What are Composable Tokens ERC998 Used For?
What are Non-fungible Composable Tokens?
Non-fungible composable tokens are a portfolio or bundle of digital assets. These bundles can include any type of tokens, including art/game/sport NFTs, regular ERC-20 tokens, crypto derivatives, and more.
In general, the ERC-998 token is similar to the ERC-721 token as both are non-fungible. However, ERC-998 tokens are “composable,” meaning they allow users to “compose” or “organize assets into complex hierarchies” and trade them with single ownership.
• This ERC-998 has a possibility to compose a land into an existing or a new ERC-721 token. In the future, this use case can be extended and create a higher-level ERC-721 token in order to hold a group of lands.
• The ERC-998 token powers a series of new use cases, primarily because it allows several components to connect to generate one umbrella asset.
The non-fungible composable token, ERC-998, can represent more than one digital collectible/asset, be it a group of ERC-20 tokens, a collection of unique ERC-721 tokens, a mix of both, or another ERC-998 token. Besides, it allows non-fungible tokens to own or be owned by other ERC-721 and ERC-20 tokens.
The ERC-998 token powers a series of new use cases, primarily because it allows several components to connect to generate one umbrella asset. This can help users compose trees of connected ERC721 tokens and enable them to sell or buy batches of ERC721 tokens in a single transfer.
Here is an example to help you better understand the concept of composable tokens. Let’s say that you have 10 ERC-721 tokens, each representing unique digital coins. If you want to sell them, you’ll need to accomplish this on a one-by-one basis.
But with composability functionality, you can transfer ownership of all of the 10 ERC-721 tokens to a single parent token. Once done, the parent token owns all the other tokens, allowing you to sell the entire lot at once.
SEE ALSO: Best 10 ERC20 Tokens On the Market
Building Composable Tokens
There are two approaches to building composable tokens:
In this scenario, the composable token stores information about its child tokens. Any ERC-998 token can be transferred into a top-down composable token. Think of this approach as a container for ERC-998 tokens.
You can store and transfer the tokens in and out of it. You can fill the “container” with as many individual ERC-998 tokens as you want, then trade or transfer the composable.
In this scenario, the bottom-up composable tokens store information about the parent tokens. Bottom-up composables can attach themselves as child tokens to other ERC-998 tokens.
For instance, you can attach a whole bunch of bottom-up composables to an ERC-998 token and simply transfer it to someone else. By design, the new owner will now have access to all individual composables that are part of the ERC-998 token.
How to Choose a Composable that Suits You
If you are planning to transfer a bunch of ERC-998 tokens into non-fungible tokens, the top-down composables is the right choice for you. Instead if your goal is to transfer non-fungible tokens into ERC-998 then you must choose bottom-up composables.
Existing Use Case of ERC-998
As mentioned above, you can create a virtual character and own several accessories as virtual assets using ERC-998. Another lively example for its use case could be CryptoRome, the first game to release ERC-998 assets to its players.
Using this token, the player can acquire several lands and thus by owning several underlying assets connected to that land. Due to ERC-998, the player can sell an entire city structure that includes several lands and its dependent assets with just one blockchain transaction.
Possible Use Cases of ERC-998
This ERC-998 has the possibility to compose a land into an existing or a new ERC-721 token. In the future, this use case can be extended and create a higher-level ERC-721 token in order to hold a group of lands.
To think of a more hypothetical use case, a spacecraft can be owned by ERC-721 token and the fuel required to reach the destination can be owned by a different token and both these token assets can be represented in a single ERC-998 token. And such tokens can be auctioned to companies based on space travel.
Frequently Asked Questions (FAQ)
1. What is ERC998?
ERC-9983. is an extension to the ERC-721 standard that adds the ability for non-fungible tokens to own other non-fungible tokens and ERC-20 tokens. Non-fungible tokens that implement ERC998 also implement the ERC-721 standard.
2. What Is ERC-721?
ERC-721 refers to a token standard that can be found on the Ethereum blockchain. The more common term used to refer to these assets is non-fungible tokens; an asset class that exploded in popularity in late 2020 and early 2021. A plane ticket or a trading card is an example of something non-fungible.
3. What is Token ID?
An ID token is a signed assertion of a user’s identity that also contains a user’s basic profile information, possibly including an email address that has been verified by Google. An ID token is available when a Credential object’s user ID matches the user ID of a Google account that is signed in on the device.
4. What is the Purpose of an ID Token?
The purpose of ID token is that it allows the client to verify that a user is who they claim to be. ID tokens are intended to be understood by third-party applications. ID tokens should not be used for authorization purposes. Access tokens are used for authorization.
ERC998 tokens are ERC-998 tokens are “composable,” meaning they allow users to “compose” or “organize assets into complex hierarchies” and trade them with single ownership.
These tokens have offered solutions to existing problems and is still very much capable of solving future problems, space and tech areas for example.
Convert and Withdraw Crypto to Fiat Using Crypto.com: Step-by-Step Guide
Although many people may still be unsure about investing in cryptocurrencies, this sector is undoubtedly expanding steadily without any backdown. One of the main benefits of this digital currency is that transactions may be carried out without the restrictions imposed by governments that apply to fiat money. The truth is that regulations are frequently blamed ...
Buy Pancat Cryptocurrency – (Read This)
The rate of universal adoption of cryptocurrency is increasingly on the rise as the day goes by. To this effect, there are approximately over 420 million crypto users worldwide, which equates to about an average of 4.2% of crypto ownership rates on a global scale. More cryptocurrencies are being unveiled with time and one such ...
How Will Cardano Change The Crypto Landscape in 2023
Cardano is a decentralized PoS blockchain founded in 2015 and has positioned itself as a viable alternative to Bitcoin’s PoW which makes it energy-efficient (0.01% of Bitcoin) while shunning the crypto-mining algorithms. Cardano presents more opportunities for hodlers and investors through staking which makes the PoS mechanism sustainable and environmentally friendly. Exploring Cardano Future The ...