09/14/2022
WHY DO P2E GAMES USE ERC-1155 TOKENS ?
September 14, 2022
ERC-1155 is an Ethereum token standard that combines two others: ERC-20 and ERC-721.
ERC-20 is used for fungible assets like cryptocurrencies. It allows developers to create their own currencies on Ethereum. For example, the stablecoin USDC, Binance Coin (BNB), or Uniswap (UNI) are all ERC-20 tokens. You can exchange these fungible tokens with another identical currency of the same value. In P2E games, governance and utility tokens used for value transfers deploy ERC-20. An example is the SAND token used in the Sandbox game ecosystem.
ERC-721 is a standard used for most non-fungible assets (NFTs). It’s applied to create unique assets that are indivisible and can’t be exchanged equivalently, unlike ERC-20 tokens. Game assets like heroes, skins, accessories, and metaverse virtual lands are represented by ERC-721 tokens. For example, Sandbox Lands use this standard.
Why do blockchain games need another standard?
It was the blockchain company Enjin that introduced the new ERC-1155 standard. The aim was to address the deficiencies of ERC-20 and ERC-721, particularly in the game industry.
These standards aren’t ideal for play-to-earn games because each asset requires its own dedicated smart contract. Blockchain games include hundreds, if not thousands, of assets. Moreover, many players play the games simultaneously. As a result, transactions become too slow and expensive.
A single contract copes with multiple token types.
A remedy to transaction problems is to use a standard that can represent multiple token types at the same time. This way, you can wrap different asset types in a single contract. As a result, the number of transactions, hence the costs, can be reduced
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