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While NFTs have faded from the zeitgeist, the underlying tech around them remains a powerful tool where builders continue to innovate. The ERC-6551 proposal aims to take NFTs a step further by introducing the concept of NFT Bound Accounts, which endows each NFT with the capabilities of an Ethereum user.
This post will explain what this EIP means and some example use cases. In addition, we will include a link to an interview with Station Labs, who is building with it already.
TL;DR
1. EIP-6551 allows NFTs to be an Ethereum account and take on superpowers:
a. A car NFT can now own other smaller NFTs representing its parts
b. NFTs can nest a portfolio of assets similar to a money-market fund
c. An expressive user profile can be created, including identity attributes and wearables
2. There are some challenges such as dApp incompatibility, but they are surmountable
3. The change can be a huge unlock for Game Developers and companies building Loyalty Programs
Background
ERC-721 (the non-fungible token standard) initiated a trend of creating unique, distinguishable tokens, which gave rise to various applications such as virtual collectibles, digital artwork, and unique blockchain-based assets.
Nevertheless, a challenge emerged: NFTs could not contain attributes within them.
Introducing ERC-6551
You can extend their capabilities by giving an NFT an Ethereum account without altering existing infrastructure.
Use Cases
1. Real-World Asset Representation: AKA Tell Elon to sell Teslas as NFTS
2. Gaming, Virtual Worlds, and Social Networks
3. DeFi
4. Loyalty Rewards & Profiles
Some of the technical bits:
The proposal establishes a pattern for deploying account smart contracts controlled by an NFT. By owning an NFT, you control all accounts bound to it and, therefore, own the assets in these accounts. If an NFT is transferred, its new owner inherits control over all its bound accounts.
Accounts are deployed through a global, permissionless registry which helps create consistent deployment addresses for accounts and a unified event stream for indexers. The registry also supports determining the address of an account without having to deploy it.
Considerations & Risks
While ERC-6551 could be transformative, it comes with its set of challenges:
Conclusion
By rendering NFTs capable of more complex on-chain interactions, we could be on the brink of witnessing innovative applications that were once beyond reach.
Dynamic is working with a number of NFT marketplaces and builders in this space. We are exploring ways to handle onboarding these unique accounts and ways to provide exceptional integrations as this becomes more available.
To read about how one of these unique builders is using them today check out an interview with Co-Founder of Station Labs, Conner Swenberg.
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