What is ERC-721?

In short

ERC-721 is a technical standard for unique tokens, known as NFTs, on Ethereum and compatible networks. It defines how ownership is recorded and how the tokens are transferred.

By the Cryptonomy editorial team · Updated · 2 min read

Think of two tickets to the same concert, but for different numbered seats: they look alike, yet they aren’t the same thing. That’s the idea behind non-fungible tokens (NFTs). ERC-721, which you’ll also see written as ERC721, gives wallets and apps a common set of rules for recognizing and handling them.

A smart contract records each token with an identifier, the token ID, along with its owner’s address. The ID is unique within that particular contract, not across the entire blockchain. To fully identify an NFT, you need the network, the contract address and the token ID.

When the NFT is transferred, the contract updates which address owns it. Its image, name and other attributes can be described in metadata, which is often stored off-chain. So the token and the file you see on your screen aren’t necessarily stored in the same place.

Why it matters

Thanks to these shared rules, an app doesn’t need a different way of handling every collection. A compatible wallet can recognize the owner and request the transfer of an NFT without having been designed specifically for it. We see this common technical language as the standard’s main benefit.

ERC-721 differs from ERC-20, where units of the same token are interchangeable with one another. It also differs from ERC-1155, which can manage many token types in a single contract, both unique ones and ones with multiple copies, and also supports batch transfers.

What to watch out for

A token’s uniqueness doesn’t guarantee authenticity or value. Someone can mint a different NFT with the same image. Owning one also doesn’t automatically transfer copyright in the work: that depends on the terms and the license.

Be careful with access approvals, too. The setApprovalForAll function can allow a third-party address to transfer all the NFTs you hold from that contract. That’s not the same as approving the transfer of a single token. Finally, if the linked files are hosted on a server that shuts down, the NFT may stay in your wallet while its image no longer displays.

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