Ethereum, the world's second-largest blockchain platform, has revolutionized the digital world with its smart contract functionality. Ethereum standards, also known as Ethereum Improvement Proposals (EIPs), are protocols and guidelines that define how tokens and contracts should be created and interact within the Ethereum ecosystem. These standards ensure compatibility and interoperability between different tokens and contracts, enabling seamless integration and interaction across various decentralized applications (DApps) and platforms.
ERC-721-C: Enhancing NFT Customizability and Royalties
One of the most prominent Ethereum standards is ERC-721, which introduced non-fungible tokens (NFTs) to the blockchain world. NFTs are unique digital assets that can represent ownership or proof of authenticity for items such as artwork, collectibles, virtual real estate, and more. While ERC-721 established a solid foundation for NFTs, ERC721-C (Ethereum Request for Comment 721-C) builds upon it to offer enhanced control and customizability for NFT creators.
ERC721-C is an opt-in extension of the ERC-721 standard. It empowers NFT creators by providing them with additional capabilities to manage their NFT collections and govern how royalties are handled. By implementing ERC721-C, creators can exercise greater control over their intellectual property and generate recurring revenue from subsequent trades of their NFTs.
NFT Royalties and the Impact of ERC721-C
NFT royalties are fees paid to creators each time their NFTs are sold or traded. However, under the original ERC-721 standard, enforcing royalties on Ethereum NFTs was not fully feasible on-chain. NFT marketplaces like OpenSea and Blur played a significant role in ensuring royalty payments, but the lack of comprehensive on-chain enforcement limited the control NFT creators had over their earnings.
With ERC721-C, royalty logic can be directly embedded into the Ethereum smart contract code, giving creators the ability to enforce and manage royalties programmatically. This feature reduces reliance on external marketplaces for royalty enforcement and provides creators with more control over their revenue streams.
The Programmability of ERC721-C Royalties
ERC721-C introduces programmable royalties, allowing NFT creators to experiment with different royalty settings and distribution models. Here are some examples of how creators can leverage the programmability of ERC721-C:
- Shared Royalties: Creators can split royalties between themselves and early adopters or holders of their NFTs, incentivizing participation and rewarding loyal supporters.
- Minter-Only Royalties: Royalties can be exclusively earned by the original NFT minters, providing an additional incentive for creators to maintain their engagement in the project.
- Contingent Royalties: Creators can define specific criteria to trigger royalty payments, such as requiring the secondary sale price to exceed the original mint price, ensuring that only profitable trades generate royalties.
- Transferrable Royalties: NFT creators can issue separate NFTs to holders that grant them the right to receive royalty income. This allows creators to separate ownership rights from royalty entitlements and create a secondary market for royalty-bearing tokens.
How to Buy ERC721-C Tokens
To buy ERC721-C tokens, you can explore NFT marketplaces that support this new token standard. Limit Break, the organization driving ERC721-C development, has whitelisted the addresses of several marketplaces, including OpenSea, X2Y2, and Rarible. These platforms, among others on the whitelist, have the potential to support ERC721-C tokens.
However, it's important to note that while ERC721-C tokens may be currently supported on certain marketplaces, the implementation of new royalty features may take some time. NFT marketplaces will need to integrate the ERC721-C token
Distributing Utility through NFTs
NFTs have evolved beyond simple digital collectibles and have become a powerful tool for distributing utility to their holders. One innovative approach to distributing utility is through token gating. Token gating allows NFT holders to access exclusive content, discounts, or limited edition items by holding a specific NFT in their wallet. This mechanism creates a sense of exclusivity and incentivizes collectors to acquire and hold onto NFTs for extended periods.
Introducing Percs: Unlocking NFT Utility
Percs has a Shopify app that empowers NFT projects to token gate utility, discounts, and exclusive items for their NFT holders. By integrating Percs into their Shopify store, NFT creators can offer unique perks and benefits to their community, fostering loyalty and engagement.
With Percs, NFT creators can design and implement token gating systems, allowing holders of specific NFTs to unlock exclusive features. For example, an artist could provide access to behind-the-scenes content, early access to new artwork releases, or even virtual events reserved exclusively for NFT holders.
Conclusion
ERC721-C expands on the ERC-721 NFT standard, providing NFT creators with increased control and customizability over their collections. The introduction of programmable royalties through ERC721-C allows creators to enforce royalties on-chain, reducing reliance on external marketplaces. With the ability to experiment with different royalty settings, creators can explore innovative distribution models and share the benefits with their community.
Furthermore, NFTs can distribute utility through tokengating mechanisms, giving holders access to exclusive content, discounts, and other perks. Percs, a Shopify app, facilitates the implementation of tokengating, enabling NFT projects to reward their loyal collectors with unique benefits.
As the NFT ecosystem continues to evolve, standards like ERC721-C and tools like Percs will play a crucial role in shaping the future of digital ownership and providing enhanced experiences for NFT holders and creators alike.
