Non-Fungible Token Standards

Another type of tokens is the so-called non-fungible token (NFT). NFT means that the individual tokens are different from one another and are not interchangeable. Instead, each one is unique and therefore, can be transferred and tracked.

In the beginning, the use of NFT was mainly done through games. Meanwhile, NFTs can be found not only in games but also as a tool for digital art, as a representation of event tickets, and as part of the virtual world.

The ERC721 (https://eips.ethereum.org/EIPS/eip-721 ) standard is the basis for most NFT projects. Within the contract, each token is assigned an ID so that the combination of the token ID and the contract address is globally unique. Various events and functions are defined in the ERC721 standard, whereby in addition to the balance, transfer, and approving functions, there is also a function to find out the owner of a specific token.

Another standard that also supports NFTs is ERC 1155 (https://eips.ethereum.org/EIPS/eip-1155 ), which is a multi-token standard. This means that a smart contract with this standard can handle both NFTs and FTs. In addition, the batch transfer is enabled – several different tokens can be transferred to different addresses in one function call. This should prevent network congestion and reduce transaction costs. The details of the ERC1155 multi-token standard will be discussed in the next chapter.