RWA: Understanding Real World Entities with ERC-6960
Blockchain technology is making a noise in various sectors, and the most exciting of these developments is the introduction of the ERC-6960 – RWA – token standard. Also known as the Dual Layer Token (DLT) standard, this new standard is designed to revolutionize the way we handle Real–World Assets (RWAs). So what exactly is the ERC-6960 and how will it change the real world? Let's try to explain it in simple terms.
The Problem With the Current Token Standards Is
It is important to understand the limitations of the current token standards before diving into the ERC-6960. The most common ones, ERC-20 and ERC-721, are the standards used to represent exchangeable (interchangeable) and non-exchangeable (unique) assets, respectively. However, these standards fall short when it comes to representing partial ownership of an asset.
For example, if you want to invest in a real estate or a valuable work of art, you need to buy the entire asset. This is usually very expensive for the average person. This is where the ERC-6960 comes in.
To fully understand the revolution that ERC-6960 has brought, let's compare it with other popular token standards:
ERC-20 : This is the most common token standard used for exchangeable tokens. Exchangeable tokens can be exchanged like currency. One ERC-20 token is the same as the other. However, ERC-20 does not support non-exchangeable or semi-exchangeable tokens and does not allow partial ownership.
ERC-721 : This standard is used for non-exchangeable tokens (NFTs). Each ERC-721 token is unique, which makes them perfect for representing the ownership of unique items or assets. However, like the ERC-20, the ERC-721 does not support partial ownership.
ERC-1155 : This is a more advanced standard that supports both exchangeable and non-exchangeable tokens. It is more flexible than the ERC-20 and ERC-721, but still lacks some features. It does not have built-in support for partial ownership, and it can be inefficient to manage different types of assets within the same contract.
What is ERC-6960?
ERC-6960 is a new token standard designed for Real-world assets. This is a unique way to represent RWAs on the blockchain and support partial ownership. This means that it can break a single entity into smaller pieces, each of which belongs to a different person. Think of it like a pizza: A large pizza can be divided into several slices, each of which belongs to a different person. This is the basic idea behind partial ownership.
Why is the ERC-6960 Important?
The beauty of the ERC-6960 lies in its flexibility and efficiency. It overcomes the limitations of the current token standards, which have difficulty supporting partial ownership of both exchangeable (exchangeable) and non-exchangeable (unique) tokens.
Let's take a painting, for example. With traditional token standards, you may only own the entire table, or you may not own it at all. But with the ERC-6960, you can own part of this table just like you own a slice of pizza. This paves the way for new investment and ownership opportunities that were not possible before.
How Will the ERC-6960 Revolutionize Real-World Assets?
Improved Asset Management : With the ERC-6960, the management of assets becomes more organized and efficient. It is easier for developers to deal with complex scenarios involving different types of entities with multiple properties.
Increased Scalability : The double-layer structure of the ERC-6960 ensures scalability. It is designed to handle various types of assets and their characteristics without sacrificing efficiency. This is very important when dealing with RWAs that may have multiple components and require flexible management.
Enhanced Interoperability : As standard, the ERC-6960 facilitates interaction and integration with other blockchain projects, wallets and Sunday markets, supporting a more cohesive ecosystem. This interoperability is essential for the growth and adoption of blockchain technology in various industries.
Encouraging Innovation: The versatility of the ERC-6960 encourages developers to explore new and creative applications across industries and use cases. The unique combination of MainId and subId structures makes it easier to adapt to different scenarios and requirements, enabling innovative solutions that may not be possible with other token standards.
Impact on Different Sectors
The launch of the ERC-6960 could have a profound impact on various sectors:
Real estate : Partial ownership can make real estate investment more affordable for the average person. Instead of buying the entire property, you can buy part of it.
Art and Collectible Items : Artworks and collectible pieces can be expensive. With the ERC-6960, you can own some of these assets, which makes it more convenient to invest in them.
Finance : The ERC-6960 can revolutionize financial products such as bonds and derivatives by providing partial ownership and more efficient management.
As a result,
In summary, the ERC-6960 is designed to revolutionize the way we handle RWAs. It offers a more flexible, efficient and scalable solution, offering new possibilities for asset management, investment and ownership. As we move forward, it's exciting to see how this new standard will shape the future of blockchain technology and the world in general.
