On July 10, Wanwudao was fortunate to invite Benny, the founder of ERC6551, to visit Wanwudao and discuss the difficulties and opportunities of NFT, as well as open topics such as AI and blockchain games with 6 other founders. It is worth noting that Benny is also a founding member of CryptoKitties and ERC721. The following is a translation of the highlights of this event. You can also scan the QR code at the end of the article to watch the replay and join the ERC6551 community to communicate in depth with Benny.
CoachDAO Simon: Please briefly introduce yourselves.
Benny: Six years ago, I was a member of the ERC721 team and launched CryptoKitties. After that, we launched NBA Top Shot. Taking this opportunity, we began to cooperate with fashion brands, and finally we launched our own SAPIENZ project, which is an NFT about digital fashion products. We hope that the NFT characters can have their own clothes and other accessories, so we created ERC6551 for this. This is my story.
Boyu: I am the co-founder of RE:DREAMER. We focus on assetizing the real world, especially physical goods for the consumer economy, so we have a lot of connections with manufacturers and supply chains. We hope to store a lot of real-life behaviors and data in NFTs through the blockchain, and we are combining ERC6551 with our own standard ERC6672.
Kekos: I am the co-founder of Createra. We are building a Web3 game engine. We think ERC6551 is very well designed, and we are also trying to combine it with games, such as in the DID field.
Shawn: I am the co-founder of Parami Protocol. We also have an ERC5489 protocol, which can transform the creator economy of the Internet and turn NFT into a gateway for Web3 content discovery.
Kaiyang: I am the co-founder of xBank. We try to match the demand and supply of NFTs. We give NFT demanders more leverage to lower the threshold for them to purchase NFTs.
Timmy: I am the co-founder of Furion. We are developing NFT in the direction of Defi, fragmenting NFT from ERC721 into ERC20, and then empowering ERC20 Token in various ways to make it more usable.
Simon: What is the driving force behind the innovation of ERC6551? Benny, can you introduce the background and creation experience?Benny: I have been a supporter of NFT for the past six years. I have been to Shanghai, Hong Kong, Taipei, etc. to attend game conferences and share my ideas about NFT and CryptoKitties. I still remember that many people looked at me with strange eyes at that time. They didn’t understand what this guy was talking about at all. As we all know, ICO was very hot in those years, so no one paid attention to the niche NFT.
After that, Dapper Labs, which I participated in, decided to develop its own blockchain Flow, and developed NBA Top Shot on it, so we also missed Ethereum and other EVM-compatible chains. When I left Dapper Labs, I returned to the Ethereum ecosystem. In the past four years, NFT has undergone many changes, such as BAYC, AZUKI, Doddles, etc., so I have to find a way to catch up with the progress. I am like a student who learns a lot about where people use NFTs and the possibility of NFTs breaking out in various fields. So ERC6551 is not essentially a recent phenomenon. For example, fields like Flow actually have resource-oriented concepts, so ERC6551 is native to blockchain, but not to Ethereum.
The emergence of ERC6551 was not imagined by a few of us sitting in a room, but a demand we discovered during the project. SAPIENZ was jointly developed by Future Primitive and Jeff Staple, a well-known street designer with 25 years of experience and cooperation with hundreds of brands such as Nike. In this process, we came up with a cool idea. What if the NFT character can change clothes, and this process is on the Ethereum chain, and there is no need to pay gas fees? But it is very difficult to solve this problem. Fortunately, we have the opportunity to learn from many other projects such as Doodles that are trying in this direction. We used XMTP technology in a hackathon in San Francisco to develop a project that allows NFTs to send messages to "talk to each other". Then, during breakfast, I asked the team members that since we can make NFT "talk", can we let NFT have its own account so that it can interact with other Dapps or hold other assets? This idea is very cool, so in the following time we did a lot of research and looked for many standards and projects, but we did not find that no one had implemented this idea, so we did it.
First of all, ERC6551 is not a Token standard. Many people will be confused and even compare it with ERC721, but in fact ERC6551 just connects each independent NFT to its own account. It is very open, so there are 5 very important contents to help everyone understand it.
First, ERC6551 is applicable to all NFTs on EVM chains such as Ethereum and polygon, and is forward compatible, which means that already issued NFTs such as CryptoKitties can also be bound to their own accounts.
Second, your NFT can hold ERC20, ERC721 and ERC1155 standard tokens such as ETH and USDC.
Third, there is no packaging contract, so you don’t need to send your NFT to a specific contract address.
Fourth, NFT and the corresponding bound account are compatible with existing infrastructure, such as Opensea, MetaMask, Etherscan and other platforms.
Fifth, it is completely decentralized. Before this, some solutions were implemented in a centralized way, but for us, we strictly follow the spirit of decentralization, so NFT is the only owner of the account it is bound to, and we can never do bad things such as stealing users' assets.
Simon: What is the main application scenario of ERC6551? What changes and innovations do you think it will bring to games, social networking and other fields?
Benny: I think the first and most obvious area is gaming. What it does is create a decentralized inventory system, which is very important for gaming. We are communicating with a lot of game teams who are considering making some new changes using ERC6551.
The second scenario I think is DAO. Many DAOs will issue their own NFT membership cards, but the problem is that DAO is related to loyalty and reputation. Before ERC6551, in addition to membership cards, you will also get points, SBT and many other things. These will exist independently in your MetaMask. When you sell your membership card, these other things are still in your hands. ERC6551 will structure all these things. In addition to issuing membership cards, many DAOs will also put other assets related to reputation and behavior in this membership card.
The third scenario is infrastructure. We have many projects including Rabbit Hole that are using ERC6551. We are also exploring the development of areas such as data indexing. We are also discussing standard integration issues with platforms such as Zora and Opensea.
The fourth scenario is social. We are communicating closely with Lens Protocol because in Lens Protocol you have a lot of NFT assets including handles and followers. These are all on the same layer and are not structured. They are confusing and difficult to understand. ERC6551 can create a relationship network for them, so Lens Protocol is very interested in us.
Simon: The five founders of Wanwu Island, what kind of changes do you think ERC6551 will bring to what fields?
Boyu: I think ERC6551 has great potential. The part that we are particularly interested in is that NFT can own the copyright of real-world assets. This is really interesting. Before, people wanted real-world people to hold digital assets, but now it can be the other way around, allowing digital assets to hold real-world assets. When we communicate with some brands, we can see the potential to create more interesting scenarios based on this, especially about the membership mechanism.
Kekos: I also think that ERC6551 will first be used in the gaming and social fields. For example, NFTs bound to accounts can have their own identities and assets on the chain. Through ERC6551, these assets can directly interact with Dapp, making tasks in the gaming field more composable and interactive.
Shawn: As a member of Parami Protocol, I am definitely a firm believer in NFT. In the social field, NFT has been proven to be a very effective medium that can showcase people’s identity, culture, trends, etc. ERC6551 coincides with the vision of Parami Protocol, which will tokenize influence and interaction on the Internet.
Kaiyang: Let's go back to 2017, when smart contracts just appeared, but there were not many use cases. But now it is completely different. We found that it can do a lot of things, just as we have an NFT account today, I believe it will have a very broad scene in the future. For us xBank, as an NFT lending platform, imagine that users enter our platform with NFT as an account. This NFT will accumulate users' points and credit, and will expand many ways to play. We will actively explore the possibility of combining ERC6551 with xBank business.
Timmy: I fully agree with what Benny said about the construction of the ERC6551 ecosystem. I think the first demand in this ecosystem is trading. It is important to combine ERC6551 with the two token standards of ERC20 and ERC721, because the most important attribute of an asset is tradability. The second point is how to build a community. For example, if we buy BAYC, a community will be automatically formed. I think the membership community is very important, especially for PFP-type NFTs. A strong community helps to better build the ecosystem.
Benny: I find Timmy’s two points very interesting. When you create a DAO, you need to have a multi-signature wallet to manage the community’s assets and add other signatories. Each NFT project is a DAO. If there are 10,000 NFTs, there will be 10,000 wallet addresses. So issuing an NFT is equivalent to creating a DAO, but you need to add all these 10,000 wallet addresses into the multi-signature wallet, and 5,000 addresses are required for voting. This will cause huge efficiency issues, but I believe that someone will start designing some new DAO tools. I think this is an interesting direction worth exploring.
The second point is that many people are working on Defi. I know a lot about NFT and DAO, but to be honest, I don’t know much about Defi. I am a novice. I put a lot of money into Defi but lost it all. However, there are two views on ERC6551. One is that it will make NFT more non-homogeneous and unique, making it more difficult to estimate the price, because you can trade at the floor price in Blur, but ERC6551 allows many assets to be included in NFT, and it will also accumulate on-chain data, which makes its price more difficult to estimate than the current traditional NFT, and thus more difficult to trade. Another view is that ERC6551 will create a new Defi paradigm. I don’t know much about Defi, but as far as I know, maybe you can create an NFT as an LP of Uniswap or other Defi protocols, and get income, and create a basket of assets for this NFT, which is equivalent to a hedge fund on the chain in a sense, and you can also sell it in Opensea.
Simon: Benny, what are your plans for ERC6551? How can we help it be accepted by more people?Benny: In the near future, there may be something like an extension store where developers can build extensions that can be installed on NFTs. Imagine if you own Azuki, you can only wait for the project to create a new contract and add new features to the NFT. But in the future, if an extension store is generated based on ERC6551 and developers release a lot of interesting features in it, you can add it to your own NFT instead of being the creator of the NFT.
Secondly, I think it would be great to combine AI with it. For example, in the game there will be NPCs giving you tasks and talking to you. In the future, there will also be NPCs in the virtual world metaverse. But when people leave the virtual world, the whole world will become empty like a ghost town. What we are trying to do is to use AI and programmable NFTs as NPCs to fill this world. These NPCs will also be part of the blockchain. Every action will be on the chain. They will have their own identity and will own their own assets. This is really exciting for me.
Simon：How secure is ERC6551?Benny: We think it is relatively safe. We have conducted two code audits and we will continue to do so. But as you know, smart contracts cannot be 100% safe. I will try my best to ensure safety through audits, vulnerability bounties, etc. So first of all, I need to tell you that when you interact with smart contracts, there is still a certain probability of risk. This cannot be ruled out. Nothing is 100%.
Secondly, suppose you have an NFT, and it holds other NFTs. All NFTs will eventually be held by a wallet, which may be MetaMask or Ledger, etc. Therefore, if you leak the mnemonic phrase of this wallet, you will still be attacked and suffer asset losses.
The third risk is that if your NFT holds a lot of assets, you put it on Opensea for sale as a package, and someone makes you an offer based on the price of the entire set of assets. You transfer all the assets under the NFT and then accept the offer. The other party gets nothing but an NFT shell.
One way you can think of is to use a time lock, for example, to set a time for your NFT. Before that, the assets in the NFT are locked. When other buyers see that they are locked, they will believe that you will not do anything bad, but it also means that you cannot normally withdraw the assets in it, so this solution is not perfect, it is only temporary.
Another option is that we are working closely with Opensea. They have specially assigned an engineer to be responsible for this matter. Opensea will check whether the assets exist, whether the token account has been changed, etc. If there are any abnormalities, the buyer will be blocked. This is a more effective and long-term solution.
Simon: How might ERC6551 and AI be combined?Benny: Whenever I think about this question, I get excited, but also scared, because now ChatGPT can only have conversations, does not own assets, and does not have its own wallet. So now even though it is very smart, it cannot do evil things. But like the NPC scenario I just mentioned, it can earn millions of dollars through flash loans, attack the blockchain, and even hire people in the real world to work for it after it has money. So we will organize an event in New York on September 20th, and invite friends from OpenAI, NVIDIA, artists and other industries to discuss the topic of morality. To some extent, we are releasing this unstoppable force, which may be the end of mankind. Maybe we can coordinate and truly set some moral standards from it.
Just as Elon Musk worried about AI before, if the NPCs I mentioned have their own AI models injected with souls, and hold assets and wallets to interact with others, because blockchain is decentralized, they have all the rights in the blockchain world, these NPCs may be like Skynet in the movie. I don’t know if anyone has a solution to the risks of decentralized AI models, maybe this is why AI models are not open source yet.
But our conversation today is taking place in 2023, which is not much different from when I talked about NFTs in 2018, so we are still at a very early stage, but I believe that this change will not happen to the current blue-chip NFTs, but to those brand new projects that have deeply thought about this matter.
I spent a lot of time studying psychology. Dunbar's number is also known as the 150 rule. He believes that a person can only have meaningful and stable social relationships with 150 people in his lifetime. So I am also thinking about the same question. How many objects can humans have deep and meaningful connections with? Imagine if my house is on fire, what things will I protect at home? It may be a photo with my parents, or it may be an engagement ring. There is no research on how many deep connections humans can have with objects at most. Let's assume there are 100. At least 99% of them are in real life today, but I believe that in 5 to 10 years, there will be a large number of digital objects that you will care about, so NFT will make digital objects meaningful because of ownership. In the real world, you are limited by the environment you are in. You can only put items that are meaningful to you in a limited room, but in the digital world you can have millions of items, so NFT breaks through the limitations of space and quantity of objects owned by humans. Secondly, in the real world, these objects are stationary, but in the digital world, you can program and interact with NFTs, and even NFTs will have their own consciousness after combining with AI, which will be very interesting.
How will the five founders of Wanwudao combine ERC6551 with your own products?
Timmy: Building a community is very important to me. Community contributors will receive reputation rewards such as points and SBT. Then they can vote to decide the product direction or enjoy product discounts. I think ERC6551 can help in this regard.
Kaiyang: I think a more reasonable pricing model is very important for us. We will focus on how protocols such as ERC6551 will change the value estimation of NFTs and adapt to them.
Shawn: I think Benny's ideas are very consistent with the Parami Protocol we are developing in many concepts. We believe that a person's brand, influence and culture can be tokenized, and to some extent it will become a DAO. These will be quantified as value on the chain. We believe that ERC6551 will have a lot of integration with Parami Protocol. We have now developed a Google browser plug-in to enhance the interactivity and scalability of NFTs.
Kekos: As I just said, I will try to use ERC6551 to combine with DID in our game, so please stay tuned.
Boyu: Because we focus on the integration of manufacturers and supply chains, this process will be complicated because one entity may correspond to different roles and permissions. In addition, our ongoing community ambassador program will also have a lot of roles and badges to manage. We will try to use ERC6551 within the system.
How does ERC6551 solve the cross-chain problem?
Benny: The TBA implemented by ERC6551 itself is cross-chain compatible. Suppose you hold a Moonbird, and its account address bound to the Ethereum mainnet is 0x123. This address will also be the address of EVM-compatible chains such as Polygon, Optimism, and Arbitrum. So when you transfer NTF from Ethereum to other EVM-compatible chains, the corresponding account on the chain will still be yours. But the biggest problem is that if your Moonbird holds assets on Optimism, how can I control it on the Moonbird on the mainnet? We are developing account guardians, which use cross-chain solutions such as LayerZero to allow your Moonbird to operate assets across chains, but we are not very satisfied with this idea because it is still centralized to a certain extent because a cross-chain provider is required, so we are making a new more automated and native version that can complete cross-chain signatures through NFT accounts, but the only problem is that you need to pay the Gas fee from the main chain to other chains. We have some ideas that may be feasible and are currently studying them, and we are also actively communicating with the Optimism team about how to not pay the Gas fee of the main network, and only need to perform asset transfers through signatures without using a cross-chain provider. This is a more decentralized solution, and no one has ever done this before, so it is still in the research stage. We believe there is an 80% probability that it can be achieved.
Ultimately, if you want to issue NFTs or blockchain games, you can choose the Ethereum mainnet because it has more NFT players. Then you can issue the points, badges, etc. attached to this NFT on Layer2. You only need to prove that you own the NFT on the mainnet. This requires a long period of research and testing for us, about 2 to 4 months.
Simon: What do you think is the most important thing as a founder?
Benny: I think as a founder, it doesn't matter whether you are in Asia or Europe. I think the most important thing is that we have the responsibility to preach and educate, so that more people can understand your project. Although our communication today is about ERC6551, I want to emphasize that as a founder, you need to always ask yourself why you do this? Try to put aside the technology behind it and explore your real purpose. What kind of problem do you want to solve? Then think about whether using the current technology is the best way to solve this problem? So I often see a lot of arguments about ERC6551. Some people say it is not so good, and some people say it is plagiarized from something that has existed many years ago, but I want to say that the debate about whether the technology is good or not is not the most important, because first of all, everything is open source and I don't make money from it. Secondly, I think if we keep competing, arguing, and attacking others, this is not the process of achieving a greater goal in the blockchain field. Whether it is Ethereum or other ecosystems, they are developed through cooperative contributions, so we must cooperate and grow with each other, instead of arguing and attacking blindly, which cannot bring any substantial changes to the industry.
I think my experience in CryptoKitties and Dapper Labs over the past six years all originated from Ethereum. I learned a lot from them, especially the spirit of decentralization. Dapper Labs is a centralized company worth hundreds of millions of dollars. I was an early member of it. It was not until it grew to 600 people that I felt the disappearance of the company culture. The respect for decentralization and great goals disappeared, and many wrong decisions began to be made, but in a decentralized open source organization you can prevent all this from happening. So if you are a founder, you really need to focus on decentralized decentralization and openness, so that the organization can survive longer.
Is it possible that full-chain games will have some opportunities next year?
Benny: My predictions about the future may not be correct, and it is difficult for me to judge what will happen tomorrow, but I have indeed met some very interesting game teams. However, what I want to say is that when I went to China, South Korea and Japan to attend game conferences in 2018, I saw many very large game companies with good IPs and were interested in Web3, but six years later I did not see them succeed. Of course, there may be many reasons, such as policies and other factors, but at least I think blockchain games need to be completely decentralized, and there should not even be a centralized server. The explosion of blockchain games should occur in more native fields. I don’t think IP can solve this problem, because when we were at Dapper Labs, we signed many big IPs including the NBA, but they were not very successful. I don’t think very large IPs such as Disney will become good cases. Maybe decentralized IPs that have never appeared before will succeed, such as Nouns, BAYC, etc. I have seen many game teams trying to sign existing centralized IPs, but centralized IPs will definitely do centralized things, with a lot of red tape in them, and you can’t really create them freely, so large-scale games should be more native, decentralized, and bottom-up.
