowed. 

There are two other differences between the two standards. The first one is that smart contracts are linked to multiple URLs in ERC-1155, and they do not store additional metadata. Additional data is, however, stored with ERC-721, which increases deployment costs and limits flexibility. The second difference is the support of tokens that these standards provide. The ERC-721 requires new smart contracts for each new token that is or will be issued. With the ERC-1155, this is the opposite, as there is constant support on an infinite number of tokens. 

What is next If I am an NFT project creator?

From the discussion above it is clear that there are certain differences between the two token standards.  Our advice would be to thoroughly examine both prior to starting your work on your project. If you have already started building it, and have chosen the token standard that you may need - this is great news.

It does not matter at what stage of building your project you are as we can support you with our infrastructure services from the start to the very end. Some of our NFT-focused clients find very useful the following services that we offer

Blockchain Data

We support not only the ERC20, ERC721 & ERC1155 token standards, but all other standards that exist and are part of the Ethereum network ecosystem. Our provision of real-time and historical unified data in just several milliseconds after a request is made saves a lot of time, effort and of course - money. This service is among the most popular services and can be used by NFT marketplace clients, as well as other NFT projects which require quick access to unified real time data. 

Blockchain Events

Dealing with NFTs is normally concerned with numerous blockchain events that you and your business must keep track of. Through our automated blockchain event service, clients can get notified in real time of new token transfers (regardless if we speak about fungible, non-fungible or semi-fungible), new transactions, internal transactions and many other events for which you would like to subscribe to. The hectic manual labour is eliminated as again, similar to the blockchain data service, we return callbacks in just several milliseconds.  

Non-custodial wallets

If you are planning or already running an NFT B2B or B2C project, which requires the execution of numerous transactions, you may need to use our HD wallets, also known as non-custodial wallets. They are great for keeping a clean track of your transaction history and arrange all incoming or outgoing transactions by blockchains, by testnet/mainnet and by addresses. You need an infinite number of addresses - no problem, HD wallets can provide this to you even if you are very serious about transactions as HD wallets have the full capacity to suit your needs. 

Once your wallet is synchronized with Crypto APIs, we will automatically support the entire historical data for you, without the need to provide us your private keys and eliminate any security threats. With our flexible cost-effective plans, you will be able to pay only for the services for which you would like to opt-out and use. 

We also offer a variety of additional services, which may be the perfect solution to your business case. Contact our team for a free consultation, and start your journey into the NFT realm with our constant support throughout your way to success.