NFT standards

Feb 27, 2024 3:14:38 PM

Just like fungible tokens, non-fungible tokens also set standards to be followed. Each has its own non- standard. In the network, the most commonly used standard for non-fungible tokens is the NEP11. It defines the methods that the contract must implement to follow such a standard.

Meanwhile, ’s most widely adopted standards are the ERC721 and ERC1155. The primary distinction between the two of them is that, in the ERC721 standard, each NFT has a maximum supply of one item, whereas the ERC1155 standard allows arbitrary supplies of every item.

The difference in standards prompts consideration of the concept of fungibility. Consider a game, for example, in which items are not interchangeable, but there may be multiple units of each item for different players. While a magic hammer cannot replace a magic sword, two magic swords may be the same and are fungible within their own supply. Similarly, album stickers are not fungible, yet there are several units of each sticker available.

Let’s look at another example of tokens that are both fungible and non-fungible simultaneously. A real estate company might write a smart contract for an apartment building and want to sell each apartment through a quota system. This can be simply done adding decimals places to a NFT contract.

In this scenario, every apartment is a NFT, but each NFT could be divided. A person can have 10% of the apartment, so they will own 10% of the total supply of that specific NFT.

Therefore, the fungibility of a token is relative to the context in which it is used and must be understood within that context. There are neither any hard and fast rules that determine what is qualified as a NFT, nor is there any governing body that regulates token issuance on the blockchain. However, following these standards ensure these assets can be easily traded and integrated with other services and wallets.

The best we have so far are standards. Along with the transparency of smart contracts, they allow us to understand what is being issued and in what quantity.