Everything you need to know about ERC-998 Tokens

Published by

Aug 17, 2021

What are ERC-998 tokens?

 

ERC-998 token is an extension of ERC-721 standard’s functionalities. This token standard is majorly used in creating non-fungible tokens. The NFTs that are created based on this standard can hold other NFTs of different standard like ERC-20 token. A single ERC-998 token can represent a set of similar assets of ERC-721 or ERC-20 tokens tokens and it can also be transferred in a single transaction.  

 

How does ERC-998 works?

 

ERC-998 token standards functions based on two composable tokens, Top-down composables and Bottom-up composables. Both these composable tokens functions similar to ERC-721 token standard and enables them to own or to be owned by other NFT of the same standard or the tokens of ERC-20 standard.

 

Top-Down Composable:

 

It is mainly used to store the data of its child tokens. The way top-down composables works is like filling a container with some unique collectibles and then transferring it to someone else. Here you can carry out the transaction of ERC-721 tokens just like you do with the ordinary ERC-721 tokens.

 

Bottom-Up Composable:

 

In bottom-up composables, the information about the parent tokens is stored. Since bottom-up composables acts as a child tokens, they attach themselves to the other ERC-721. Unlike in top-down composables, here the ERC-721 tokens acts as a container and a stack of bottom-up composables can be transferred to a regular ERC-721 and later can be transferred to someone.

 

Various Use Cases of ERC-998

 

You can create a virtual character or an avatar and can create several accessories using this ERC-998. For example, if you own a virtual cat like a Cryptokitty then you can add accessories like hat, glasses, dresses etc using ERC-998. By adding such accessories, it leads to having ownership over an entire new cat. Another lively example would be the game called CryptoRome which was the first game that released ERC-998 assets to its players. Using ERC-998, the players will have the ability to buy several land and its underlying assets. And this token also allows the players to sell an entire city structure with just one blockchain transaction.

 

Which composable suits you the best?

 

Both these composables serve in a distinctive manner. If your goal is to transfer NFTs into ERC-721 then you must go for bottom-up composables. Or else if you aim to transfer a bunch of ERC-721 tokens into a non-fungible token, then top-down composables would be the right choice for you.

 

However, if you are are planning to have an ERC-998 token of your own then it is better to hire a professional token development company like Security Tokenizer to do the work. With our expertise in the token industry, we provide full stack token development services that meet all your business requirements.

Articles authored by Brian Richards