The Underrated ERC3525: A Path Towards Web3 Mass Adoption?#
Since the birth of blockchain technology in 2008, the crypto market has experienced rapid development. However, the total market capitalization of the entire crypto market has yet to surpass that of Apple Inc., and Web3 still lacks practical applications in the real world. Recently, a new research report from Citibank titled "Money, Tokens, and Games" may change this situation. In the report, Citibank identifies the tokenization of real-world assets (RWA) as a major narrative for the next phase, believing it could have a significant impact on the development of Web3, potentially leading the blockchain and Web3 industry to the next billion users and generating economic activities worth trillions of dollars.
Within the grand narrative of real-world asset tokenization (RWA), Spinach believes that the ERC-3525 standard has enormous potential. This is a semi-fungible token (SFT) standard that combines the characteristics of ERC-20, ERC-721, and ERC-1155, allowing it to more effectively represent and manage more complex assets such as bonds, coupons, invoices, futures, options, and ABS. In this way, ERC-3525 has great potential to promote the development of real-world asset tokenization (RWA), thereby driving the widespread application of Web3 in the real world.
This article will compare the components of ERC-20, ERC-721, ERC-1155, and ERC-3525 to help readers understand the differences among these token standards. It will then explore the digital world modeling concept of ERC-3525 from three levels and finally look ahead to the areas where ERC-3525 is worth paying attention to in the future.
Author: Spinach Spinach!
Special thanks to Teacher Sumo for the careful editing and optimization of this article.
Table of Contents#
Background Introduction#
Comparison of Existing ERC Token Standards - How to Understand ERC-3525?#
ERC-20
ERC-721
ERC-1155
ERC-3525
Understanding ERC-3525 as a Digital World Modeling Concept from Three Levels#
Splittable and Combinable Super NFT
Universal Digital Container
Visualized Smart Contracts
Future Areas of ERC-3525 Applications Worth Attention#
Real-World Asset Tokenization (RWA)
Virtual Assets or Goods
Social, Identity Fields, and Tokenized Accounts
Conclusion#
Background Introduction#
Before introducing ERC-3525, let's first explain what EIP and ERC are:
EIP, short for Ethereum Improvement Proposals, is a framework within the Ethereum community that allows anyone to propose improvements or updates to the Ethereum network. These proposals can relate to the Ethereum protocol itself, client APIs, or provide standards for other projects in the Ethereum ecosystem.
ERC, short for Ethereum Request For Comment, is a special type of EIP that focuses primarily on application-level standards, such as smart contract design patterns and interface definitions. These ERCs typically provide a standard template for Ethereum application developers to ensure that different projects and applications can share a common interface or standard. In simple terms, all ERCs are EIPs, but not all EIPs are ERCs; EIPs cover a broader range, including changes to the underlying protocol.
ERC-3525 was created on December 1, 2020, designed by core members of the Solv Protocol and supported by core developers of the Ethereum community. From the initial proposal to final acceptance by the community, this process took 20 months, during which several drafts were refined. It was officially approved as an ERC token standard in September 2022, created by a team of Chinese members. ERC-3525 is now experiencing a new wave of attention in the industry.
Comparison of Existing ERC Token Standards - How to Understand ERC-3525?#
ERC-3525 is a semi-fungible token (SFT) standard. Many people may initially view ERC-3525 as a hybrid of ERC-20 and ERC-721, but in reality, ERC-3525 is a foundational universal standard that has overwhelming advantages over ERC-20, ERC-721, and ERC-1155 in certain areas. Next, Spinach will help readers understand ERC-3525 by comparing the key components (ignoring names, symbols, and other attributes) and advantages and disadvantages of other token standards.
Image Source: solv.finance PPT
ERC-20#
ERC-20 is one of the most widely used token standards in Ethereum applications, which means fungible tokens, where each token is equal in function and value, with no differences. This is why they are referred to as "fungible." Stablecoins are an important example of ERC-20 applications, where each stablecoin is interchangeable and represents the same value.
Key components: address and value. address specifies the address of the asset owner, and value represents the number of tokens owned by that address. Under the ERC-20 standard, each address can be associated with a balance, which represents the number of tokens held by that address, and all balances are the same with no differences.
Advantages: ERC-20 tokens correspond to interchangeable assets, similar to traditional currencies or shares, making ERC-20 very useful in many applications, such as representing company shares or serving as trading pairs on decentralized exchanges (DEX). ERC-20 is also widely used in DeFi applications, such as lending platforms and liquidity mining, and ERC-20 can be non-integer divisible, allowing you to own 0.5 of an ERC-20 token.
Limitations: Since ERC-20 tokens are fully interchangeable, they cannot represent unique or non-fungible assets, such as artwork or collectibles.
ERC-721#
When discussing ERC-721, one cannot overlook non-fungible tokens (NFTs). The well-known NFTs like Bored Apes and Azuki belong to the ERC-721 standard, which describes how non-fungible tokens should be created and managed on the Ethereum blockchain.
Unlike ERC-20 tokens, where each unit is equivalent, each unit of ERC-721 tokens is unique and non-replaceable, making them ideal for representing unique digital or real-world assets (such as artwork, real estate, collectibles, etc.). The earliest NFT, CryptoPunk, was not based on the ERC-721 standard but rather the ERC-20 standard. However, the emergence of CryptoPunk spurred the birth of ERC-721, becoming the cornerstone for many valuable applications like NFTs.
Key components: tokenId and owner. tokenId is a unique identifier used to distinguish different ERC-721 tokens, while owner is the address of the token owner. Under the ERC-721 standard, each token is different and unique, distinguished by the ID attribute, with each ID associated with an owner.
Advantages: ERC-721 tokens are non-fungible, meaning each token is unique. This makes them very suitable for representing unique items or assets, such as artworks, collectibles, real estate, or other unique assets. This also gives them significant value in creating and trading digital art and other unique digital assets.
Limitations: Due to the non-fungible nature of ERC-721 tokens, they cannot effectively represent interchangeable assets, such as currencies or shares, lacking advantages in liquidity and having poor composability; you cannot own 0.5 of an ERC-721 token.
ERC-1155#
ERC-1155 is a multi-instance token standard that combines the features of ERC-20 and ERC-721, aiming to handle multiple types of tokens more efficiently and flexibly. In the previous ERC-20 and ERC-721 standards, each different token required deploying a new smart contract. This means that if you wanted to create a new token, you would need to deploy a new contract, which could lead to redundant code and expensive gas fees. Moreover, different contracts might need to handle complex interactions.
ERC-1155 provides a way to manage multiple tokens within a single smart contract, where each token can be fungible (like ERC-20 tokens) or non-fungible (like ERC-721 tokens). For example, in a game, you could use ERC-1155 to create different types of weapons (non-fungible) such as sticks, knives, and guns, while each weapon type (non-fungible) under each category is fungible, meaning knife 1 and knife 10 are identical (fungible), but knife and gun are different (non-fungible).
Key components: id, value, and owner. id is a unique identifier used to distinguish different ERC-1155 tokens, value indicates the number of tokens for a specific id, and owner is the address of the token owner. Using the weapon example, different weapon types represent different IDs, while the number of weapons under each type (ID) is the Value, and all weapons under each type (Value) are identical.
Advantages: ERC-1155 tokens can represent both interchangeable and non-fungible assets simultaneously, making them very useful in a range of applications. For example, a game might use ERC-1155 tokens to represent player equipment types (non-fungible) and the quantity of equipment (fungible).
Limitations: Although the flexibility of ERC-1155 tokens makes them useful in many cases, this flexibility also makes understanding and implementing ERC-1155 potentially more complex than ERC-20 or ERC-721, and they cannot represent assets that can be partially exchanged, such as bonds or futures, and cannot be non-integer divisible; you cannot own 0.5 of an ERC-1155 token.
ERC-3525#
ERC-3525 is a semi-fungible token (SFT) standard that combines the features of ERC-20, ERC-721, and ERC-1155. It is more complex than ERC-1155 but can express and manage complex digital financial assets such as securities, bonds, options, futures, swaps, insurance policies, etc. Compared to other token standards, it has greater composability. ERC-3525 represents a digital world modeling concept that can be understood from three levels: splittable and combinable super NFTs, universal digital containers, and visualized smart contracts.
Key components: id, value, Slot, and Address. Each SFT has an id attribute equivalent to that of ERC-721 to identify it as a globally unique entity, allowing SFTs to be transferred and approved between addresses in a manner compatible with ERC-721. Additionally, each token contains a value attribute representing the quantity nature of the token, similar to the "balance" attribute of ERC-20 tokens.
Address represents the address that owns the Slot and ID, with each address capable of holding any number and type of IDs and Slots. Uniquely, the Slot attribute allows for the transfer and interchange of Values among different IDs with the same Slot, while transfers and interchanges cannot occur between different Slots. A Slot can have many IDs, but different IDs can only have one Slot.
The focus of ERC-3525 is on the Slot. In simple terms, a Slot represents a category, and many IDs can exist under the same Slot. Although each ID is different and has its own Value, different IDs under the same Slot can be regarded as interchangeable and combinable.
For example, consider a membership card with two Slots: KFC and McDonald's. Each KFC and McDonald's membership card has different IDs representing different people's cards, such as Satoshi's card and Vitalik's card, with each person's card having a Value representing their points.
In the same Slot, such as the KFC membership card, the points in Satoshi's card and Vitalik's card are considered the same. Satoshi can transfer points from his card to Vitalik's card and can also receive points sent from Vitalik's card. Satoshi can also split the points in his card into a main card and a sub-card (two different IDs, with points Value allocated arbitrarily) and can merge the main and sub-cards back together.
However, in different Slots, KFC and McDonald's are two different companies, so points from KFC cannot be transferred to a McDonald's points card, and thus there is no transferability, interchangeability, or combinability between Values and IDs.
Advantages: Due to its more complex structure, ERC-3525 can represent various complex digital structures such as securities, bonds, options, futures, swaps, insurance policies, membership cards, etc. Furthermore, because it is a semi-fungible token, each token can have its own characteristics and rules, making this standard very flexible and powerful. Additionally, due to the existence of Slots, ERC-3525 can facilitate transfers from ID to ID, just like transferring points from Satoshi's points card to Vitalik's points card, and it can also support non-integer splitting and combining.
Limitations: The complex structure of ERC-3525 leads to a higher understanding threshold. The existence of Slots introduces more centralized characteristics in its technical structure. The development difficulty is also higher.
Understanding ERC-3525 as a Digital World Modeling Concept from Three Levels#
Due to its more complex structure compared to other token standards, ERC-3525 serves as a universal token standard that can create various complex token structures in the digital world through the composability of its data structure. Just as LEGO blocks can create various complex models in the real world, ERC-3525 represents a digital world modeling concept. To deeply understand ERC-3525, one can consider three aspects: splittable and combinable super NFTs, universal digital containers, and visualized smart contracts.
Splittable and Combinable Super NFT:
ERC-3525 can express ERC-20, ERC-721, and ERC-1155 token standards by simply converting its attributes. For example:
Expressing ERC-20: When the Slots are the same, the Values between IDs can represent fungible tokens.
Expressing ERC-721: When the Slots are different and there is only one ID, it can represent a non-fungible token.
Expressing ERC-1155: When the Slots are different and there are multiple different IDs, it can represent multi-instance tokens.
However, ERC-3525 goes beyond this; it can achieve the splitting of non-fungible tokens. For example, a Bored Ape can genuinely be split into several parts rather than achieved through an additional contract for NFT fragmentation. For most people encountering ERC-3525 for the first time, the common understanding may be to view ERC-3525 as a splittable and combinable super NFT. From this perspective, understanding ERC-3525 poses no issues, but this is just the tip of the iceberg and does not fully grasp the greater potential of ERC-3525.
Universal Digital Container:
To understand ERC-3525 as a universal digital container, one must recognize that ERC-3525 represents an account abstraction. In the earlier membership card example, ERC-3525 can facilitate transfers between IDs, with the internal IDs essentially functioning as accounts that have receiving, storing, and sending capabilities, much like a basket filled with various digital assets. Since ERC-3525 acts as an abstract account, it means we can decouple the operational permissions of an ID within a Slot and grant them to other wallet addresses, not just the owner of the ERC-3525 smart contract.
The account abstraction of ERC-3525 differs from that of ERC-4337 in that ERC-4337 decouples the signing authority and ownership of smart contract wallets, allowing for custom signing methods for operations, such as traditional account password operations for wallets, while ERC-3525's account abstraction still relies on EOA wallet accounts (wallets operated using private keys) for operations, and an ID can only receive assets within the same Slot.
If the ID of ERC-3525 is understood as an account with receiving, storing, and sending capabilities, it implies that it can serve as a digital asset container. Any digital asset can be poured into this universal digital container, transforming into a uniform solution, making the Value of this ID represent a share of a basket of assets.
For example, in a Slot, if container A (ID: A) is filled with 100 Bitcoins and 10 Ethereums, then Bitcoin and Ethereum, as a solution, enter the container and become a uniform solution. If the Value of container A is evenly divided into ten parts, then each split container will equally contain 10 Bitcoins and 1 Ethereum. If this container is to be combined with another container containing different solution components (100 Doge), the new container's solution will represent 10 Bitcoins, 1 Ethereum, and 100 Doge. Similarly, this container can continue to split and combine, with the solution (Value) representing a share of this basket of assets.
Understanding this layer reveals the magic of ERC-3525. Through its complex data structure and flexible composability, you can create countless complex token structures in the digital world, much like Russian nesting dolls, where many layers of assets can be nested within the container, making it very suitable for expressing structured financial assets like ABS and MBS.
Visualized Smart Contracts:
The idea of "ERC-3525 as a visualized smart contract" is not difficult to understand. If we compare ERC-3525 to a container, it is akin to equipping the container with a real-time updating display screen that shows all information and changes within the container, such as what components are in the solution (what assets and in what proportions). The visualized feature makes it easier to manage and more transparent.
Although it merely implements a visualization of a smart contract, the implications behind it are profound. If ERC-3525 had been widely used before 2008, perhaps the financial crisis would not have occurred. This can be traced back to one of the triggers of the 2008 financial crisis: the chaos of financial derivatives.
After the burst of the internet bubble, the U.S. initiated a low-interest monetary policy to stimulate the economy, leading to more people taking out loans due to low rates. If you've seen the movie "The Big Short," you might recall a scene where a person could secure a loan to buy a house without any collateral, even in the name of their dog. How could such absurd situations occur? Didn't the banks fear these people would default? In fact, banks were not worried at all, thanks to a financial derivative called MBS.
Mortgage-Backed Securities (MBS) are asset-backed securities whose income stream comes from a pool of mortgage assets, such as residential or commercial mortgages. These loans are packaged by lenders (like banks) and sold to special purpose entities (SPEs), which then transform them into securities that can be sold to investors.
This operation essentially packages a group of mortgages into a new financial product for sale to investors. For banks, this operation allows them to transfer the original loan risk and obtain cash by selling these packaged mortgages to earn the interest spread. Loans rated as high-risk, such as no-income, no-collateral loans, are referred to as subprime loans. This is why the 2008 financial crisis is known as the "subprime crisis," as many defaults on subprime loans led to the collapse of the MBS market.
Since mortgage loans can be packaged into financial assets, other loans (like student loans, auto loans, credit card loans) can naturally also be packaged into financial assets, typically referred to as asset-backed securities (ABS). The underlying logic of the income from MBS and ABS comes from the interest and principal repayments of borrowers. These financial derivatives appear to offer high returns, attracting many investors, but problems soon arise.
In this risk-transfer model, banks focus solely on increasing the number of loans, neglecting the importance of loan quality. Many high-risk subprime loans were packaged into ABS and MBS, and as ABS and MBS became popular, financial institutions even began to create more complex financial derivatives—Collateralized Debt Obligations (CDOs).
If ABS and MBS are financial assets packaged from many loans, then CDOs are financial assets packaged from ABS and MBS, forming more layered financial products. By packaging assets of different qualities, the diversity of the investment portfolio is increased, and different payment levels (subordinate—higher yield but first to absorb principal loss in case of default; senior—lower yield but relatively safer principal in case of default) are set, theoretically increasing the overall stability of the portfolio and achieving a better Sharpe ratio (risk-return ratio).
However, these complex financial products made it increasingly difficult for investors to understand their real risks, and the moral hazard of rating agencies further exacerbated this issue. Some rating agencies, in a bid to attract clients, would rate assets that should belong to higher-risk categories as low-risk, further increasing the risk.
Additionally, insurance products like Credit Default Swaps (CDS) further insured, split, and repackaged different levels of CDOs, mixing CDS and other assets into new CDOs, known as Synthetic CDOs. In the end, people were completely unable to discern which assets supported these layers of nested financial derivatives. Many subprime loans were mixed into many so-called low-risk financial derivatives, and distorted ratings allowed high-risk assets to be paired with extremely low premiums. After being layered and packaged, they were sold to various brokerages and investors, leading to a rapid increase in the leverage of the entire financial system, making it increasingly precarious.
As the U.S. began raising interest rates, the increase in loan interest led to many borrowers starting to default. This issue was initially most evident in the subprime loan market, but as subprime loans were packaged in ABS, MBS, and even CDOs, the problem quickly spread through the financial market. Many seemingly high-grade, low-risk financial derivatives suddenly exposed high default risks, while investors remained unaware of the true risks of these derivatives. Market confidence was severely impacted, leading to massive sell-offs in the financial market, which was one of the main triggers of the 2008 financial crisis.
This situation was caused by the disorder, lack of transparency, and overly complex structure of the financial market. However, ERC-3525's visualized smart contracts could precisely address this issue. ERC-3525 can facilitate the nesting of complex financial derivatives like ABS, MBS, and CDOs. More importantly, its visualized feature allows one to directly see the specific components contained within these complex nested products, playing a crucial role in risk control.
In the context of 2008, even the most complex asset securitization products could have their real-time objective ratings calculated based on the yield and default rates of their underlying assets. This increase in transparency, combined with the automatic execution of blockchain smart contracts, enhances the security and trust of transactions, preventing the accumulation of systemic risks.
If ERC-3525 had been applied before 2008, every investor and market participant could have clearly understood their investment situations, and perhaps the crisis of that year would not have occurred. This illustrates the significant importance of ERC-3525's visualized smart contracts for future asset management in real-world asset tokenization (RWA).
Future Areas of ERC-3525 Applications Worth Attention#
As a splittable and combinable super NFT, a universal digital container, and a visualized smart contract, the core competitiveness of ERC-3525 lies in its ability to achieve unparalleled flexibility and composability through data structure transformation, as well as the extreme transparency and execution convenience brought by its visualized features. This innovative structure endows ERC-3525 with significant advantages in several areas, including but not limited to:
Real-World Asset Tokenization (RWA):
The definition of real-world assets (RWA) can be simply understood as all assets outside the blockchain system, including but not limited to currencies, stocks, bonds, commodities, funds, and other securities, as well as real estate, artworks, collectibles, agriculture, climate assets, and intangible assets (such as carbon credits and intellectual property).
According to Citibank's latest research report "Money, Tokens, and Games," it is estimated that by 2030, up to $5 trillion may flow into new forms of digital currencies, such as Central Bank Digital Currencies (CBDCs) and stablecoins, with about half of that funding potentially based on blockchain distributed ledger technology. This prediction focuses on the ongoing legal and technological innovations, with the tokenization of real-world assets (RWA) seen as a key driving factor leading the blockchain industry into a multi-trillion-dollar market. In fact, any asset that can be assigned value, whether wine or financial assets, has the potential to be tokenized, significantly enhancing liquidity and enabling global transactions through blockchain technology.
ERC-3525 has significant advantages in real-world securities assets. As a universal digital container, ERC-3525 can express almost all types of financial assets in the real world, and through the visualized features of smart contracts, it can clearly reveal the internal structure of these financial assets, greatly improving their transparency and presenting risks intuitively.
Moreover, beyond traditional financial assets, ERC-3525 also demonstrates a new possibility in supply chain finance. Leveraging its unique attributes, ERC-3525 can tokenize various assets within the supply chain, including raw materials, production equipment, inventory, accounts receivable, etc. As supply chain finance is one of the major narratives in blockchain, Spinach provides a practical application case to illustrate the disruptive potential of ERC-3525 in supply chain finance:
In supply chain finance, accounts receivable factoring is a common business model. It allows businesses to sell their accounts receivable at a discounted price to third parties (usually factoring companies) to obtain necessary financing and improve their cash flow situation. However, in traditional supply chain finance models, such factoring services are usually only available to large companies and a few reputable small and medium-sized enterprises, leaving most small and medium-sized enterprises struggling to access such services.
The root cause of this issue lies in the difficulty of verifying the authenticity of invoices. Small and medium-sized enterprises generally lack sufficient credit support, making it challenging for investors to conduct reasonable risk control over a large number of small and medium-sized enterprises. This leads to widespread financing difficulties for small and medium-sized enterprises in reality. If small and medium-sized enterprises cannot accept delayed payments, they will find it hard to receive orders from large enterprises; yet accepting orders from large enterprises can lead to tight liquidity and increase the risk of cash flow disruptions.
Imagine if we could tokenize payment invoices in this scenario. Through ERC-3525, we can create a pair of accounts: a Payable account and a Receivable account. These two accounts form a payment channel similar to quantum entanglement; as soon as the buyer remits money to the Payable account, the funds will automatically be distributed to the Receivable account through a smart contract. This means that regardless of how many parts the accounts receivable are split into, no matter who ultimately holds them, the funds will always be transferred to the Receivable account according to the predetermined ratio, greatly increasing the liquidity and composability of supply chain finance factoring business.
In traditional supply chain finance factoring businesses, verifying the authenticity of invoices has always been a challenge. In Western countries, invoices are typically printed by individual companies rather than through a unified channel, making it difficult to discern the authenticity of invoices. Additionally, banks find it challenging to use accounts receivable invoices as collateral because each time collateral is needed, both companies must sign a contract to pledge the invoice's revenue rights, and defaults involve transferring the payment obligations. This significantly hinders most small and medium-sized enterprises from engaging in factoring business and obtaining financing.
However, the application of blockchain technology can change this situation. Through smart contracts, we can add a confirmation step during the invoicing process. Once confirmed, the invoice will be generated with both parties' confirmation signatures attached. This ensures that the invoice is generated in a state confirmed by both parties. Considering that delayed payments are essentially a form of loan provided by the seller to the buyer, if we can effectively resolve the authenticity issue of invoices, sellers can rely on the buyer's credit to sell this accounts receivable to factoring institutions at a certain discount rate, thus obtaining discounted funds.
For example, if a seller has an accounts receivable with a face value of 1 million yuan, and the factoring institution is willing to purchase this receivable at a 90% discount rate, the seller can immediately obtain 900,000 yuan in cash flow without waiting for the buyer's payment. This process essentially accelerates cash flow by transferring credit risk, which can be achieved through ERC-3525 and blockchain technology.
With the traceability and transparency of blockchain, the automatic execution and verification of smart contracts, and the execution convenience of ERC-3525, we can see that ERC-3525 has significant advantages in the tokenization of traditional financial assets, especially in supply chain finance. However, the widespread application of blockchain technology in the RWA space requires support from sovereign governments, regulated financial institutions, and large companies. This aligns with the relatively centralized characteristics of ERC-3525's technical structure. As middleware facilities like oracles continue to evolve and improve, the tokenization of real-world assets will be a significant narrative for ERC-3525 in the future, making it worthy of ongoing attention.
Virtual Assets or Goods:
In addition to representing financial assets, ERC-3525 can also be used to represent virtual digital goods or projects, such as virtual land, upgradable/combinable game items, virtual membership cards, gift cards, lottery tickets, etc. Among these, virtual land, game items, and membership cards are particularly noteworthy areas. For existing game items and virtual land systems, ERC-3525 demonstrates higher possibilities and flexibility. Moreover, ERC-3525 is backward compatible with the ERC-721 standard, meaning that all protocols, platforms, and wallets supporting the ERC-721 standard can easily integrate ERC-3525. This suggests that in the future, the combination of gaming and blockchain may allow ERC-3525 to exhibit higher playability.
With the launch of Starbucks' Odyssey program, the integration of customer loyalty programs with Web3 has garnered widespread attention. This can be understood as a points-based membership card system, and Starbucks has a leading customer loyalty program globally, with millions of active members in the U.S. Notably, membership cards may become a key scenario for Web3 to achieve mass adoption, helping to attract a large number of users into the world of Web3.
From the earlier KFC and McDonald's example, we can see that the ERC-3525 token standard exhibits significant advantages in customer loyalty programs. It can facilitate receiving, transferring, and storing operations from ID to ID, and its Value can effectively represent the points value within the membership card ID. Therefore, ERC-3525 holds high potential in this application scenario and may outperform other token standards in the future.
Social, Identity Fields, and Tokenized Accounts:
Due to the composability of ERC-3525, it can express more data structures, making it potentially advantageous in the current Web3 social field. For instance, protocols like Lens may find using semi-fungible tokens (SFTs) to express social graphs more advantageous than non-fungible tokens (NFTs). Additionally, implementing soulbound tokens (SBTs) through ERC-3525 can express more attributes, such as quantifying contributions of individuals in specific events.
Furthermore, as an account abstraction and digital container, ERC-3525 itself can act as a "wallet." Therefore, in addition to the normal functions of a blockchain wallet, ERC-3525 leaves room for other more imaginative innovations.
Conclusion#
As a splittable and combinable super NFT, a universal digital asset container, and a visualized smart contract, ERC-3525's positioning is not merely to solve the problem of value creation but to address the issue of value packaging. Digital assets can grow a dynamic interface rich in information, allowing for fragmentation, merging, packaging, combining, and programming.
ERC-3525 shows significant advantages in the future trends of Web3. Whether in real-world asset tokenization (RWA), customer loyalty programs, or gaming, ERC-3525 has notable potential. Especially in niche areas of real-world assets like supply chain finance, ERC-3525 has overwhelming advantages compared to other standards, making these developmental directions worthy of our continued attention.
However, ERC-3525 currently faces some challenges and resistance:
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High complexity leads to a higher cognitive threshold, hindering general understanding and acceptance of ERC-3525.
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The development difficulty of ERC-3525 is higher compared to standards like ERC-20, ERC-721, and ERC-1155, placing greater demands on entrepreneurial teams.
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The application scenarios of ERC-3525 may involve sovereign governments and centralized guarantee institutions, falling into a semi-centralized zone, which may conflict with the absolute spirit of decentralization, and the impact on the values of the blockchain world remains uncertain.
Regardless, it is precisely because ERC-3525 has not yet attracted market attention while possessing great potential that it deserves our close observation. We look forward to ERC-3525 playing an important role in the future mass adoption of Web3.
Reference:
[1]https://icg.citi.com/icghome/what-we-think/citigps/insights/money-tokens-and-games
[2]https://eips.ethereum.org/EIPS/eip-3525
[3]https://mp.weixin.qq.com/s/cf8_oDVGBSwXYqEWYmv8uA
[4]https://research.web3caff.com/zh/archives/1996
[5]https://sftlabs.io/2022/09/27/everything-about-fungible-semi-fungible-non-fungible-tokens/