Non-fungible tokens (NFTs) have taken the art market by storm. But there are many more uses than that. Martin Hargreaves, Quant’s Chief Product Officer, talks about a new type of NFT, the QRC-721 token, and how it will be used to change the future.
Non-fungible tokens (NFTs) hit their stride in 2021, registering over $25 billion in total sales. Whilst some initial excitement has waned in the ‘crypto winter,’ Ethereum continues to host over 80,000 NFT collections as a pillar within the NFT ecosystem.
Despite its popularity, Ethereum’s primary NFT token standard, ERC-721, has a few limitations. First off, security can be an issue, and unless adequately designed, ERC-721 smart contracts have been subject to hacks. Fraudsters, as well, have found a myriad of ways to steal digital wallet credentials and gain access to administrative controls, costing the industry nearly $87 million in 2022.
Secondly, ERC-721 tokens lack interoperability and are unable to interact seamlessly with blockchains other than Ethereum. This restriction can potentially limit the transactions of digital assets in the metaverse.
Thirdly, developers must know Solidity, a programming language for Ethereum, to execute robust, well-designed ERC-721 tokens, and ensure the code is validated and credentialed.
Of course, auction sites and marketplaces like Rarible and Opensea allow users to mint NFTs; however, these platforms are not made for enterprise use.
Given these factors, we saw a need for an alternative to the ERC-721 token and launched the QRC-721 standard so that users could easily build and deploy secure, interoperable NFTs.
The QRC-721 standard
QRC-721 is a token standard for NFTs for unique and indivisible assets like digital artwork, collectables and physical items on the blockchain.
Unlike QRC-20, QRC-721 is a non-fungible token that doesn’t support fractionalisation. Instead, the QRC-721 code holds rich and extensive NFT metadata. Like the ERC-721 token, its primary functionalities include:
- Transferring digital assets from one account to the other
- Obtaining token balance and setting token supply limits
- Locating the wallet address that holds the NFT.
Key features that set QRC-721 tokens apart include:
QRC-721 smart contracts are enterprise-grade, designed with security in mind by our team of PhDs. These smart contracts are tamper-proof and resilient to diverse attack vectors. We also employ independent experts to review and scrutinise the code for vulnerabilities to help ensure that our NFTs are production-ready.
QRC-721’s tier-one smart contracts will initially run on Ethereum, Polygon, and XDC. However, we plan to expand on its functionality for compatibility with other blockchains.
Importantly, users do not need coding expertise to mint QRC-721 tokens. Overledger Tokenise empowers them to quickly deploy enterprise-grade NFTs using highly-secure smart contract templates. This no-code platform reduces the time-to-market for NFTs and can lower the cost of blockchain and Web3 projects.
Unlocking the full potential of NFTs with QRC-721
QRC-721 smart contracts can support an array of use cases. Users can tokenise art, media, collectables, concert tickets, and make digital twins of real-world products to support proof of provenance. There are also powerful use cases in financial services to tokenise securities, bonds and exchange-traded funds (ETFs).
We also envision uses in supply chain management and asset authentication, for example, to ensure that raw materials are sustainably produced. In addition, QRC-721 tokens could enable retailers to authenticate and track luxury goods to circumvent counterfeiters or help artists own and better manage the intellectual property of their creations.
Lastly, we are testing a loyalty rewards programme utilising QRC-721 NFTs in our Hyperledger Fabric sandbox on Overledger. This programme enables users to request loyalty points (QRC-721 token), check balances for the amount owned, and redeem loyalty points with QRC-20 stablecoins. This example could help transform the loyalty industry, a key customer-retention channel used by airlines, hospitality and other sectors.
We are delighted to bring the QRC-721 token to market, and look forward to seeing a plethora of mDApps and use cases come to life.