Exploring ERC-1155: The Next Generation Token Standard

It’s been almost five years since Ethereum first considered the proposal for the ERC-1155 token standard. At the time, it was hailed as one of the greatest upgrades to the network. Yet today, most people don’t know what it is. 

To help change that, this article will trace its way back to the limitations of old token architects and then circle back to how ERC-1155 bypasses those limitations. 

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Popular Crypto Standards and Fungibility

As a versatile blockchain, Ethereum allows developers to launch their own tokens by using one of the many standards it has to offer. Think of these standards as a template that outlines a sketch of rules and functionalities for the token.

Out of those standards, two have emerged above all else: ERC-20 and ERC-721. 

The ERC-20 token allows the creation of fungible tokens. These are your typical cryptocurrency tokens like Shiba Inu. What makes them fungible is that one Shiba Inu will always be equal to another Shiba Inu; just as two dollar bills are equivalent in value.

On the non-fungible side of things, we have the ever-popular ERC-721. Using this standard, creators can deploy unique assets that can be more or less valuable than each other. For example, all Bored Apes from the Bored Ape Yacht Club are unique pieces of artwork and are tradeable at different prices. 

In simpler words, they are neither interchangeable nor indistinguishable, unlike dollar bills. 

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The Primary Limitation of Old Crypto Standards

A major challenge introduced by old standards is the lack of support for multiple asset types in a single transaction. Let’s look at this through the lens of an example.

If someone wants to buy a Bored Ape NFT by paying with their Ether (Ethereum currency) and USDT (Tether stablecoin), they will have to make multiple transactions. It’s not possible to send both Ether and USDT together. 

Not only does this complicate the transaction and make it more time-consuming, but it also accrues additional charges in gas fees on both networks. 

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ERC-1155 to the Rescue

ERC-1155 is essentially a paradigm shift in crypto transactions. It supports dynamic and complex transactions where any number and type of assets can be sent to any number of recipients—all in a single transaction.

Let’s say that a user wants to send an NFT and some Ether to their friend to repay a friendly loan. Let’s also assume that it’s the start of a new month and the user wants to send rent to their crypto-friendly landlord in the form of USDT stablecoin. With ERC-1155, the user will have to execute and pay for just one transaction to make all of that happen. 

As support for such complex transactions will inevitably lead to mistakes someday, ERC-1155 is one of the first standards to support reversing unintentional transfers. This is another nifty little improvement over ERC-721 and ERC-20, both of which lack any mechanism for reversals or cancellations. 

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Conclusion

While it may not be the most trendy token standard at the moment, ERC-1155 continues to offer fantastic savings in time, energy, and gas fees by combining multiple transactions into one. That’s on top of the added peace of mind that comes from the possibility of reversing unintentional transactions. 

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To see ways on how you could deploy your own ERC-1155 contracts read through our [Docs] for more information on blockchain development! 🔚😁

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