Abstract

ERC6551 is a new Ethereum standard released on the Ethereum mainnet on May 7, 2023. This standard greatly enhances the functionality of ERC721 NFTs, allowing them to operate as smart contract accounts exclusive to themselves, making them more versatile and practical than ever before. This article will introduce the background, principles, use cases, advantages of ERC6551, and provide a practical case study from the perspective of XCart.

Background

NFTs (Non-Fungible Tokens) are a way to represent unique and scarce digital assets on the blockchain. NFTs can be used to represent a variety of things such as artworks, collectibles, in-game items, identities, and credentials.

The popularity of NFTs is attributed to the ERC721 standard, which is a universal interface for creating and trading NFTs on Ethereum. The ERC721 standard defines the basic properties and functions of NFTs, such as name, symbol, total supply, ownership, transfer, authorization, etc.

However, the ERC721 standard also has some limitations, mainly that NFTs cannot act as agents or own other on-chain assets. This is not in sync with the use cases of non-fungible assets in the real world. For example:

• A character in a role-playing game that can accumulate assets and abilities over time based on its actions.

• A car, composed of many fungible and non-fungible components.

• An investment portfolio composed of multiple fungible assets.

• A membership card that can grant access to a place and record past interaction history.

To address this issue, the ERC6551 standard was proposed, which grants full functionality of an Ethereum account to each ERC721 token, while maintaining compatibility with existing ERC721 contracts. This is achieved by deploying a unique smart contract account (referred to as a "token binding account") for each ERC721 token using a permissionless registry.

The token binding account can own and send any type of on-chain assets, such as ETH, ERC20, ERC721, and can interact with any smart contract, such as DeFi, DAOs, games, etc. The control of the token binding account is held by the owner of the bound ERC721 token, meaning only the token holder can sign and execute transactions for the token binding account.

Principle

The ERC6551 standard mainly consists of two parts: a permissionless registry for deploying token binding accounts and a standard interface for interacting with these accounts.

Registry

The registry is a singleton smart contract responsible for generating and storing the address of a token binding account for each ERC721 token. The registry uses a deterministic algorithm to calculate the address of the token binding account based on the contract address of the ERC721 token and the token ID. This algorithm ensures that each ERC721 token can have only one unique token binding account, and the address of that account will not change over time or due to other factors. The registry also provides a query function to return the address of the token binding account based on the contract address and token ID of the ERC721 token.

The registry is also responsible for deploying a proxy contract for each token binding account. This proxy contract is a lightweight smart contract that implements the logic of the token binding account. The proxy contract uses the EIP1167 standard, a method for creating minimal proxy contracts that only require about 100 bytes of code. The role of the proxy contract is to forward all transactions sent to the token binding account to a common execution contract that contains the core functionality of the token binding account. This approach saves deployment and execution costs while maintaining the independence and flexibility of the token binding account.

Interface

The ERC6551 standard defines two interfaces: the account interface and the execution interface. The account interface is a read-only interface that allows anyone to query the basic information of the token binding account, such as the bound ERC721 token, its balance, transaction history, etc. The execution interface is a writable interface that allows the owner of the token binding account to sign and execute transactions for the account, such as sending assets, calling contracts, creating contracts, etc. The execution interface uses the EIP1271 standard, a method for signature verification that is compatible with any type of wallet or identity. The execution interface also supports batch transactions, allowing multiple transactions to be executed at once to improve efficiency and flexibility.

Use Cases and Advantages

The ERC6551 standard brings many new use cases and advantages to NFTs, including:

• NFTs can own and manage their own assets, such as ETH, ERC20, ERC721, without relying on external wallets or contracts. This allows NFTs to better represent non-fungible assets in the real world, such as cars, houses, artworks, which typically have their own value and rights.

• NFTs can interact with any smart contract, such as DeFi, DAOs, games, without modifying existing contracts or infrastructure. This allows NFTs to better participate in the Ethereum ecosystem, enjoying various services and opportunities such as lending, voting, gaming, etc.

• NFTs can control multiple independent token binding accounts for different purposes and functions. For example, an NFT can have a token binding account for savings, one for investment, one for event ticketing, etc. This allows NFTs to better manage their finances and risks, achieving diversification and optimization.

• NFTs can use token binding accounts across different chains to achieve broader compatibility and interoperability. For example, an NFT can have a token binding account on Ethereum, one on Polygon, one on BSC, etc.

Case Study: XCart

ERC6551 allows XCart's NFT shoes to have their own token binding accounts, meaning they can operate as their own smart contract accounts, own and send any type of on-chain assets, and interact with any smart contract. This enables XCart's NFT shoes to better represent luxury goods in the Web3 era, such as "run to earn".

ERC6551 allows XCart's NFT shoes to control multiple independent token binding accounts for different purposes and functions. For example, an NFT shoe can have a token binding account for savings, one for investment, one for event ticketing, etc. This allows XCart's NFT shoes to better manage their finances and risks, achieving diversification and optimization.

ERC6551 allows XCart's NFT shoes to use token binding accounts across different chains to achieve broader compatibility and interoperability. For example, an NFT shoe can have a token binding account on Ethereum, one on Polygon, one on BSC, etc. This allows XCart's NFT shoes to better adapt to different network ecosystems.

The XCart team consists of senior BTC purists, computer geeks, internet branding experts, operations specialists, and young trend-setting artists. The team is dedicated to bridging the gap between crypto and the traditional world, exploring practical use cases of blockchain in real business environments.

XCart is a Web3 IRL (in real life) brand founded by a group of Crypto OGs, dedicated to connecting crypto with reality. On a variety of trendy art items such as shoes, clothing, and bags in the real world, XCart insists on drawing the lifestyle of Web3 builders and using these physical items as canvases to carry various elements of crypto design, including NFC for virtual and real communication functions.

XCart platform is committed to building the world's largest RWA (Real World Asset) digital goods platform, bringing together Web3IP NFT creators, designers, artists, manufacturers, and other participants through a DAO (decentralized autonomous organization) model, with collaboration and creation at its core, reshaping the creator economy, and driving the physicalization and commercialization of NFT and IP content.

XCart has gathered numerous pioneering artists in the web3.0 space, creating a new narrative culture vertical to the Crypto field, embodying independence, craftsmanship, creativity, innovation, and responsibility. Everyone is encouraged to explore their potential and challenge themselves, becoming a soul blending freedom and creativity in art creation.

Conclusion

ERC6551 is a new standard that provides NFTs with a new functionality, allowing them to have their own smart contract accounts. This enables NFTs to own and send any type of on-chain assets, as well as interact with any smart contract, increasing their versatility, practicality, interactivity, flexibility, autonomy, and personalization.

The XCart platform is set to adopt the ERC6551 standard to achieve more NFT innovations and value. The ERC6551 standard opens up new possibilities and opportunities for the future of NFTs, and we look forward to its development and application together.

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