What is Ethereum's ERC-1155?

ERC-1155 is a token standard that enables the efficient transfer of fungible and non-fungible tokens in a single transaction.

Everything that happens on Ethereum, at the most fundamental level, is represented by data. Whether you swap ETH for USDC on Uniswap or buy a CryptoPunk on OpenSea, everything included in the transaction—your wallet address, fungible tokens, non-fungible tokens, decentralized applications, etc.—is broken down into smaller, computer-readable chunks of data.

For a transaction to be considered legitimate, its data must be shared across the network, validated, and processed by computers that then store the transaction data in a block. A transaction's size and complexity determines the cost and time required to process it.

"ERC" stands for Ethereum Request for Comments. It is a type of EIP focused on standards for Ethereum applications, a category that includes tokens.

Tokens are transferable units of value. Colloquially they are referred to as cryptocurrencies or (technically incorrectly) coins. Tokens generally fall into one of two buckets: fungible or non-fungible. Fungible tokens are mutually interchangeable, like dollar bills or pesos. Non-fungible tokens are unique and noninterchangeable, like a painting or book.

How does ERC-1155 work?

The initial motivation behind ERC-1155 was to address challenges faced by blockchain game developers and players. There are plenty of examples of ERC-1155 being used outside of gaming. However, gaming is a great reference use case for understanding how ERC-1155 works.

Massively multiplayer online games (MMOs) contain tens of thousands of items—armor, weapons, shields, skins, coins, badges, castles, etc—that players can collect and trade with one another. Some items like coins are fungible while others like a sword are non-fungible. On the blockchain, each one of these items is a token.

Prior to ERC-1155, each item required its own smart contract. In a game with 100,000 items that means 100,000 smart contracts! As ERC-1155 developer Witek Radomski pointed out, that's like needing a different phone for each app you use. It creates lots of unnecessary redundancy and is an inefficient use of space and money.

With an ERC-1155 token, multiple items can be stored in a single smart contract and any number of items can be sent in a single transaction to one or more recipients. This means if you wanted to send a sword to one friend, a shield to another, and 100 gold coins to both, you could do so in only one transaction.