Previously, we explored the ERC-20 interface, a contract standard which allowed for the implementation of a token contract which the majority of smart contract users are able to easily call. As a result of the ERC-20 standard, many protocols were able flourish without having to worry about incompatible token interfaces. However, there is one thing that the ERC-20 standard did not fix...
To understand the biggest shortcoming of the ERC-20 standard, we have discussed the concept of fungibility. Its design enables crucial fucntionality. However, this also implies that for a use case that requires for 1 unit of some ERC-20 A to be different in value than 1 unit of the same ERC-20 token A, the ERC-20 token standard is not sufficient for such a use case.
To make clear a particular that ERC-20 cannot support, imagine we wanted to represent an art collection within a smart contract. The smart contract would contain the following functionality in a similar fashion to an ERC-20 token:
The ability to query the "balance" (i.e. the art holdings) of a particular user
The ability to transfer art pieces from one account to another
The ability to get information about the art collection
The biggest different between an arbitrary ERC-20 token contract and an art collection is the fungibility of individual items - ERC-20 tokens are inherently fungible with items in the art collections are not (since the items each vary in value).
To account for uses cases like an art collection, the ERC-721 standard was introduced. Formally, ERC-721 is a standard for non-fungible tokens. Below is the interface of the ERC-721 token from its original proposal :
interface ERC721 { /// @dev This emits when ownership of any NFT changes by any mechanism. /// This event emits when NFTs are created (`from` == 0) and destroyed /// (`to` == 0). Exception: during contract creation, any number of NFTs /// may be created and assigned without emitting Transfer. At the time of /// any transfer, the approved address for that NFT (if any) is reset to none. event Transfer(address indexed _from, address indexed _to, uint256 indexed _tokenId); /// @dev This emits when the approved address for an NFT is changed or /// reaffirmed. The zero address indicates there is no approved address. /// When a Transfer event emits, this also indicates that the approved /// address for that NFT (if any) is reset to none. event Approval(address indexed _owner, address indexed _approved, uint256 indexed _tokenId); /// @dev This emits when an operator is enabled or disabled for an owner. /// The operator can manage all NFTs of the owner. event ApprovalForAll(address indexed _owner, address indexed _operator, bool _approved); /// @notice Count all NFTs assigned to an owner /// @dev NFTs assigned to the zero address are considered invalid, and this /// function throws for queries about the zero address. /// @param _owner An address for whom to query the balance /// @return The number of NFTs owned by `_owner`, possibly zero function balanceOf(address _owner) external view returns (uint256); /// @notice Find the owner of an NFT /// @dev NFTs assigned to zero address are considered invalid, and queries /// about them do throw. /// @param _tokenId The identifier for an NFT /// @return The address of the owner of the NFT function ownerOf(uint256 _tokenId) external view returns (address); /// @notice Transfers the ownership of an NFT from one address to another address /// @dev Throws unless `msg.sender` is the current owner, an authorized /// operator, or the approved address for this NFT. Throws if `_from` is /// not the current owner. Throws if `_to` is the zero address. Throws if /// `_tokenId` is not a valid NFT. When transfer is complete, this function /// checks if `_to` is a smart contract (code size > 0). If so, it calls /// `onERC721Received` on `_to` and throws if the return value is not /// `bytes4(keccak256("onERC721Received(address,address,uint256,bytes)"))`. /// @param _from The current owner of the NFT /// @param _to The new owner /// @param _tokenId The NFT to transfer /// @param data Additional data with no specified format, sent in call to `_to` function safeTransferFrom(address _from, address _to, uint256 _tokenId, bytes data) external payable; /// @notice Transfers the ownership of an NFT from one address to another address /// @dev This works identically to the other function with an extra data parameter, /// except this function just sets data to "". /// @param _from The current owner of the NFT /// @param _to The new owner /// @param _tokenId The NFT to transfer function safeTransferFrom(address _from, address _to, uint256 _tokenId) external payable; /// @notice Transfer ownership of an NFT -- THE CALLER IS RESPONSIBLE /// TO CONFIRM THAT `_to` IS CAPABLE OF RECEIVING NFTS OR ELSE /// THEY MAY BE PERMANENTLY LOST /// @dev Throws unless `msg.sender` is the current owner, an authorized /// operator, or the approved address for this NFT. Throws if `_from` is /// not the current owner. Throws if `_to` is the zero address. Throws if /// `_tokenId` is not a valid NFT. /// @param _from The current owner of the NFT /// @param _to The new owner /// @param _tokenId The NFT to transfer function transferFrom(address _from, address _to, uint256 _tokenId) external payable; /// @notice Change or reaffirm the approved address for an NFT /// @dev The zero address indicates there is no approved address. /// Throws unless `msg.sender` is the current NFT owner, or an authorized /// operator of the current owner. /// @param _approved The new approved NFT controller /// @param _tokenId The NFT to approve function approve(address _approved, uint256 _tokenId) external payable; /// @notice Enable or disable approval for a third party ("operator") to manage /// all of `msg.sender`'s assets /// @dev Emits the ApprovalForAll event. The contract MUST allow /// multiple operators per owner. /// @param _operator Address to add to the set of authorized operators /// @param _approved True if the operator is approved, false to revoke approval function setApprovalForAll(address _operator, bool _approved) external; /// @notice Get the approved address for a single NFT /// @dev Throws if `_tokenId` is not a valid NFT. /// @param _tokenId The NFT to find the approved address for /// @return The approved address for this NFT, or the zero address if there is none function getApproved(uint256 _tokenId) external view returns (address); /// @notice Query if an address is an authorized operator for another address /// @param _owner The address that owns the NFTs /// @param _operator The address that acts on behalf of the owner /// @return True if `_operator` is an approved operator for `_owner`, false otherwise function isApprovedForAll(address _owner, address _operator) external view returns (bool);}
Notice that for an ERC-20 token, we can store the balance of all token holders with the following data structure:
mapping(address => uint) balances;
In the case of the ERC-721 token standard, this is not enough, since using just this data structure would imply that all tokens of an ERC-721 contract are fungible. Therefore, we want to use the following data structures:
The balances data structure will map accounts to the number of non-fungible tokens they hold. The data structure holders, meanwhile, will map the ID of each non-fungible token to the address which holds the token. Therefore, by adding just another mapping, we've just allowed our token contract to incorporate non-fungible tokens!
