ERC-6551: A Game Changer for Turning NFTs into Ethereum Accounts

ERC-6551 is a new token standard that was launched on the Ethereum mainnet on May 7, 2023. It significantly enhances the functionality of ERC-721 NFTs, allowing them to operate as independent smart contract accounts, making them more versatile and practical than ever before.

The Basics of ERC-6551

correlation

ERC-6551 greatly expands the application scope of NFTs by granting each ERC-721 token the full functionality of an Ethereum account while maintaining compatibility with existing ERC-721 contracts. This is achieved by deploying a unique smart contract account for each ERC-721 token, known as a "token-bound account."

implementation mechanism

The ERC-6551 system mainly consists of two parts:

1. Permissionless registry for deploying token-bound accounts
2. Standard interface for interacting with these accounts

functions and applications

With the ERC-6551 standard, NFTs can now perform all the functions of a regular Ethereum account. For example:

• Store other NFT
• Trade ERC20 tokens
• Interact with web3 applications

In the gaming field, players can store the wearable devices collected in the game within their character NFTs, instead of in a conventional wallet. This is not only more interesting psychologically but also brings new possibilities to the NFT market, such as the overall sale of characters and their equipment.

In addition, ERC-6551 allows NFTs to have multiple token-bound accounts and supports multi-chain operations, bringing more innovative possibilities to the NFT ecosystem.

Notes

1. Not all NFT projects support ERC-6551. Projects that do not rely on the ownerOf method (such as CryptoPunks) are incompatible with this standard.

2. Security Risks:

   • Fraud risk: Users may sell an NFT that allegedly holds assets, but withdraw the assets after the transaction.
   • Ownership Cycle: NFTs may be transferred to their own token-bound accounts, resulting in assets being permanently inaccessible.

These security issues need to be addressed at the market level or through external smart contracts.

Industry Insights

Multiple industry experts have expressed a positive attitude towards ERC-6551, believing that it opens up new possibilities for the application of NFTs and on-chain identity.

How to use ERC-6551

Tokenbound is an open-source toolkit centered around the ERC-6551 standard, providing an interface for deploying and interacting with ERC-6551 accounts. Users can deploy token-bound accounts for their NFTs in a few simple steps.

Conclusion

The emergence of ERC-6551 is an important milestone in the NFT field, as it not only enhances the multifunctionality of NFTs but also brings them closer to real-world application scenarios. This innovation is expected to trigger a new wave of experimentation and innovation in the coming months, making it worth closely monitoring its adoption and development.