ERC-998 + ERC-1155 = NIFTSY?

4 min readJul 14, 2021

Introduction

A lot has been written about the ERC-721 and a little less about the ERC-1155 & 998, but enough. But today I wanted to talk about the last two. A reasonable question: why?

The answers are

It’s simple: 99% of all articles in English and Russian say that there are such and such standards, that they are applicable in such cases and… as a rule, that’s all there is to it.

Is it possible that the technology has become so perfect that it has no disadvantages?

Yes, there are. And there are quite a few of them. Judge for yourself: “ERC-998 tokens are ‘composite’, which means that assets within the token can be composed or organized into complex positions and traded using a single transfer of ownership.” That is, since the ERC-998 token can own its own unique set of digital assets, it can be seen as an asset portfolio or even as a mini-company for different (types of) assets.

Does it all seem logical? Yes. But let’s go further.

Everything that would normally be seen as a collection (from a pack of cards and a book of historical stamps and/or coupons, coins and whatnot) can be grouped under one token: the Composable Token. And that’s fine.

But what about the fact that it’s all inside one blockchain? Does a collection of stamps depend on one being created in Africa, another in the Far North? No, the value is precisely in… the mix.

That’s why NIFTSY solves exactly this problem: not just by combining assets by naming them the same name (wNFT), but by creating a simple inter-blockchain exchange by freezing wNFT in, say, Ether and deploying a clone of it in, say, Flow.

That is, ERC-998 helps you create a set of ERC-20 & ERC-721 tokens under a single slogan, and wNFT gives you the ability to truly bring that set to the p2p open market. The ERC-1155 standard also has part of this solution, but it is within the composite token, not in its participation in the p2p marketplace.

I call it a solution to the transparency problem. But it’s not the only one.

“Are there more?” — the thoughtful reader will ask? Yes. Here’s a look: ‘The main caveat is that you have to believe that the ERC-998 composite contract has no ability to arbitrarily transfer the child tokens that the contact technically owns.

Blockchain, let me remind you, is about operating in an untrusted environment. And here? So when there is a trust issue — there is either formalisation via a protocol (wNFT from NIFTSY as standard) or oracle, which in this case is an independent (or rather co-dependent) DAO.

Questions

Therefore, today’s material is not primarily aimed at solving problems, but at asking the right questions. I’ll highlight perhaps the three most pressing ones:

The ERC-1155 standard is good for gaming, but it requires either a certain trust or it makes the owner of the common token co-dependent on the subsidiaries. Hence the question — who exactly should the player trust?
The ERC-20 standard could be sent “nowhere” at all, improvements in the ERC-223 format etc. etc. have not (yet) been properly developed. Hence the question — what about ERC-721, ERC-998 & ERC-1155 tokens with the same problem? Even if they have ERC-20 inside?
The ERC-998 standard is good in itself, but it too has an obvious flaw, quote: “the ERC-998 contract requires approval from the child token to use the transferFrom (owner, to, tokenId) function. This function allows the parent smart contract to transfer ownership from the current owner, the user adding the child token to the parent, to the parent smart contract. Alternatively, you can perform the transfer from ERC-721 and ERC-223 directly and use the optional bytes field to specify which NFT in the ERC-998 contract you want to perform the transfer. In this case only one transaction is required to move the composite token. After its completion and successful return, the parent adds the child to the internal mapping. This will ensure that the parent-child relationship is respected later in the transfer.”

Currently, all these problems (and, as we’ll show in the second part) arise for one reason in general: the lack of standardized protocols. And that’s exactly what NIFTSY is doing. How exactly? We’ll tell you next time, but for now:

Let’s conclude with this scheme: