Source: https://www.chaingpt.org/blog/chaingpt-on-erc-6551
A new token standard called ERC-6551 has arrived on-chain and it is supercharging NFTs with value and utility.
Since inception, NFTs have been notorious for their ability to act as tools of speculation, ownership proofs, and community coordination.
While they have expanded the creative capacity of the industry by introducing the concept of non-fungibility and brought an influx of new users, they have been severely limited in their applications.
Beyond art, people had a difficult time finding viable, valuable solutions of what to do with their NFTs.
Enter, ERC-6551.
Released on May 7, 2023, this new token standard revolutionized the very fabric of on-chain ownership by transforming individual NFTs into unique accounts capable of hosting their own wallets.
Through an innovation called TBAs (Token Bounded Accounts), the new ERC-6551 standard isolates a single NFT as an independent account, creates a wallet that is owned by that NFT account, and then links them together.
In order to track all of this activity and understand which NFTs are in possession of which wallets, there is a dedicated TBA registry deployed on-chain.
Basically, we store NFTs in wallets.
Now NFTs can become wallets themselves.
It’s like having an account within your account.
Examples of what can be done with ERC-6551 tokens
DEFI — Decentralized Finance
NFT’ can be imbued with any abstract form of value, be it another NFT or a cryptocurrency. By synthesizing assets under a single address, more sophisticated forms of financialization can take place.
Imagine an Azuki worth a 10 ETH floor price. Not much can be done with it except selling it, lending it out, or possibly getting a loan against it. So let's say we take the loan of 5 ETH.
If the floor price buckles and falls below 6 ETH, we get liquidated and lose the Azuki.
However, if we had upgraded the Azuki to the ERC-6551 standard and given it 7 ETH to hold, we would have been absolutely unbothered, in fact, even if the floor price went to 0. We wouldn’t get liquidated on the simple fact the face value of the collateral Azuki would be greater than the liquidation bound.
On-Chain Identity
Crypto and Web3 is known to be pseudonymous. This characteristic of the on-chain universe has many attractive elements for those who are maximally interested in the preservation of privacy. However, at the same time, it is a hurdle that does not allow for more complex functions, such as un-collateralized loans, to take place because reputation has never had a chance to be developed.
Well, ERC-6551 introduces extreme granularity in the development/maturation of assets and, with the help of the TBA registry, allows for infinitely flexible augmentations to take place. By having provenance fully traceable and a history of asset commitments (alongside their fluctuations) it becomes possible to birth natively on-chain identities.
These identities can be given autonomous functionality because they will have the same associations on-chain as would a traditional EOA (externally owned account)
How to implement ERC-6551 today?
Given how young this standard is there are requirements in order to understand how to create the contracts, how to deploy them, and what specifications must be made in order to make them work…
Luckily, ChainGPT’s AI has already done that work for you!
Immediately after becoming aware of ERC-6551, ChainGPT was fed all relevant information and integrated it into its suite of functions.
Let's ask ChainGPT’s AI to explain what the ERC-6551 standard is:
ERC-6551 is a new standard that enhances the functionality of Non-Fungible Tokens (NFTs) by associating each ERC-721 token with a unique Token Bound Account (TBA). This new standard allows for asset ownership, application interaction, and on-chain operations without changing existing infrastructure. The benefits of ERC-6551 include enhanced security, simplified user experience, transaction efficiency, and innovative use cases like decentralized lending. By equipping ERC-721 tokens with TBAs, ERC-6551 unlocks opportunities in decentralized exchanges, NFT composability, lending platforms, on-chain identities, and automated portfolio management. It maintains backward compatibility and aligns with existing Ethereum infrastructure, driving DeFi adoption and blockchain industry growth.
Impressive Padawan.
Now, let's take it a step further and ask if it can create an ERC-6551 contract for us called CGPTWallet.
Well then.
It seems as though due to its depth of relationship to the Web3/crypto industry (and liveliness) the ChainGPT AI really is advancing faster than every other large language AI model on the market.
Just look at what ChatGPT said about ERC-6551.
We're not here to point fingers.
Just highlighting some facts.
If you are a Web3 project, developer, enthusiast, or just an NFT connoisseur that is excited to start using ERC-6551 as part of your repertoire, we invite you to play around with ChainGPT’s AI.
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See you on the otherside!
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