Content creators need more token standards, says Folklore founder
Ethereum’s ERC-721 and ERC-1155 are probably the most recognizable examples of token standards in blockchain today.
They are like blueprints, specifying rules for how tokens behave in a protocol and simplifying the creation process. Their pre-determined set of rules provides a sort of “package deal” with a variety of features. In addition, they can be confident that they have been carefully audited and confirmed to be compatible with a variety of applications.
Without standards, a creator may have more customizability, but may run into serious problems when trying to interact with platforms and interfaces.
So it may be surprising to find that many common NFT features, such as embossing and burning, do not exist as standards. Even the way the InterPlanetary File System, or IPFS, is used to store an NFT’s metadata is not actually standardized.
Folklore founder Rafa spoke with host Chase Chapman about the complexities of standardizing a wider range of NFT interactions on a recent episode of the On the Other Side podcast.
He acknowledges that, as much as it is a cliché to say, we are still very early days. “We’ve barely scratched the surface of what it means to interact with an NFT, so it’s probably too early to commit to specific standards, but to have an eye toward actually developing those standards, that’s great.”
Token standards like ERC-721 are “very limited on purpose,” says Rafa. “The standard is as small as possible to enable interoperability between any interface that wants to connect” with it.
Using relatively limited standards gives flexibility to service providers, Rafa adds, to create multiple types of contracts, such as coinage.
“That means the protocol you choose gives you the specific coin function that they designed,” notes Rafa. The function can, for example, be gas optimised, enable air drop or have combustion mechanics.
“You can have a number of different features that enhance the interaction with the specific NFT or token that you’re actually creating.”
“This is fantastic for creators,” Rafa continues, “because it allows you to experiment.”
But one thing that shouldn’t be assumed, he says, is that interfaces are going to build interoperability with all sorts of custom features for different mints.
Just as an ERC-721 cannot become an ERC-1155, contracts distributed on one platform, such as Zora, says Rafa, “cannot become a contract hosted on Manifold or Thirdweb.” Compatibility problems are inevitable without standardization.
Creators as providers of content liquidity
Ultimately, Rafa says, a creator’s ability to distribute their content is “predetermined by the interfaces that support your protocol choice.”
If a creator chooses to create a custom coin function, he notes, the ability for people to create a given NFT will be limited to the interfaces that support that particular method. This reduces what Rafa describes as the creator’s “content liquidity”.
Rafa suggests a path to greater content liquidity for creators through standard set expansion. Envisioning creators as providers of content liquidity, Rafa envisions an established standard for minting and burning NFTs as a first step in improving the system.
“The slight downside,” says Rafa, is that the protocol that “lobbies the hardest and has the biggest voice” will be the most influential in determining the standard.
Rafa adds that all protocols that do not already follow the particular standard must then be updated to conform.
“And yes, your contracts, which you may have minted this year, may not be interoperable with many interfaces in the future.”
In the more distant future, Rafa envisions a solution that abstracts away these kinds of problems for creators. An interface can be a kind of “middleware,” he says, “that just trades in and trades out contracts.”
In this scenario, Rafa says, “my audience doesn’t even know what protocol they’re using. We just always use the lowest fee protocol that can be put together with the interface.”
“Protocols become commodities.”
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