In my previous column on NFTs (non-fungible tokens), I discussed the main current standard for this technology: ERC-721. It’s one of the most used digital collectibles – from CryptoKitties to the Bored Ape Yacht Club. But I also mentioned an emerging standard, ERC-1155, which has become the go-to standard for NFTs in blockchain games. To find out more, I contacted one of the creators of ERC-1155, Witek Radomskythe co-founder and CTO of a blockchain game development platform called Enjin.
While ERC-721 is a standard for “non-fungible” tokens (meaning each token is unique), ERC-1155 is “fungibility agnostic” (meaning it covers both fungible tokens and non-fungible tokens). This flexibility makes it suitable for games – an in-game coin, for example, would likely be fungible, while a plot of virtual land would not be fungible.
Technically, ERC-1155 won’t necessarily be used to create an “NFT”, as it won’t always be non-fungible. But rather than getting bogged down in semantics, suffice it to say that ERC-1155 and ERC-721 are the basis of the token economy in Web3.
Enjin’s Evolution from Minecraft to Blockchain
Radomski’s company, Enjin, has been in business since 2009 – long before Web3 hit the scene. So I started by asking what was Enjin’s goal in 2009 and why did he eventually pivot into crypto?
He replied that it started as “a platform for players to create community websites for their Minecraft clans, guilds and servers – without having to hire a developer”. One of Enjin’s paid features in 2009 was an “integrated Paypal donations module”, so even then it flirted with payments. When the blockchain appeared a few years later, Enjin realized that it could enable all kinds of transactions via cryptocurrency tokens.
“We saw an opportunity to give game developers new tools to gamify and add real savings to their games using blockchain,” Radomski said. “We started working on this before ‘NFTs’ were a concept (we called these tokens ‘custom coins’ back then).”
“[ERC-1155 is] really like an NFT and fungible token vending machine, with advanced usability features and features like batch transfers to enable efficient large-scale blockchain games and applications.
Witek Radomski, co-creator of ERC-1155
ERC-721 was released in early 2018, and the first draft of ERC-1155 followed soon after in June 2018. It was officially accepted by the Ethereum community in June 2019. I asked Radomski what the initial motivation was to create ERC-1155?
“Given our experience in gaming, we wanted to create a symbolic standard around real games and their item economies, which include both fungible and non-fungible items,” he said.
None of the existing Ethereum token standards, ERC-20 (the original standard) or ERC-721, were suitable for this use case.
“None of these standards would allow you to build a game with hundreds of thousands of different assets with varying supplies and different settings for each type of asset,” Radomski explained. “ERC-1155 was designed to address these use cases. It really is like a vending machine for NFTs and fungible tokens, with advanced usability features and features like batch transfers to enable efficient large-scale blockchain games and applications.
ERC-1155 has since been adopted by all major NFT markets, Radomski explains, including OpenSea and Rarible. Enjin has also partnered with Microsoft on several NFT projects, including Azure Heroes, Microsoft’s “blockchain-based digital badge rewards program.”
Example: Adidas tokens ERC-1155
I searched for another example of ERC-1155 in the wild and quickly found an Adidas project that covers all the new tech buzzwords: Into the Metaverse NFTs.
This is a rather complicated promotion by Adidas, as there are four different phases – with ERC-1155 used for Phases 1, 2 and 3, and ERC-721 for Phase 4. Depending on which version of the NFT you purchase, this entitles you to a range of physical and digital merchandise. At the time of writing, Phase 1 had about an hour to run, and it could be purchased for 1.179 ETH (US$3,277.87).
A thread on what “Phases” mean when it comes to @adidasoriginals In the NFT metaverse.
— benmayorwhite.eth ᵍᵐ (@benmayorwhite) December 20, 2021
What is interesting from a technical point of view is that there is only one token, but nearly 22,000 owners (as of this writing). ERC-1155 was therefore clearly chosen because this Phase 1 token is fungible — which likely means that owners of the token will all receive the exact same physical and/or digital rewards. Presumably, phase 4 will be a non-fungible token, since EWRC-721 is used for this. But Adidas has yet to reveal what phase 4 will consist of.
The Adidas NFT promotion appears to be using ERC-1155 due to the fungible nature of Phase 1-3 rewards (and possibly also because ERC-1155 enables lower gas costs for users).
As for Enjin, he has bigger plans for ERC-1155 – although, like Adidas, they also involve the metaverse.
“We are firm believers in the metaverse, and NFTs are crucial to our digital identities in this evolving space where the physical and the virtual merge,” Radomski said. He briefly described a 2018 concept product from Enjin, which he said was “a gaming multiverse where developers shared a collection of items that players could use across games and platforms.”
As the Metaverse grows, he continued, and “traditional adopters and big brands with IP enter the space, standards for interoperability and protection of the rights of people and marks will be needed”. He thinks the ERC-1155 is perfectly suited for this.
“It’s a real opportunity to use contemporary technology to invent new types of gameplay and gamified business strategies.”
Radomski also believes that blockchain tokens are not limited to speculation and rights management, which I had noted as the main use cases for ERC-721.
“There is a huge, untapped well of new gameplay concepts and opportunities to gamify businesses through NFTs, in addition to this technology that is at the heart of digital identity,” he said.
Why should Web 2.0 developers care?
I ended by asking Radomski what advice he would give to skeptical Web 2.0 developers, many of whom look at the current state of NFTs (cartoon avatars, rampant speculation, etc.) and wonder why they should care about Web3 and its emergence standards?
“It’s a real opportunity to use contemporary technology to invent new types of gameplay and gamified business strategies,” he replied. “Think about what your users, who are digital natives, want: they want to be part of a digital network, rather than part of a siled and enclosed garden. By leveraging Web3, you are accessing a network in full growth of marketplaces, wallets, explorers, games and blockchains. Web3 not only gives you new tools to tap into, but also provides opportunities for growth and attracting new users in one of the most powerful networks in the world.
Whatever you think of Web3 right now, it’s encouraging to see new standards like ERC-1155 emerging. Similar to RSS3 and Ceramic’s decentralized data network, which I wrote about this year, we don’t yet know if ERC-1155 is a technology that will stick around. But if your business is online gaming or you want to add gamification to your application, then it seems worth experimenting with at least ERC-1155.