The most prevalent tokens on the Ethereum blockchain are ERC-20-compliant (ERC-20 Tokens). However, there are many other ERC, or Ethereum Request for Comment, standards available. Recently, companies like Launch Labs, Inc. d/b/a Axiom Zen (Axiom Zen) have launched new endeavors utilizing ERC-721-compliant tokens (ERC-721 Tokens). ERC-721 Tokens each have unique characteristics, unlike fungible ERC-20 Tokens.
This post will discuss the rise of CryptoKitties, the exciting aspects of ERC-721 Tokens, and possible use cases for ERC-721 Tokens.
The CryptoKitties Revolution
Axiom Zen pioneered the ERC-721 standard for non-fungible tokens, which ultimately led to their application, CryptoKitties. CryptoKitties is an exemplary use case for how companies can utilize the ERC-721 standard. Each CryptoKitty is a ERC-721 Token that is one-of-a-kind and owned by the purchaser; it cannot be replicated, taken away, or destroyed. CryptoKitties can be purchased with Ether in descending-clock auctions. Owners can then “breed” the CryptoKitties, resulting in a completely new CryptoKitty, which is a new one-of-a-kind ERC-721 Token. The “genetic” makeup of the child ERC-721 Token is a combination of the genetic makeups of the two parent ERC-721 Tokens. The ERC-721 Tokens’ uniqueness allows for the creation of a whole new category of crypto creations. The ability for users to combine ERC-721 Tokens to generate completely new, but genetically traceable, ERC-721 Tokens allows for self-sustaining, growth-oriented networks.
Since the birth of CryptoKitties, there are now over 100 CryptoKitty variants. Blockchain users can now buy, sell and trade a myriad of self-created digital collectibles, from cats to dogs to cartoons. While the proliferation of copycats (pun intended) does not show any signs of slowing, there are many other possible uses for ERC-721 Tokens. Below we discuss a few of those use cases.
Many companies followed CryptoKitties into the blockchain game silo. New basic games are popping up around other digital collectibles, such as trading cards, which allow the movement of physical collectibles into the virtual space. These games and other CryptoKitty adaptations prove ERC-721’s utility in basic gameplay. But now there is room to see if the ERC-721 standard can be utilized on more sophisticated gaming platforms. Some smaller gaming companies recently started to create more comprehensive games and universes with ERC-721; however, the big gaming companies have yet to include this technology on their platforms. Nonetheless, we can see the potential opportunity to grow new gaming universes and expand or extend existing franchises utilizing ERC-721 Tokens.
One of the touted promises of blockchain technology is the blockchain’s ability to ensure product authenticity. With ERC-721 Tokens, in conjunction with a blockchain, users can help prove non-fungible product authenticity. For example, if an art gallery owner encoded an ERC-721 Token into each gallery painting, the token could track everything from the painting’s original artist to its current owner. As a result, the token would allow artists to easily copyright their works. It would also ensure buyers that they own authentic products. ERC-721 is thus useful to individuals who want to protect their intellectual property and to individuals concerned about product authenticity.
ERC-721 Tokens allow for the creation of unique avatars, but at present there is no way for these avatars to interact, aside from breeding. Including a social interaction layer could dramatically increase the usability of the avatars and help enhance the growth of the ecosystem in which the avatars reside.
We are at the forefront of not only a CryptoKitty revolution but also a ERC-721 revolution. Yes, ERC-721 offers application developers the ability to create fun, cute games. But, like other uses of blockchain technology, ERC-721 offers an opportunity to find solutions to complex real-world problems. As we push forward into the ERC-721 space, we must be cognizant of the endless possible uses for this new token standard.
We believe the future is bright for ERC-721 Tokens and we look forward to helping companies develop thriving businesses utilizing this token standard.