ERC-6551: Innovations and Challenges of the NFT Standard

The ERC-6551 proposal represents an innovative Token standard that has undergone a disruptive upgrade of the traditional NFT standard. In the recent ETHGlobal Waterloo hackathon, this protocol garnered widespread attention, with 4 out of the 11 finalist projects developed based on this protocol.

The design intention of this new protocol is quite visionary. ERC-6551, as an extension, is capable of being compatible with most existing NFT protocols. The extended NFT can act as an independent account, enabling the nesting and combination of NFTs. More importantly, the transfer of NFTs means the overall transfer of all associated assets, a feature that makes it particularly suitable for on-chain and GameFi scenarios.

NFT as a Historical Attempt for Wallets

The concept of "Token Bound Account" ( TBA ) introduced by ERC-6551 is inspired by SBT. In fact, similar attempts had already emerged a year ago, such as the A3S protocol.

The operation mode of A3S is quite similar to that of ERC-6551:

1. Users mint Commander NFT through smart contracts, automatically deploying the corresponding contract.
2. The ownership of the smart contract points to the NFT holder.
3. The contract can receive various on-chain assets and only allows the owner to operate.

However, ERC-6551 goes a step further; it is not limited to specific NFTs and can be applied to any deployed NFT, such as Azuki or Bored Ape.

The Operating Mechanism of ERC-6551

The core of ERC-6551 lies in its registration and invocation process. It binds NFTs to accounts through smart contracts, enabling NFTs to have functionalities similar to EOA accounts.

Analysis of the Advantages and Disadvantages of ERC-6551

Advantages

1. High Customizability: As a CA address, ERC-6551 enables NFTs to have a carrying capacity similar to that of EOA accounts.
2. Easy to transfer in bulk: Directly transfer account ownership, suitable for on-chain game account transactions.
3. Identity positioning: Can be used in various identity-related application scenarios.

Disadvantages

1. Application layer dependency: The advantages of ERC-6551 are not particularly prominent, while its limitations are relatively obvious.
2. Necessity is questionable: it is difficult to explain why it is essential to use ERC-6551 to achieve the composability of NFTs.
3. Potential abuse risks: The batch transfer function may be abused, such as selling game accounts in bulk.

Summary and Outlook

The sudden popularity of ERC-6551 reflects the market's desire for innovation in NFT protocols. However, the key to realizing the value of NFTs may lie not in the protocol layer, but in the development of the application layer. In the future, NFTs may need to be seen more as consumables, possessing timeliness, burnability, and even the potential to generate higher-value assets through fusion. This shift may better align with the long-term development needs of the ecosystem.