It’s Time To Build. The Elrond Standard Digital Token, Non-Fungible & Semi-Fungible Token Specs

Lucian Todea
·
Apr 12, 2021
·
3 min read

The process of tokenization creates a digital asset that retains the value of the underlying asset. As a result, it is immediately eligible for participation in global markets. The digitization of value and assets using blockchain technology will be a tremendous growth catalyst for the new internet economy.

In their current implementation, blockchain tokens require an individual Smart Contract to be deployed and used. This has implications for the cost of creating and managing a token, due to the specific blockchain knowledge and resources required.

The underlying infrastructure is additionally burdened by the storage requirements of the associated Smart Contracts and the computational requirements resulting from calling them for every token operation.

Our implementation of the Elrond Standard Digital Token (ESDT) and Non-Fungible Tokens solves the aforementioned problems and brings a number of innovations that will further expand the value and utility of tokens on the Elrond Network.

High Speeds & Low Costs Thanks To Protocol Integration

The Elrond ESDT standard is implemented directly into the Elrond protocol. One important implication is that a token issued on Elrond does not need its own smart contract, which greatly reduces its storage footprint and cost.

Another important implication is that a token transfer transaction does not need to be processed by the Virtual Machine. Instead, token transfers are done via a regular transaction, by adding the token ID and amount to be transferred into the data field. This increases the transfer speed and reduces the gas requirements down to just the regular TX cost + storage fee for the additional bytes of data in the data field.

True Ownership via Smart Accounts

Elrond Smart Accounts have an associated data trie. This enables any account to have key-value storage where balances of any number of tokens can be stored. This means tokens can effectively belong to an account, instead of being associated with its address in a 3rd party smart contract.

The legal, economical, and psychological implications of true ownership implemented in a high throughput, low latency inexpensive blockchain network will be a powerful catalyst for adoption, even in areas previously not thought possible to decentralize.

Native Use Of Tokens in Smart Contracts

By default, Elrond Smart Contracts are “non-payable”, meaning any simple balance transfer towards them will be automatically rejected, saving a lot of time and money in case of simple mistakes.

When configured as “payable”, a smart contract can accept tokens, and furthermore, can have its functions triggered by ESDT token transfers by method invocation through additional information included in the data field.

High-Speed & Low Cost For NFTs & SFTs

Elrond NFTs are ESDTs with additional metadata. Examples of metadata include royalties information that allows the creator to receive royalties for any transaction involving their NFT, or URI information linking the token to external information, such as the location of an associated media file on a decentralized file system.

This enables high speeds and low costs for Elrond NFTs and SFTs minting, managing, and transferring transactions.

Perhaps even more importantly, the costs associated with NFT and SFT operations are almost negligible:

  • $0.20 to register an NFT brand -> no Ethereum equivalent
  • $0.01 to create an NFT -> $100 - $600 on Ethereum
  • $0.01 to transfer an NFT -> $100 on Ethereum

Fuel For Elrond DeFi 2.0

The ESDT standard is already available on the Elrond Public Devnet and it will be deployed with the next major mainnet upgrade.

The imminent launch of the Maiar Exchange and the other components on the Elrond DeFi 2.0 module will make full use of token innovations pioneered by the Elrond Network.

Transferring stable coins anywhere in the world at near-instant speeds and negligible costs. Swapping assets fast and inexpensive. Minting and transferring NFTs for less than a nickel. All of them with a beautiful UX, available to anyone, anywhere.

Capture your value share of the new internet economy. Get started with Elrond tokens right now:

https://github.com/ElrondNetwork/elrond-specs/blob/main/ESDT-specs.md


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Written by
Lucian Todea
Co-Founder and COO, Elrond Network.