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ERC721R NFT – Can it Save the Crypto NFT Market?

The crypto market appears to be recovering well from the significant dip witnessed in early January 2022. The NFT Projects Rug Pull cases and crypto scams were major factors that contributed to that downfall. For countering them, a new crypto token standard has been devised – ERC721R NFT Standard. But can it catapult NFTs higher again?

What is ERC721R?

The existing ERC721 crypto token standard defines itself as non-fungible while lacking the characteristics of accommodating room for refunds. ERC721R Standard builds on it, adding an aspect of security (refunds) that can be advantageous to both the buyers and sellers.

Existence of the ERC721R Crypto Standard is by the collective efforts of a team called “CryptoFighters Alliance” on April 10, 2022.

Using the ERC721R NFT token standard makes obtaining refunds possible, establishing them partially similar to the ERC1155 tokens. The ERC721R tokens do not remove existing characteristics from the older ERC721 token standard and can be acquired similarly.

Why Does the Crypto Market Need ERC721R NFT?

Creating the new NFT standard arose from the need to add accountability to NFT investments.

The growing cases of NFT Rug Pulls and NFT scams have driven the NFT sales volumes lower, deterring buyers & sellers from making investments.

The newer token standard aims to improve the NFT ecosystem by eradicating such critical issues hindering global NFT sales.

Implementing an additional feature in crypto tokens is not unheard of in the past. The Azuki Azuki ERC721A token standard was devised to add gas fee improvements to the minting process. The ERC721R token hereon helps to make trustless refunds a functioning possibility.

ERC721R NFT – How Does it Work?

The ERC721R Collection template contains a mechanism whose smart contract retains the sum required to Mint NFT in escrow for a limited period. This duration can be referred to as the refund period.

Such architecture prevents the creators from withdrawing their invested funds until the end of this timeframe. During it, the buyer could return their purchased NFT to the smart contract to regain their ETH investment.

Should the creators decide to enact a rug pull, all the same, the buyers will request the refund before the completion of the waiting period, losing only the gas fee toward the transaction.

Also Read: What’s Next For Cryptocurrencies in 2022?

ERC721R Crypto Refund Procedure Explained – Is it A Flaw?

Although the newer standard appears as a formidable solution to a critical problem, it’s not without a handful of flaws.

The premise of allowing refunds is also what makes itself flawed, up to an extent. However, they still may not overshadow its benefits, also because the token standard is still in its beta phase.

Let’s understand the procedure of processing Refunds to identify the flaw.

Suppose a user demands a refund, they can simply access the portal/platform and initiate a refund request. The smart contract will thereon process the transaction as per the speed of the blockchain, after which the user shall receive their ETH.

ERC721R NFT

Here, there are still cases of making losses on NFT purchases, as the user loses the gas fee they pay. Simultaneously, the creators can take advantage of this phase, by walking away with marginal gains, without selling a single token.

Being able to define the refund period as indefinite is a major flaw in the design of the newer NFT Standard.

Multifarious Benefits of ERC721R NFT Assets

Creating a news standard was imminent to prevent the NFT industry from becoming a playground for scammers. At the same time, implementing anything new would see its adoption less, without offering concrete benefits.

Hence, the ERC721R Crypto standard offers the following benefits to both buyers and sellers.

ERC721R Creator Advantages

Using the newer standard would present the seller or creators as more credible than the competition. For a crypto market where hundreds of thousands of NFTs exist, it’s a vital benefit to set themselves apart.

Another benefit that the creators will reap is never seeing the NFT floor price drop below its Mint Fee cost. While it’s only possible until the refund period exists, it ensures the creator of making positive gains on their creations.

Lastly, the critical flaw also works to the benefit of the creators, wherein they can choose a longer refund period. However, doing so could have repercussions in terms of seeing lower credibility, unless the project is backed by serious investment or famous personalities.

ERC721R Buyer Advantages

The availability of proof of security is the crux of the benefits available to the buyers. In a supersaturated market, it’s still a bonus to invest in such assets, wherein losing investment has lower chances.

Additional benefits that the buyers can reap depend on the scalability of the ERC721R crypto standard in the future. For those to get introduced sooner, adoption of the new crypto standard is the paramount need.

Projects Using the ERC721R Standard

Despite the ERC721R standard of tokens still belonging to the beta phase, several projects have incorporated its use already.

1. CryptoFighters

It is a play-to-earn game on the Ethereum blockchain, launched back in 2018 featuring a distinctive gameplay model. Players could use the tokens to purchase or collect fighters, who would compete against other players, to earn crypto rewards.

Although the game never went out of play, it’s arriving on the Ethereum blockchain L2 platform. The creators of the game are the pioneers of the ERC721R crypto standard, which is simultaneously incorporated in the other projects listed below.

2. Curious Addys Trading Club

The CATC is another project on the Ethereum blockchain, offering users to learn about crypto and NFTs. Registered users can use diverse tools and interactive methods to understand the crypto world and its nuances while having fun.

Presently, the platform has already exceeded its limit for welcoming the users, maintaining 100 days refund period.

3. Exodia.io

The first of its kind crypto dashboard platform has also been reported to be making use of the ERC721R NFTs. The project presents users with a customizable dashboard that can be configured to show different NFT collections and their statistical market performance.

In addition, the Exodia dashboard can also showcase your NFT portfolio and connected wallets, all of which are accessible via its dedicated Chrome extension.

4. 7DayReFundNFT

It is a unique platform that allows creators to mint NFTs bundled with a 7-day refund period option for its buyers.

The simplistic platform may not appear welcoming to most based on the language used on its webpage, but it represents the easiest form of making use of the ERC721R crypto standard.

Any Other Projects?

The GitHub open source code for the ERC721R token is already available for public use, also featuring a declaration. It states that the owner of the forum already has a list of 10 high-quality buyers that have pledged to support projects that incorporate the new crypto standard. Alongside it, any interested could join the list by filling up this simple form.

ERC721R Crypto Standard Scalability

Results of how the ERC721R standard could perform against other crypto tokens are dependent on its wide adoption. Supposedly, after the ERC721R token standard achieves the success of the classic former standard, one should anticipate the following features:

ERC721R NFT

Vesting

The token standard will support the possibility of Vesting for a specific period. For instance, the creator of the NFT collection project would be able to release 30% of the funds from the smart contract per month.

Cliffs

It will serve to benefit both buyers and creators wherein it will protect the buyers while allowing the creator to have access to some funds.

For instance, 15% of the funds could be made available immediately for release while allowing the buyers to receive the remaining percentage as a refund upon purchase.

Final Words

Affirming right away whether the ERC721R NFT success can prevent Rug Pulls in the NFT Market could perhaps be premature. While that is true, it’s undeniable to claim and confirm that introduction of the new standard could help to fork better NFT sales.

Thus, with a cleaner market without room for rug pulls, the crypto NFT assets could again get back in business full-time!

FAQs

What is ERC721R?


It is a new crypto token standard and a successor to the ERC721A, after the widely used classic ERC721 standard.

Its key highlights are that the token mechanism allows a trustless refund period for the buyers. For creators, they can define the refund period themselves, depending on the level of credibility they want to portray.

Are the ERC721R Investments Safe?


Presently the development of the ERC721R tokens is in the beta stage, and assets associated with it are yet to be released. Still, based on what it adds to the existing profitable standard, it’s a safer investment option, but not over the ERC1155 tokens.

Who Sells ERC721R NFT?


The pioneers of this token standard are its first creators and sellers, known for creating the CryptoFighters game. The project is itself adopting the L2 Ethereum changes, simultaneously featuring a better NFT standard in the market for public use.

What’s the Future of the ERC721R Standard?


The future of the newer NFT token standard appears bright after adding up what it offers off the bat, including scalability. However, its success depends on its adoption, which may take a while, because it’s still in the beta stage.

What is the Difference between ERC721 & ERC721R?


The ERC721 standard tokens are the first to offer ownership of digital or tangible assets, by minting them on the Blockchain. The newer ERC721R standard improves on it by adding room for allowing a trustless refund period, serving to make those assets/its creator appear more credible.

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