Is ERC-3525 the future opportunity for NFTs?

The basic protocol on the public chain is the basis for forming various applications. In addition to the cycle alternation of the secondary market, the change of the basic protocol is the core of the application explosion. The previous two rounds of bull markets corresponded to the application of ERC20 homogeneous tokens and ERC721 non-homogeneous tokens.

As a token-based asset, its market supply, demand and liquidity are key factors. ERC20 and ERC721 are two representatives of transaction attributes and asset-unique attributes, and their performance segmentation is also obvious.

In this round of the recent bull market, NFT is the main representative, but because of the limitations of the non-fungible token protocol itself, many functions of NFT cannot be realized, so in the EIP of Ethereum, there is a separate EIP: ERC -3525 is used to extend the NFT protocol ERC-721. It is used to expand the function development for NFT.

However, this EIP is not a fully endorsed proposal, and whether it will be implemented in the future is still unknown. But today, by combing through the content of ERC-3525, let's see if there are possible applications of NFT other than commodity trading.

ERC-3525 is the standard for semi-fungible tokens. To be precise, it is an extension of ERC-721 defined in the smart contract interface set, by introducing a triple scalar model to represent the semi-fungible nature of non-fungible tokens. ERC-3525 tokens can be a representative layer for ERC-721.

The standard details are described as:

ERC-3525 is compatible with ERC-721, and each ERC-3525 token includes an ERC-721 ID attribute to indicate uniqueness. But ERC-3525 also includes a "unit" property, which represents the quantitative nature of the token. Therefore, an ERC-3525 token can be split into several different ERC-3525 tokens with the same properties, but the sum of the units of all split tokens is equal to the sum of the units of the original token. Every ERC-3525 token has a "SLOT" attribute that marks its logical class. Multiple ERC-3525 tokens can be combined into one as long as the SLOT attribute indicates that they belong to the same category.

These settings allow ERC-3525 tokens to exhibit the properties of pointing ERC721 tokens to ERC20 tokens.

This allows ERC721 tokens to have more liquid trading methods, and can also be combined with ERC20 tokens.

For example, in a trading market, each asset needs to be described by one or more custom attributes. When a decentralized exchange that supports an automatic market-making model allows its liquidity providers to specify their pending orders in different price ranges, LP tokens can be described in ERC-721, which is the design in Uniswap V3.

However, the functions of LP tokens are somewhat simple, and it is difficult to make quantitative features, which reduces computability, liquidity and manageability. An intuitive and straightforward way to solve this problem is to directly add an attribute representing a quantitative property to the ERC-721 token, making it most suitable for attribute customization and semi-fungibility.

If the LP token is designed using ERC-3525, it can be split, merged and partially transferred on this basis. But just splitting, merging, and partial transfer may just be a leveraged behavior of secondary transaction liquidity, which requires some value-supported description for the secondary asset of this non-fungible token.

This requires ERC-3525 to add the ability to describe the underlying assets at the protocol layer, which is also required to allow secondary assets to have a larger market and more convenient and fast transaction capabilities, just like the vitality of stable coins that appear in mortgage lending. Same.

Given that ERC-3525 is compatible with ERC-721 at the implementation level, the existing DeFi infrastructure can also apply this protocol smoothly.

But just apply ERC-3525 in Defi protocol? At present, in addition to the commodity trading market shaped by NFT trading platforms and game protocols, they also need more effective liquidity support.

Judging from the path of defi outbreak and nft outbreak, if there is no up and down change in the market, there can be more ways to support users and investors for product and value support, and the bubble of nft will be even bigger. , and maybe nft will bring more market damage.