ERC-721 is a token standard on the Ethereum blockchain used for creating non fungible tokens (NFTs). Unlike ERC-20 tokens, each ERC-721 token is unique and cannot be exchanged on a one to one basis with another token. This makes it ideal for representing ownership of digital items such as art, collectibles, or in game assets.
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ERC-721 enables the creation of unique and non interchangeable digital assets.
Each ERC-721 token has a distinct identity and metadata, which allows it to represent specific assets with individual value. These tokens are commonly used in NFT marketplaces, where users can buy, sell, or trade unique digital items. Because each token is different, their value can vary significantly depending on rarity, demand, and utility. While ERC-721 has enabled new forms of digital ownership, it also comes with risks such as market speculation, price volatility, and potential issues with smart contract security.
Short example:
Suppose an artist creates a digital artwork as an NFT using the ERC-721 standard.
Each artwork is minted as a unique token that cannot be replaced or exchanged for another identical token.
The owner of the NFT can prove ownership on the blockchain and sell it on an NFT marketplace.
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