An NFT is a non-fungible asset as it is a unique creation that cannot be reproduced or substituted with anything identical. NFTs are created on a variety of blockchains, such as Ethereum, Binance, and others, depending on the preferences of the builder or developer.

Each blockchain has its own set of NFT standards, which are protocols in the form of a set of codes that make it easier for users to mint NFTs. The functions of an NFT are specified by the NFT standard in use. They contain information on the associated smart contract and its functionality, ensuring all transactions related to an NFT follow the blockchain protocol in use.

NFT Standards: An Overview

NFT standards are a subset of smart contract standards and are included in them to explain how to create, issue, and deploy new tokens.

Before looking deeper into NFT standards, first let's understand, smart contract standards. These standards define the rules that a smart contract must follow to make the best use of the underlying blockchain network. They may include information such as name registries, NFT/token standards, library/package formats, and so on.

NFT standards are vital for a blockchain network because they define how tokens can be exchanged and how the blockchain network can preserve a consistent record of those transfers. All multiple implementations of a standard to coexist must adhere to the same interface and rules. When a new project develops a token, standards ensure the token is compatible with current decentralized exchanges, wallets, and other services.

Benefits of NFT standards

Today NFTs are used as digital collectibles, event tickets, to establish proof of ownership, and much more. In a smart contract, NFT standards create a uniform set of code that allows easy integration across different platforms. Interoperability leads to their usage across various platforms leading to an increase in the associated utility value.

Most commonly used NFT standards

Ethereum

All Ethereum NFT standards begin with the abbreviation ERC which stands for Ethereum Request for Comments.

ERC-721

Developed in 2018, It was the first-ever NFT standard to be created. It's a free and open token standard that explains how to create NFTs on the Ethereum platform.

ERC-721 is a protocol that generates non-fungible tokens (NFTs) for single assets. It has ample meta-information and can record transaction history. Additionally, it enables:

• Token transfers from one account to another.
• Generate a view of an account's current token balance.
• Locate and identify the owner of a certain token.
• Shows a network's total token supply.
• Approve transfer of a specific quantity of tokens from one account to a third-party account.

ERC-1155

ERC-1155 tokens allow users to register utility tokens and non-fungible tokens in the same smart contract. It is a standard interface for contracts to manage multiple token types with reduced network congestion and lower gas prices.

It allows users to:

• Transfer multiple assets in a single transaction.
• View the balance of multiple assets in a single call.
• Return crypto sent to the wrong address.
• Approve all tokens to an address.

ERC-1155 can perform the same functions as ERC-20 and ERC-721 but cannot record transaction history.

ERC-998

ERC998 tokens are analogous to ERC721. They can be thought of as an extension of ERC-721. They can store both unique non-fungible tokens and uniform fungible tokens. These are ‘composable” tokens which mean that the assets within this type of token can be composed or organized into complex positions and traded with a single ownership transfer.

The ERC-988 token can be viewed as a one-of-a-kind portfolio of digital assets. These NFTs are used by people to organize their digital assets in a single location. This standard includes four separate token standards, which are as follows:

• ERC998ERC721 (Top-down composable): These ERC998 tokens receive, hold, and transfer ERC721 tokens.
• ERC998ERC20 (Top-down composable): These tokens receive, hold, and transfer ERC20 tokens.
• ERC998ERC721 (Bottom-up composable): These tokens attach themselves to other ERC721 tokens.
• ERC998ERC20 (Bottom-up composable): These tokens attach themselves to ERC20 tokens.

Binance Smart Chain

All Binance Smart Chain token standards begin with the abbreviation BEP which stands for Binance Smart Chain Evolution Proposal.

BEP-721 

BEP-721 is a token standard that allows the creation of NFTs in the Binance Smart Chain (BSC) which is a network that is known to be fast, and reliable with relatively low fees.

BEP-721 is

• An extension of ERC-721.
• Compatible with the Ethereum Virtual Machine.
• Requires BNB as gas fees.
• Allows users to tokenize the ownership of data and attach to it a unique identifier.

BEP-1155

BEP-1155 is like ERC-1155 but on the Binance Smart Chain and hence it boasts all the benefits of the Binance Smart Chain network. Like ERC-1155, BEP-1155 is fungibility-agnostic, that is, it allows users to register both fungible and non-fungible tokens.

BEP-1155 is:

• A multi-token standard
• Allows issue of several one-of-a-kind tokens at once in a single smart contract
• Supports atomic swaps, and batch transactions.

BEP-1155 was primarily created for blockchain games. But with time, it has also found its place in the art industry.

Tezos

TZIP stands for Tezos Improvement Process. All Tezos token standards begin with this abbreviation.

TZIP-12

TZIP-12, also known as the FA2 token standard is a unified token contract interface, which supports a wide range of token types. It supports:

• A single token type per contract or multiple tokens per contract, including hybrid implementations where multiple token kinds.
• Provides a standard Application Programming Interface (API) to transfer tokens.
• Checks token balances.
• Manage operators and manage token metadata.
• Supports a standard API for games, external wallets, and applications.
• Allows developers to define and invent new token types that can support complex token interactions.

Flow

Flow is a blockchain designed primarily for collectibles and games. It offers standards similar to ERC-721 with the advantage of a lower fee. Since Flow powers CryptoKitties, and other NFTs like NBA Top Shot, it is gradually gaining popularity in the NFT space.

Tron

TRC-721

TRC-721 is the equivalent of ERC-721 on the Tron blockchain. Similar to ERC-721, the TRC-721 tokens have unique IDs and are fully compatible with ERC-721. It can implant a hash from IPFS into a Tezos-based token.

There are some fundamental factors to consider while deciding which NFT standard to use:

• Transaction speed, security, and cost
• Smart contract functionality
• Consensus mechanism, scalability, adoption rate, and functionality.

Since NFT standards are part of smart contracts and define their functionality, they can have an impact on project success. Therefore, understanding NFT standards is critical for both builders and collectors.