The number of ERC-721 transfers on the Ethereum network has beaten the same metric for another standard, ERC-20. While some users may think ERC-721 is a unique type of token, it is simply the NFT token standard used in every collection out there.
The ERC-721 is a standard for non-fungible tokens, which are unique assets with different values than other tokens issued from one smart contract because of its rarity or visuals.
Each token issued with the ERC-721 standard has a unique variable, called tokenId, which would be globally unique. The tokenId is then used by decentralized apps for giving an output of an image of a certain item.
Despite the massive drop in the popularity of NFTs, the ERC-721 standard is currently surpassing ERC-20 by the number of transactions, which could be tied to several things, including a drop in the activity of DeFi apps that use the ERC-20 standard and the returning popularity of NFT collections.
As CryptoRank’s data suggests, NFT transfers hit a massive spike the market has not seen since 2019 and surpassed the transfer volume of regular ERC-20 tokens.
But while there were no major collection releases nor notable rises in the volume on digital art marketplaces, we may suggest that the volume is tied to projects that utilize the NFT technology.
For example, almost every GameFi project in the industry is actively using ERC-721 on its platforms for unique game items and characters. Other platforms use NFTs as loan collateral or certificates that confirm the lending of funds.
At press time, NFT market capitalization has reached $3.18 billion, with a slight increase in the last few days. Since the all-time high, the NFT market has lost over 50% of its capitalization.
Tomiwabold Olajide
Yuri Molchan