Introduction
Before outlining the differences between the ERC-1155, ERC-20 and ERC-721 tokens, I will first describe some theoretical, technical and economic elements that provide insight into what a token is.
Consequently, to understand what a token is, the first thing to bear in mind is that financial business models are established through units or tokens of value.
The units or tokens of value are referred to as tokens or financial instruments, the utility of which allows trading actions to be exchanged between users participating in a given negotiation.
In the world of blockchain technology, units of digital value commonly known as cryptoassets have the particularity of being tokenisable, i.e. they can be issued as exchangeable tokens on platforms that contain and distribute the tokens, a mechanism that as such gives the digital asset a greater degree of fungibility.
Importantly, tokens derived from cryptoassets are processed through a smart contract with fungibility or non-fungibility qualities, currently most of these contracts are managed within the Ethereum network, following a categorisation model that includes; 1) payment tokens, 2) security tokens, and 3) utility tokens.
The ERC-1155 token was created in 2018 as a kind of hybrid token or dual token between the ERC-20 and ERC-721 tokens, it is worth mentioning that the launch of the ERC-1155 token marked a new stage of exchange in the Ethereum network blockchain, mainly because its functionality allows fungible and non-fungible tokens to be put into circulation in a single smart contract.
Among the main differences between the ERC-1155 token and the ERC-20 and ERC-721 tokens is its level of compatibility between fungible and non-fungible tokens, in addition to the fact that it does not require separate contract approval, which gives it greater functionality and lower cost per commission or transfer gas.
SOURCES CONSULTED
➊ Maldonado J What is an ERC-1155 token and what is its future?. Link
➋ Jake F Fungibility. Link
OBSERVATION:
The cover image was designed by the author: @lupafilotaxia, incorporating image background: Author: Jordan Heal
