Future Primitive, a Web3 development studio led by the founding team member of CryptoKitties/Dapper Labs and the co-founder of Bitski, has recently launched a new primitive called Token Bound Accounts (ERC-6551). This new feature provides every NFT with its own unique account/wallet address. Let’s explore what ERC-6551 is and how it works.
ERC-6551 is a proposal for a new way to link NFTs with a smart contract wallet, allowing for more control and flexibility over assets. This protocol is called “Token bound accounts” and allows each NFT to have its own wallet address. This means that NFTs can control assets and work with applications as independent agents in the Ethereum ecosystem. This protocol does not require changes to the original ERC721 contract or any transactions from the owners, and allows NFTs to own ETH and other tokens. It has the potential to power new use cases such as NFT member engagement/loyalty programs, PFPs as true on-chain identities, and new game mechanics involving digital outfits and items.
The current problem with NFTs is that they mostly derive their value from external activities and speculation. The NFT standard has remained unchanged since 2017, with little on-chain interactivity beyond scarcity. However, ERC 6551 or token bound accounts can provide a new ownership layer on top of all existing and new NFTs, enabling new use cases. ERC-6551 improves NFTs by giving them their own wallet addresses and allowing them to interact with other things on the Ethereum network. With ERC-6551, each NFT has a unique on-chain identity that can be verified, so you can see its history directly from the NFT itself. It’s also easy to use and can be added to existing marketplaces, wallets, and dapps.
What makes ERC-6551 Unique?
Unlike other similar proposals, ERC-6551 offers an implementation that prioritizes ease of use and adoption. With ERC-6551, project owners do not need to take any action, wrap contracts, or modify the ERC-721 standard. Moreover, every ERC-721 and ERC-1155 NFT is compatible with ERC-6551, enabling users to start using ERC-6551 right away without deploying a new contract.
With such an implementation, rather than building a new type of ERC-721 that is not compatible with the existing ERC-721, ERC-6551 offers a better solution.
The system of ERC-6551 has two main components: a registry for deploying the accounts and an interface for their implementation.
The registry is a contract that creates token bound accounts and computes their addresses.
The account interface defines the functions that each token bound account implementation must have. These functions include the ability to receive Ether and execute calls, as well as returning information about the ERC-721 token that owns the account.
Below are some use cases. However, the possibilities are unlimited.
- Inventory system for owning items, outfits, and equipment.
- Community loyalty or reputation systems: With ERC-6551, transactions or behaviors can be recorded on the ERC-721. If the membership card is transferred, the loyalty points will go with the card.
- Mint or curate baskets of assets (art, collectibles, DeFi).
- Composable media structures (stems to songs, art layers to paintings, digital textiles to garments).
- New on-chain game mechanics: With ERC-6551, game design and mechanics will be completely different.
- On-chain meme/derivative economies.
- NFTs as onboarding vehicles instead of wallets.
It’s exciting to think about the potential of ERC-6551 and how it can transform the NFT ecosystem. Giving NFTs their own on-chain identities and wallets opens up new possibilities for them to interact with other protocols and assets, which could be really useful for loyalty programs and personalized avatars in games. I believe that this new standard will revolutionize the way we think about NFTs and their capabilities. While ERC-6551 is still in its early stages, I’m eager to see how it evolves and how it can be integrated with other protocols in the future.
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