From ERC20, 721, 1155 to 3525: The Path to RWA and Large-scale Applications in Web3

Since the advent of blockchain technology in 2008, the crypto market has experienced rapid development. However, the total market capitalization of the entire crypto market is still less than that of Apple Inc., and Web3 still lacks practical applications. However, a recent research report from Citibank titled "Money, Tokens, and Games" may change this situation. The report views the tokenization of real-world assets (RWA) as a major trend for the next phase, believing it will drive the blockchain and Web3 industry to welcome the next billion users and could bring about economic activities worth trillions of dollars.

In the current trend of RWA, the ERC-3525 standard shows great potential. As a semi-fungible token standard, it combines the features of ERC-20, ERC-721, and ERC-1155, allowing for more effective representation and management of complex assets such as bonds, coupons, invoices, futures, options, and ABS. In this way, ERC-3525 is expected to promote the development of RWA and drive the widespread application of Web3 in the real world.

This article will compare the components of ERC-20, ERC-721, ERC-1155, and ERC-3525, analyze the differences among these token standards, explore the digital world modeling concept of ERC-3525 from three perspectives, and finally look forward to the future application areas of ERC-3525.

Token Standard Comparison: Understanding ERC-3525

( ERC-20

ERC-20 is one of the most widely used token standards on Ethereum, representing fungible tokens. Each token is equal in function and value, with no distinction. Stablecoins are an important application of ERC-20, with each stablecoin being fungible and interchangeable, representing the same value.

Key components: address ) address ### and balance ( value ). The address designates the asset owner, and the balance represents the number of tokens owned by that address.

Advantages: Suitable for interchangeable assets, such as traditional currencies or shares. Widely used in DEX trading pairs, DeFi lending, and liquidity mining. Supports non-integer splitting.

Limitation: Cannot represent unique or non-homogeneous assets.

( ERC-721

ERC-721 describes the creation and management standards for non-fungible token )NFT###. Each ERC-721 token is unique and non-interchangeable, suitable for representing unique digital or physical assets.

Key components: tokenId and owner. tokenId is the unique identifier, and owner is the address of the token holder.

Advantages: Suitable for representing unique items or assets, such as artworks, collectibles, real estate, etc. It has great value in the creation and trading of digital art.

Limitations: Not applicable to fungible assets. Poor liquidity and composability, not divisible.

( ERC-1155

ERC-1155 is a multi-instance token standard that combines the features of ERC-20 and ERC-721. It manages multiple tokens within a single smart contract, where each can be fungible or non-fungible.

Key components: id, value, and owner. The id distinguishes different tokens, value represents the amount of tokens for a specific id, and owner is the owner's address.

Advantages: Can represent both fungible and non-fungible assets simultaneously. Suitable for representing equipment types in games, including non-fungible ) and fungible quantities ###.

Limitations: Implementation is relatively complex. Cannot represent partially exchangeable assets or perform non-integer splits.

( ERC-3525

ERC-3525 is a semi-fungible token standard )SFT( that combines the features of ERC-20, ERC-721, and ERC-1155. It can express and manage complex digital financial assets, offering greater composability.

Key components: id, value, slot, and address. id identifies a globally unique entity, value represents quantity, slot indicates classification, and address represents the address that owns the slot and id.

Advantages: Can represent various complex numerical structures. Highly flexible, supports transfers from id to id, non-integer splitting and combining.

Limitations: Complex structure, high difficulty in understanding and development.

![Introduction for Newcomers丨From ERC20, 721, 1155 to 3525, a detailed description of RWA's path to large-scale landing in Web3])https://img-cdn.gateio.im/webp-social/moments-4a1eb86c7df685e777e2ac997bb30487.webp###

Three-tier Understanding of ERC-3525

1. Splitable Super NFT: Capable of expressing ERC-20, ERC-721, and ERC-1155, and achieving true splitting of NFTs.

2. Universal Digital Container: As an account abstraction, digital assets can be poured into the container as "solution," achieving uniform distribution and combination of assets.

3. Visualized Smart Contracts: Equip containers with real-time displays to showcase internal information and changes, enhancing transparency and management convenience.

Future Applications of ERC-3525

( Real World Assets on Chain ) RWA (

ERC-3525 has significant advantages in the tokenization of securities assets. As a universal digital container, it can represent almost all types of financial assets. The visualization capabilities of smart contracts enhance asset transparency and intuitively present risks.

In supply chain finance, ERC-3525 can create payment accounts and accounts receivable, forming an automatically distributed payment channel. This increases the liquidity and combinability of factoring business, helping to solve the financing difficulties of small and medium-sized enterprises.

![Newbie Guide丨From ERC20, 721, 1155 to 3525, detailing the large-scale implementation of RWA towards Web3])https://img-cdn.gateio.im/webp-social/moments-733df1667bff7178b5a76f2a2975da20.webp###

( virtual assets or goods

ERC-3525 is suitable for representing digital goods such as virtual land, upgradable game items, and virtual membership cards. Its flexibility and compatibility with ERC-721 give it great potential in the intersection of gaming and blockchain.

In terms of customer loyalty programs, ERC-3525 demonstrates significant advantages. It enables point operations from ID to ID, promising to drive large-scale applications of Web3.

![Newcomer Guide丨From ERC20, 721, 1155 to 3525, a detailed explanation of RWA's journey towards large-scale landing in Web3])https://img-cdn.gateio.im/webp-social/moments-b5f34a04d76b97db4c8f45dc328bec7e.webp(

) Social, Identity Domains and Tokenized Accounts

The composability of ERC-3525 gives it an advantage over NFTs in expressing social graphs and implementing soulbound tokens ###SBT(. As a form of account abstraction and digital container, ERC-3525 can serve as a feature-rich "wallet" itself.

![Newcomer Guide丨From ERC20, 721, 1155 to 3525, detailing the large-scale implementation path of RWA towards Web3])https://img-cdn.gateio.im/webp-social/moments-abc7b9a53d897d30dd6b452082510912.webp###

Summary

ERC-3525, as a super NFT that can be split and combined, a universal digital asset container, and a visualized smart contract, shows great potential in solving the value packaging problem. It has significant advantages in areas such as RWA, customer loyalty programs, and gaming, especially in the RWA sub-sector of supply chain finance where its advantages are particularly pronounced.

However, ERC-3525 also faces challenges such as high cognitive thresholds and significant development difficulties. Nevertheless, due to its immense potential yet insufficient attention, ERC-3525 deserves our close attention. We look forward to its important role in the large-scale applications of Web3 in the future.