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ERC-6551: The ‘Backpack’ Wallet Redefining Web3 Custody and NFT Integration

Date: July 22, 2023

In the ever-evolving world of Web3 projects, the ERC-6551 standard, also known as token-bound accounts, has emerged as a game-changer. This new standard is unlocking a multitude of possibilities across various sectors, including NFTs, gaming, DAOs, and the metaverse.

One of the most significant challenges in the crypto space is the complex nature of wallets, which often act as a major barrier to entry for newcomers. While many companies are striving to simplify the process of connecting wallets and purchasing NFTs, some developers are taking a different approach, updating the underlying infrastructure to achieve seamless integration. Specifically, they are focusing on the Ethereum blockchain, which serves as the home for numerous NFTs.

ERC-6551, an Ethereum Improvement Proposal (EIP) conceived by developers and individuals from Web3 venture studio Future Primitive and NFT creator platform Manifold in February, allows NFTs to function as self-custodial wallets. This revolutionary proposal facilitates various actions, ranging from receiving token airdrops to acquiring derivative collectibles, all within the NFT itself.

Imagine an NFT collection of profile pictures (PFPs) that adopts the ERC-6551 token standard. If this collection has its native cryptocurrency, the NFTs can now securely hold and manage those tokens. Additionally, the NFTs can also handle derivative NFTs, such as digital wearables, leading to the term “backpack” wallet, reflecting their ability to carry and store assets within themselves.

Though ERC-6551 has yet to be officially recognized as a token standard, it is rapidly gaining traction and adoption by various protocols and projects within the space.

For instance, the decentralized social media platform Lens recently announced an update that allows ERC-6551 enabled tokens to take custody of their own profiles on the site. Similarly, fashion designer Jeff Staple’s Web3 studio, Stapleverse, integrated ERC-6551s into its SAPIENZ NFT collection, enabling holders to own external NFTs through their token-bound accounts.

Data from SeaLaunch, a group of pseudonymous blockchain researchers, reveals that as of the latest data, there are nearly 3,775 ERC-6551 based accounts created to date, with over 2,800 accounts created since the beginning of July.

The ERC-6551 standard represents a significant leap forward in improving custody solutions and seamlessly integrating NFTs into the Web3 ecosystem. As adoption continues to grow, it holds the promise of enhancing user experiences and breaking down barriers for newcomers in the crypto world.

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