In the last chapter, we explored ERC-20 tokens—the interchangeable, fungible workhorses of Ethereum. They’re ideal for money, governance, and creator coins, such as those on Paragraph. But Web3 isn’t just about fungible tokens. It’s also about uniqueness: assets that are one-of-a-kind, non-replicable, and imbued with individuality.

That’s where ERC-721 and ERC-1155 come in. These token standards expanded Ethereum beyond simple currencies and into the realms of art, collectables, gaming, and property. If ERC-20 is the language of money, ERC-721 is the language of uniqueness, and ERC-1155 is the flexible hybrid that bridges the two.

To fully understand why Paragraph coins are ERC-20, we need to explore what makes ERC-721 and ERC-1155 different—and why fungibility, in this case, matters most.

NFT stands for Non-Fungible Token. Unlike ERC-20 tokens, each NFT is unique. They can’t be exchanged on a one-to-one basis like identical coins, because no two NFTs are alike.

• ERC-20: Each token is like a $1 bill—interchangeable.

• ERC-721: Each token is like a piece of art—unique, with its own value and identity.

This uniqueness is what made NFTs explode in popularity. Suddenly, digital objects—images, collectables, music, even tweets—could be represented as verifiable assets on the blockchain.

ERC-721, introduced in 2018, defined the rules for creating non-fungible tokens on Ethereum. Each token has a unique ID and often points to metadata: images, attributes, and rarity.

Key features include:

• ownerOf(tokenId): Who owns a specific NFT.

• transferFrom(from, to, tokenId): Transfer of a unique item.

• tokenURI(tokenId): Metadata associated with that item (e.g., the image link).

This was the birth of digital ownership in a way the internet had never seen.

• Art → Beeple’s $69 million NFT sale put digital art on the global stage.

• Collectables → CryptoPunks, Bored Apes, NBA Top Shot.

• Property → Real estate deeds and land in virtual worlds (Decentraland, The Sandbox).

• Identity → NFTs as digital IDs or membership cards.

💡 Analogy: If ERC-20 tokens are like identical bus tickets, ERC-721 tokens are like concert tickets with specific seat numbers—each one unique, some more desirable than others.

• Inefficient for large numbers: Each NFT requires its own contract calls.

• Costly on Ethereum mainnet: Minting or trading can cost tens of dollars in gas.

• Single-purpose: Great for uniqueness, but overkill when fungibility is needed.

This is where ERC-1155 enters the picture.

Developers in gaming saw a problem. In blockchain games, players need both fungible items (like gold coins or health potions) and non-fungible items (like unique swords or rare skins). Using ERC-20 for fungible assets and ERC-721 for non-fungible ones was clunky and expensive.

Enter ERC-1155, proposed by Enjin in 2018. It allowed a single contract to manage both fungible and non-fungible tokens simultaneously.

• A single smart contract can create multiple token types.

• Each token ID can represent either a fungible asset (like coins) or a unique item (like an NFT).

• Transfers can be batched, saving massive amounts on gas fees.

💡 Analogy: Imagine a board game. ERC-20 is like having one rulebook for identical coins. ERC-721 is another rulebook for unique cards. ERC-1155 is like a combined rulebook that covers both coins and cards in the same game box.

• Gaming: Items + currencies under one standard (Enjin, Gods Unchained).

• Tickets: Multiple tiers of tickets (general vs VIP) managed together.

• Collectables: Projects combining fungible and unique assets.

This efficiency has made ERC-1155 popular in Web3 gaming and NFT ecosystems, where speed, scalability, and cost savings matter.

• Strengths: Gas-efficient, versatile, supports batch transfers, ideal for mixed economies.

• Weaknesses: More complex to implement, less universally supported than ERC-20 or ERC-721.

Now let’s place them side by side.

💡 Diagram Idea 1: A spectrum line → ERC-20 (Money) → ERC-721 (Art) → ERC-1155 (Gaming Hybrid).
💡 Diagram Idea 2: A Venn-style chart showing ERC-1155 overlapping both ERC-20 and ERC-721.

Now we come to the heart of the matter: why did Paragraph.xyz choose ERC-20 for its coins, instead of ERC-721 or ERC-1155?

• Fungibility is essential. Every Paragraph coin must be interchangeable. A supporter’s coin should have the same value as any other supporter’s coin. This makes them liquid and tradable like money.

• Community over uniqueness. Paragraph coins are about building shared economies, not issuing unique collectables. An ERC-721 model would fragment value.

• Liquidity and exchange support. ERC-20 tokens are universally supported on Uniswap, MetaMask, Coinbase Wallet, and nearly every Ethereum-compatible app. Readers can easily buy, sell, and swap them.

• Simplicity and trust. ERC-20 is the most adopted and tested standard. Choosing it reduces technical risks and increases user confidence.

💡 Analogy: Imagine a writer hosting a dinner party. If they issued ERC-721 NFTs, every plate would be unique and hard to swap. With ERC-20, every plate is the same, and everyone can share equally.

While Paragraph coins are ERC-20 today, we may one day see hybrid models:

• ERC-20 coins for general community support.

• ERC-721 NFTs for rare, signed essays or unique experiences.

• ERC-1155 for mixed bundles (e.g., “coin + collectable NFT” packages).

This layered approach could merge the best of fungibility and uniqueness. But for now, ERC-20 is the backbone—simple, reliable, and perfectly suited for building writer economies.

ERC-20, ERC-721, and ERC-1155 are not competitors—they are complementary tools in the Ethereum ecosystem. Each serves a unique purpose:

• ERC-20 for identical, liquid assets.

• ERC-721 for unique collectables and ownership.

• ERC-1155 for hybrid economies, especially in gaming.

For Paragraph.xyz, the choice of ERC-20 reflects its mission: to turn writing into an economy where every supporter shares in the same currency. It is about fungibility, community, and liquidity—the perfect ingredients for a creator coin.

NFTs and hybrids may enrich the future, but ERC-20 remains the firm foundation on which creator economies like Paragraph are built.

“Help us bring clarity to Web3 publishing! 🚀✨ Subscribe and support this project as we break down ERC-20, NFTs, and beyond—making blockchain simple and practical for writers and creators.”

In the last chapter, we explored ERC-20 tokens—the interchangeable, fungible workhorses of Ethereum. They’re ideal for money, governance, and creator coins, such as those on Paragraph. But Web3 isn’t just about fungible tokens. It’s also about uniqueness: assets that are one-of-a-kind, non-replicable, and imbued with individuality.

That’s where ERC-721 and ERC-1155 come in. These token standards expanded Ethereum beyond simple currencies and into the realms of art, collectables, gaming, and property. If ERC-20 is the language of money, ERC-721 is the language of uniqueness, and ERC-1155 is the flexible hybrid that bridges the two.

To fully understand why Paragraph coins are ERC-20, we need to explore what makes ERC-721 and ERC-1155 different—and why fungibility, in this case, matters most.

NFT stands for Non-Fungible Token. Unlike ERC-20 tokens, each NFT is unique. They can’t be exchanged on a one-to-one basis like identical coins, because no two NFTs are alike.

• ERC-20: Each token is like a $1 bill—interchangeable.

• ERC-721: Each token is like a piece of art—unique, with its own value and identity.

This uniqueness is what made NFTs explode in popularity. Suddenly, digital objects—images, collectables, music, even tweets—could be represented as verifiable assets on the blockchain.

ERC-721, introduced in 2018, defined the rules for creating non-fungible tokens on Ethereum. Each token has a unique ID and often points to metadata: images, attributes, and rarity.

Key features include:

• ownerOf(tokenId): Who owns a specific NFT.

• transferFrom(from, to, tokenId): Transfer of a unique item.

• tokenURI(tokenId): Metadata associated with that item (e.g., the image link).

This was the birth of digital ownership in a way the internet had never seen.

• Art → Beeple’s $69 million NFT sale put digital art on the global stage.

• Collectables → CryptoPunks, Bored Apes, NBA Top Shot.

• Property → Real estate deeds and land in virtual worlds (Decentraland, The Sandbox).

• Identity → NFTs as digital IDs or membership cards.

💡 Analogy: If ERC-20 tokens are like identical bus tickets, ERC-721 tokens are like concert tickets with specific seat numbers—each one unique, some more desirable than others.

• Inefficient for large numbers: Each NFT requires its own contract calls.

• Costly on Ethereum mainnet: Minting or trading can cost tens of dollars in gas.

• Single-purpose: Great for uniqueness, but overkill when fungibility is needed.

This is where ERC-1155 enters the picture.

Developers in gaming saw a problem. In blockchain games, players need both fungible items (like gold coins or health potions) and non-fungible items (like unique swords or rare skins). Using ERC-20 for fungible assets and ERC-721 for non-fungible ones was clunky and expensive.

Enter ERC-1155, proposed by Enjin in 2018. It allowed a single contract to manage both fungible and non-fungible tokens simultaneously.

• A single smart contract can create multiple token types.

• Each token ID can represent either a fungible asset (like coins) or a unique item (like an NFT).

• Transfers can be batched, saving massive amounts on gas fees.

💡 Analogy: Imagine a board game. ERC-20 is like having one rulebook for identical coins. ERC-721 is another rulebook for unique cards. ERC-1155 is like a combined rulebook that covers both coins and cards in the same game box.

• Gaming: Items + currencies under one standard (Enjin, Gods Unchained).

• Tickets: Multiple tiers of tickets (general vs VIP) managed together.

• Collectables: Projects combining fungible and unique assets.

This efficiency has made ERC-1155 popular in Web3 gaming and NFT ecosystems, where speed, scalability, and cost savings matter.

• Strengths: Gas-efficient, versatile, supports batch transfers, ideal for mixed economies.

• Weaknesses: More complex to implement, less universally supported than ERC-20 or ERC-721.

Now let’s place them side by side.

💡 Diagram Idea 1: A spectrum line → ERC-20 (Money) → ERC-721 (Art) → ERC-1155 (Gaming Hybrid).
💡 Diagram Idea 2: A Venn-style chart showing ERC-1155 overlapping both ERC-20 and ERC-721.

Now we come to the heart of the matter: why did Paragraph.xyz choose ERC-20 for its coins, instead of ERC-721 or ERC-1155?

• Fungibility is essential. Every Paragraph coin must be interchangeable. A supporter’s coin should have the same value as any other supporter’s coin. This makes them liquid and tradable like money.

• Community over uniqueness. Paragraph coins are about building shared economies, not issuing unique collectables. An ERC-721 model would fragment value.

• Liquidity and exchange support. ERC-20 tokens are universally supported on Uniswap, MetaMask, Coinbase Wallet, and nearly every Ethereum-compatible app. Readers can easily buy, sell, and swap them.

• Simplicity and trust. ERC-20 is the most adopted and tested standard. Choosing it reduces technical risks and increases user confidence.

💡 Analogy: Imagine a writer hosting a dinner party. If they issued ERC-721 NFTs, every plate would be unique and hard to swap. With ERC-20, every plate is the same, and everyone can share equally.

While Paragraph coins are ERC-20 today, we may one day see hybrid models:

• ERC-20 coins for general community support.

• ERC-721 NFTs for rare, signed essays or unique experiences.

• ERC-1155 for mixed bundles (e.g., “coin + collectable NFT” packages).

This layered approach could merge the best of fungibility and uniqueness. But for now, ERC-20 is the backbone—simple, reliable, and perfectly suited for building writer economies.

ERC-20, ERC-721, and ERC-1155 are not competitors—they are complementary tools in the Ethereum ecosystem. Each serves a unique purpose:

• ERC-20 for identical, liquid assets.

• ERC-721 for unique collectables and ownership.

• ERC-1155 for hybrid economies, especially in gaming.

For Paragraph.xyz, the choice of ERC-20 reflects its mission: to turn writing into an economy where every supporter shares in the same currency. It is about fungibility, community, and liquidity—the perfect ingredients for a creator coin.

NFTs and hybrids may enrich the future, but ERC-20 remains the firm foundation on which creator economies like Paragraph are built.

“Help us bring clarity to Web3 publishing! 🚀✨ Subscribe and support this project as we break down ERC-20, NFTs, and beyond—making blockchain simple and practical for writers and creators.”