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ERC 1155 Tokens: The Crypto Gold?

Crypto token standards of different types have allowed the creation of Crypto NFTs and Crypto coins whose total market capitalization exceeds $3 Trillion collectively. Their use cases are growing by the day with a parallel increase of the Crypto aggregators who facilitate several types of crypto money services, including offering or managing ERC 1155 Tokens.

The market of crypto finance has its own tokenomics, whose comprehensive study still requires crypto-economy to age due to the inception of novel crypto concepts. The ERC 1155 tokens are an excellent example of a raw concept growing in popularity, though it is merely two years old. So just what are the ERC 1155 Crypto Tokens?

ERC 1155 Tokens

ERC 1155 Tokens: Hybrid Crypto Tokens

The world was first introduced to the ERC 1155 crypto tokens in 2019 despite its initial creation in 2018 by six authors. It supports reducing data footprint on the Crypto blockchain or Decentralized Finance Apps by creating standard contracts that can handle multiple types of tokens like the ERC 721 and ERC 20 tokens.

For instance, a single ERC 1155 token contract can hold any number of NFTs and Fungible tokens (Crypto Coins). Its existence allows combining multiple token contracts that would otherwise require creating new contract IDs on the sale or transfer of existing crypto tokens.

Bridging Incompatibilities Between ERC 20 & ERC 721 Tokens

Both the Fungible and Non-Fungible tokens have different contract types, so adding the functionality to make them compatible with each other can become an uphill task. It would require imposing additional configurations which can potentially burden the blockchain network or lead it to failure in extreme cases. It is precisely here where the ERC 1155 Multi-Tokens shine.

The ERC 1155 Tokens can allow registering contracts that users can utilize to obtain or transfer ERC 20 & ERC 721 tokens without individual fragmentation. Such token contracts would also be simpler to create, comparatively secure, and efficient in design while providing maximum useability.

ERC 1155 Tokens

To further understand the need for the ERC 1155 multi-tokens, let’s look at the limitations of the other two types of crypto tokens.

Limitations of ER 20 Tokens

The well-known Ethereum crypto tokens of the ERC 20 standard lack the depth of management of events. A real example of the statement would oversee a user sending crypto tokens to another but by mistake on a non-existent wallet address. It will result in the tokens being lost forever with no medium to retrieve them again.

Limitations of ERC 721 Tokens

The ERC 721 tokens also similarly possess a type of inefficiency in terms of handling requests by users. For someone who desires to check the status of a token contract (ERC 721 standard) that possesses, say, a thousand registered tokens, their request traverses on the blockchain through the thousand tokens to return a response after matching with respective user addresses.

Moreover, when users want to transfer five or more NFTs to another person, they’d have to handle five transactions separately. Processing these contracts would naturally also levy a transaction charge, thereby significantly increasing the overall transaction cost.

ERC 1155 Crypto Tokens: Optimal Functions

The multi-tokens of the crypto world indeed seem to present a practical solution that can help crypto blockchains better manage crypto transactions. But are they promising enough to sustain their ground and functionality in a real-world scenario?

Efficient Heap Transactions

The use of ERC 1155 crypto tokens can allow native transfer of accommodating numerous ERC 20 and ERC 721 tokens in a singular operation. Such transfer events will see a minimum impact on the blockchain network, saving transaction costs and providing a high-functioning crypto trading system window.

Secure Crypto token Exchange & Storage

Multi-tokens can be programmed to carry a verification interface that can check the transaction state of the crypto asset they hold. When an initiated crypto transaction fails to complete, the interface can function to return the token to the initiator of the transaction.

Such a facility can prevent void transactions which in their excess can burden the network besides preventing cases of double sale of the same token.

Existing ERC 1155 Tokens

The feasibility of these tokens is indeed impressive, considering the functionality that they provide. Thus, creators and marketplaces are using this token standard to unify crypto transactions of Fungible and Non Fungible tokens in their individual ways that ultimately function similarly at the core level.

ERC 1155 Tokens

Enjin

The Minecraft game producer Enjin has programmed such tokens along with the help of Witek Radomski to promote their use. Its applications are demonstrated by creating numerous crypto games that allow ERC 20 token (ENJ-Enjin Coin) transactions linked to the ERC 1155 crypto tokens so users can trade them on the Enjin Marketplace.

With the growing creation of custom contracts containing the ENJ coins, those coins are being removed from the blockchain, making their value scarce. Such a model has allowed them to boost their blockchain, which was notably among the fastest-growing crypto blockchain in 2020.

Mocktail (MOK)

The Mocktails are the first ERC 1155 crypto tokens on the Binance Smart Chain, a global decentralized digital asset exchange platform. The creator of MOK tokens is MocktailSwap Finance, an Automated Market Maker protocol offering crypto aggregation via lending, vault compounding, and yield generation for optimum returns.

Their Mocktail tokens can behave as both ERC 20 and ERC 721 tokens simultaneously under the same address, making them worthy semi-fungible tokens. Such tokens will be initially fungible, and upon redeeming them, they will become non-fungible to allow smooth transactions with different uses across NFT Marketplaces.

For instance, the token can represent a concert ticket or an admission pass which will be fungible in nature and thus similar to other tokens. However, upon redeeming them, they won’t retain their fungible nature and will become non-tradeable. Hence, also creating a scarcity of MOKs, which will raise their market value.

Creating ERC 1155 Tokens

Should the seemingly wonderful prospects of the ERC 1155 Multi-Tokens appear lucrative, a programmer can create them while adding custom and unique attributes to them. The minted tokens will then hold the transferable possibility to be sent to other users who can later either keep them or exchange them for non-fungible assets on the blockchain.

A program for the ERC 1155 Crypto Tokens can appear like this: [E.g. SHOP tokens]

// contracts/ShopItems.sol
// SPDX-License-Identifier: MIT
pragma solidity ^0.6.0;

import "@mygreattoken/contracts/token/ERC1155/ERC1155.sol";

contract ShopItems is ERC1155 {
    uint256 public constant ITEM = 0;
    uint256 public constant ITEM2 = 1;
    uint256 public constant ITEM3 = 2;
    uint256 public constant ITEM4 = 3;
    uint256 public constant ITEM5 = 4;

    constructor() public ERC1155("https://shop.example/api/item/{id}.json") {
        _mint(msg.sender, ITEM, 10**17, "");
        _mint(msg.sender, ITEM1, 10**26, "");
        _mint(msg.sender, ITEM2, 1, "");
        _mint(msg.sender, ITEM3, 10**7, "");
        _mint(msg.sender, ITEM4, 10**8, "");
    }
}

In the above example, The shop item ITEM is a fungible token, while the ITEM2 is a non-fungible token because only one was minted. Also, the values lack a decimals field because the SHOP tokens cannot be partitioned.

Such token contracts could also contain an optional extension of IERC1155MetadataURI, which serves to retrieve data from a defined uri function.

Now, such tokens can be deployed and can be queried in the following manner:

> shopItems.balanceOf(deployerAddress,4)
100000000

Transfering the SHOP tokens into users accounts will follow this procedure:

> shopItems.safeTransferFrom(deployerAddress, userAddress, 3, 2, "0x0")
> shopItems.balanceOf(userAddress, 3)
1
> shopItems.balanceOf(deployerAddress, 3)
0

Deployer can also initiate a heap transfer to user accounts and obtain the sum of batches:

>shopItems.safeBatchTransferFrom(deployerAddress, userAddress, [0,2,4,5], [100,200,2,2], "0x0")
>shopItems.balanceOfBatch([userAddress,userAddress,userAddress,userAddress,userAddress], [1,2,3,4,5])
[100,200,2,2,1]

Fetching the metadata uri is possible via:

> shopItems.uri(2)
"https://shop.example/api/item/{id}.json"

The holder uri can contain the string {id} that deployer should replace with a real token ID in lowercase hexadecimal values (without any 0x prefixes) and leading zeroes padded to a total of 64 hex characters.

For token ID 3 and uri https://shop.example/api/item/{id}.json deployers would replace {id} with 0000000000000000000000000000000000000000000000000000000000000003 to retrieve JSON at https://shop.example/api/item/0000000000000000000000000000000000000000000000000000000000000003.json .
The crucial JSON document for token ID 3 can appear like:

{
    "name": "ITEM3",
    "description": "Classic Cup containing clairvoyance, charm.",
    "image": "https://shop.example/item-id-749degs.png",
    "attribute": 30
}

Note: The metadata includes the information related to the item, but the metadata itself isn’t placed on the blockchain. Thus, allowing developers to modify the metadata anytime and adjusting the mechanics of the sale.

Future of ERC 1155 Multi-Tokens: Semi-Fungible Crypto Gold

ERC 1155 Tokens

The ERC 1155 Tokens can have numerous uses, and they hold the potential to efficiently replace fiat money, as one of their programmable exchange mediums can wholly match the economics of fiat money. However, being blockchain-based, users will need to interact with an online network to complete the transactions for these tokens.

Therefore, such tokens can possibly remodel the entire crypto market while making it more manageable for aggregators, exchange platforms, marketplaces, and users. Hence, the conclusion states that the future of such tokens could also help make people place their trust in a globally functional and practical crypto economy.

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