Guide to ERC 1155

ERC (Ethereum Request for Comments) is a type of EIP (Ethereum Improvement Proposal). Every update on the Ethereum network goes through an EIP. Anyone from the community can submit such a proposal which then goes through a voting process if certain criteria are met. If the proposal is passed after voting, the proposed updates are executed on the Ethereum chain.

ERC 1155 is an EIP focused on tokens primarily.

The major types of tokens that we know are either fungible (ERC 20 tokens) or non-fungible (ERC 721). Individually, both of these tokens are quite essential but until ERC 1155 came, there was no way to operate with them together. For example, it would’ve been impossible to make a transaction involving both an $APE coin and a Bored Ape. You’d have to transfer them individually which is both inefficient and expensive.

With ERC 1155, the two tokens are combined and can function together.

To understand how it works, think of it like having to pay someone through five hundred coins, each worth 1 buck vs. paying through a single 500 bucks currency note. Conventionally, each of the fungible and non-fungible tokens required a smart contract. So if a gamer wanted to trade 300 coins and 200 weapons, it meant having to make a trade on 500 smart contracts which is wildly inefficient.

Along with this ability to support an infinite number of tokens within a single smart contract, ERC 1155 also has a safe transfer feature. So if a token is mistakenly sent to the wrong address, it can be reclaimed. Thus, this standard also has an extra layer of security.

Here are some of the use cases of ERC 1155:

• ERC-1155 allows games to efficiently manage thousands of in-game items like weapons and skins in a single contract.
• DAOs can use ERC-1155 to bundle up the different token types they issue.
• Artists can create and manage digital art tokens with different levels of rarity, editions, and properties easily.
• Companies can use ERC-1155 to create reward programs with different token types, streamlining the redemption process.

One of the most popular secondary markets Opensea uses ERC 1155 as well, which is why we’re able to trade various tokens at once efficiently. Some other projects that have implemented this standard include Decentraland, Enjin, The Sandbox, Rarible, and many more. The only limitation it has now is that it’s complex to develop both fungible and non-fungible tokens within one contract.

However, the use cases far exceed the limitations and the number of projects using it is evidence of that. ERC 1155 is a flexible and powerful way to transact tokens, especially in the gaming and decentralized finance (DeFi) sectors. Even more use cases of ERC 1155 might be discovered in the future.