Before introducing the various NFT protocols, let’s first briefly introduce the ERC and numbers in the names of these protocols, such as ERC-721 and ERC-1155.

ERC is the abbreviation of Ethereum Request for Comments, which represents the formalized proposal of Ethereum. It is a formal proposal approved by EIP (Ethereum Improvement Proposals) after various deliberations and tests by the Ethereum development team. The number after the proposal represents the proposal number, for example, ERC-721 represents Proposal No. 721, and the same applies to other proposal numbers.

ERC-721

The most common NFT protocol, compared to the ERC-20 token, is indivisible and unique, and the minimum unit is 1. From CryptoKitty to BAYC, Punks, and Doodles, they are all issued based on the ERC-721 protocol.

Each ERC-721 token is an independent individual. Each one is unique and scarce, so the biggest application attribute of ERC-721 is considered to be collection, that is, each ERC-721 corresponds to a unique collection.

The representative project of the ERC-721 protocol is CryptoKitty. ERC-721 was proposed by Dieter Shirley in September 2017. Dieter Shirley is the technical director of Axiom Zen, the company behind CryptoKitty. Therefore, CryptoKitty is also the first application to implement the ERC-721 standard.

Each CryptoKitty cat corresponds to an ERC-721 token. Each cat is different, with different genetic characteristics, such as different fur colors, different eyes, mouths, noses, etc., and different combinations of genetic characteristics (scarcity) determine the price of the cat. When it was launched at the end of 2017, CryptoKitty was so popular that it even crashed the Ethereum network. It also quickly set off a cat-raising craze in the crypto field and brought NFT into the public eye, becoming the first impression of most people on NFT.

ERC-721A

ERC-721A was optimized and improved by the Azuki team based on the ERC-721 protocol, mainly to reduce the Gas fees required by users when minting.

ERC-721A has two main advantages. First, when multiple addresses mint NFTs at the same time, the Gas fee is 50%-70% cheaper than the ERC-721 protocol (applicable when the project is publicly minted). Second, when a single address mints multiple NFTs, the Gas fee is the same as minting one NFT, which greatly reduces the cost of minting NFTs on Ethereum.

The representative project of the ERC-721A protocol is Azuki. Azuki is a 10K PFP project (i.e. an avatar project with an issuance volume of 10,000). It was officially launched on January 12, 2022 and has been well received by market users for its unique and delicate Japanese anime style.

Azuki was sold in a Dutch auction format, with the initial selling price of 1 ETH, which decreased by 0.05 ETH every 20 minutes. However, all the tokens were sold out as soon as they were launched without any price reduction, which shows how popular they are.

Azuki is one of the most active NFT communities. Azuki emphasizes the integration of online and offline. The Azuki community has its own peripheral stores. They will cooperate with trendy brands to sell streetwear, etc. Community members can enjoy discounts. In addition, Azuki also regularly holds meet-ups, exhibitions, music festivals and other live events.

ERC-1155

The ERC-1155 protocol was developed by the Enjin team and is a semi-homogeneous solution for NFT. Compared with ERC-721, the Token ID in ERC-1155 no longer represents a single item, but a category.

The ERC-1155 protocol is mainly used in games. For example, for weapons and armor in games, if the game wants to give each of the 100,000 users a weapon of the same type, if ERC-721 is used, 100,000 transfers are required, while ERC-1155 only requires one. In addition, ERC-1155 can also support the simultaneous transfer of multiple quantities and categories of assets, greatly improving the efficiency of transfers.

Unlike ERC-721, which takes up a lot of space, ERC-1155 uses less storage space on the blockchain network and the overall efficiency of transactions is higher.

A more representative project is the Enjin-based game War of Crypto. In the game, the developer uses the ERC-1155 protocol to package a batch of cards with the same attributes into a token package and set a guaranteed price for each card. Players can trade these cards freely in the game, and when players cannot find a trading partner, they can "destroy" them and exchange them for the guaranteed ENJ token.

The "Into the Metaverse" series of NFTs released by Adidas also uses the ERC-1155 protocol. Users who hold Adidas' "Into the Metaverse" series of NFTs can "wear" these virtual clothes on platforms such as The Sandbox, including hoodies and hats in the picture, and this series of NFTs can also be exchanged for physical goods. Similar to War of Crypto, users need to destroy NFTs when exchanging physical goods.

It can be seen that when the tool attributes of NFT are strong and the requirements for differentiation are not high, choosing a semi-homogeneous protocol such as ERC-1155 is better than ERC-721 in terms of cost and efficiency.

ERC-809

ERC-809 is also called the Leasable Protocol. The smart contract developed based on this protocol can allow users to rent any leaseable NFT by creating an API, and during the rental period, no one else can rent or use the NFT.

The ERC-809 protocol can be well explained using the example of a "hotel room card". When you check in to a hotel, the front desk staff will give you a room card, which is equivalent to an NFT based on ERC-809. It will specify the room number and check-in time range you can stay in. You can use this room card to enter the room during the check-in time, and the room card cannot open the door after it expires.

The game StarSharks on the BSC chain adopts a similar protocol, which allows players to rent NFTs to other players for P2E (Play to Earn). This method can fully activate the liquidity and utilization of NFT assets.

ERC-998

The ERC-998 protocol is a collective concept, also known as composable non-fungible tokens (Composable NFTs), that is, ERC-998 tokens can contain multiple NFTs or FTs. When transferring ERC-998 tokens, the entire hierarchical structure and ownership relationships are transferred.

For example, a mecha is composed of a main body and multiple equipment. If it is traded in the traditional way, these parts need to be disassembled and traded separately. However, the ERC-998 protocol can package the entire mecha into a token and trade it directly, which greatly simplifies the transaction steps and costs. It has important scenarios in the metaverse and games.

In addition to Ethereum, other blockchain networks actually have their own NFT protocols, but their construction methods are basically the same as those on Ethereum, with only slight differences in names, which are not listed here. The next issue will introduce the main types of NFT projects.