What Are NFT Token Standards? A Simple Guide to ERC-721, ERC-1155, and More
What Are NFT Token Standards?
NFT Token Standards are predefined rules that govern how non-fungible tokens work on blockchains. Without them, every NFT would behave differently, making it impossible for wallets, marketplaces, and apps to interact with them reliably.
In late 2017, a game called CryptoKitties crashed Ethereum. Why? Because it used a token standard not built for unique items. That moment changed everything. Developers realized they needed specific rules for unique digital assets. This led to the creation of standards like ERC-721, which became the foundation for NFTs as we know them today.
The Birth of ERC-721 and CryptoKitties
Before ERC-721, blockchains used fungible token standards like ERC-20 for things like cryptocurrencies, where each token is identical. But digital art, collectibles, and game items are unique. You can't swap one piece of art for another-they're not interchangeable.
The ERC-721 standard was proposed in January 2017 by Dieter Shirley, CTO of Axiom Zen. It was designed to handle unique tokens. Each token has a unique ID, and the contract tracks who owns it. This allowed projects like CryptoKitties to launch. But there was a problem: every transaction required separate gas fees. Minting 10 CryptoKitties meant 10 transactions, costing hundreds of dollars in gas fees during peak times.
ERC-721: How It Works and Its Limitations
ERC-721 defines core functions like ownerOf, balanceOf, and safeTransferFrom. Each token ID is unique within the contract. This works well for one-of-a-kind items like digital art. However, it has major drawbacks.
Imagine you're a game developer. You have 100 unique weapons in your game. With ERC-721, you'd need 100 separate contracts, each tracking one weapon. Transferring all 100 would require 100 transactions. Gas fees would be astronomical. That's why ERC-721 isn't ideal for games with many similar items.
ERC-1155: The Multi-Token Solution
Enter ERC-1155. Proposed by Witek Radomski of Enjin in 2018, this standard lets a single contract handle multiple token types. Each token type has a unique ID, but you can mint batches of identical items under one ID.
For example, a game could have one contract for swords. Each sword type (like "Steel Sword" or "Dragon Sword") has its own ID. You can transfer 10 swords in one transaction. Gas costs drop by up to 89.7% compared to ERC-721. This made ERC-1155 popular for gaming and apps with multiple similar assets.
But ERC-1155 isn't perfect. Managing metadata for hundreds of token types can get complex. Some marketplaces still prioritize ERC-721 for simplicity.
Other Blockchains' NFT Standards
Ethereum isn't the only blockchain with NFT standards. Solana, Flow, Tezos, and Polygon each have their own approaches.
Solana uses a different model. Its NFT standard is built into the blockchain itself, not as a contract extension. This allows near-instant transactions for $0.00025 per transfer. However, wallet compatibility issues mean only 68% of Solana wallets fully support NFTs.
Flow was built by Dapper Labs for user-friendly NFTs. Its Cadence language uses resource-oriented programming. Transactions cost $0.001, and it handles 10,000 per second. But only 12 major marketplaces support Flow NFTs.
Tezos uses the FA2 standard, which is energy-efficient due to proof-of-stake. It's popular among eco-conscious artists but only represents 1.2% of NFT trading volume.
| Standard | Blockchain | Key Features | Transaction Costs (Avg) | Marketplace Support |
|---|---|---|---|---|
| ERC-721 | Ethereum | Single token per contract, unique IDs | $82.37 (2023 peak) | 97% of Ethereum marketplaces |
| ERC-1155 | Ethereum | Multi-token, batch transfers | 89.7% lower gas costs | 85% of Ethereum marketplaces |
| Solana Standard | Solana | Account-based, fast transactions | $0.00025 per tx | 68% of wallets support |
| Flow Standard | Flow | Resource-oriented, user-friendly | $0.001 per tx | 12 major platforms |
Challenges Across NFT Standards
Despite progress, NFT standards face big hurdles.
Gas fees on Ethereum can spike to $82 per transaction. On Polygon, it's $1.27 for the same task. But moving assets between blockchains is hard. A Solana NFT can't be used on Ethereum without complex bridges.
Regulators are also stepping in. The EU's MiCA law, effective December 2024, requires specific metadata for NFTs classified as asset-referencing tokens. This could favor standards like ERC-1155 that have structured metadata.
Enterprise users report 82% cite cross-chain interoperability as their biggest barrier. For example, a company trying to issue NFTs for loyalty programs struggles when their chosen blockchain doesn't play well with others.
How Creators Choose a Standard
Choosing the right standard depends on your project:
- Artists selling one-of-a-kind pieces: ERC-721 on Ethereum or Polygon. High visibility but costs more.
- Game developers: ERC-1155 for batch transfers or Solana for speed and low fees.
- Environmental concerns: Tezos or Flow. They use less energy than Ethereum's old proof-of-work system.
- Enterprise use: Consortium blockchains with custom standards. Many Fortune 500 companies avoid public chains due to regulatory uncertainty.
A 2023 survey of 1,200 digital artists showed 68% preferred Ethereum for its ecosystem, 22% chose Solana for speed, and 10% picked Tezos for sustainability.
Future Trends in NFT Standards
The NFT space is evolving fast. Ethereum's ERC-6551 introduces token-bound accounts, turning NFTs into self-custodial wallets. Early tests show 40% fewer transactions for complex asset management.
Cross-chain efforts are accelerating. The Blockchain Interoperability Alliance is working on a universal metadata schema. If successful, it could let NFTs move seamlessly between blockchains.
Market trends show 63% of new projects launch across multiple chains. This trend will likely grow as users demand lower costs and better performance.
Regulatory fragmentation remains the biggest risk. Different countries might enforce incompatible standards, creating compliance headaches for global platforms.
Frequently Asked Questions
What is the difference between ERC-721 and ERC-1155?
ERC-721 handles one unique token per contract, ideal for one-of-a-kind items like digital art. ERC-1155 allows multiple token types in a single contract, which is great for games with many similar items (like weapons or skins). It also reduces gas costs by letting you transfer multiple tokens in one transaction.
Why do gas fees vary so much between blockchains?
Gas fees depend on the blockchain's design. Ethereum uses a proof-of-work system that's energy-intensive, leading to high fees during congestion. Solana and Flow use more efficient consensus mechanisms-Solana's is optimized for speed, and Flow's account model avoids gas fees for end users. Polygon, a layer-2 solution, batches transactions to keep fees low.
Can I move an NFT from Ethereum to Solana?
Not directly. NFTs are tied to the blockchain they were created on. To move them, you need a bridge-a special service that locks the original NFT and mints a wrapped version on the new chain. However, bridges carry risks like hacks or loss of ownership. Most experts recommend keeping NFTs on their original chain unless you're certain about the bridge's security.
Which standard is best for environmental sustainability?
Tezos and Flow are the most eco-friendly. Tezos uses proof-of-stake, consuming 99.9% less energy than Ethereum's old proof-of-work system. Flow also uses proof-of-stake. Ethereum transitioned to proof-of-stake in 2022, reducing its energy use significantly, but Tezos and Flow still have lower footprints. For artists focused on sustainability, these are the top choices.
What's the biggest risk for NFT standards?
Regulatory fragmentation. Different countries may impose conflicting rules on NFTs. For example, the EU's MiCA law requires specific metadata for asset-referencing tokens, while the U.S. hasn't settled on a clear framework. This inconsistency makes it hard for global platforms to comply, potentially splitting the NFT market into regional silos.
