ERC-721 is a technical standard on Ethereum that defines how a smart contract creates and tracks non-fungible tokens (NFTs). Each token under the standard has its own ID number and a single owner, so no two are interchangeable. That makes ERC-721 suitable for things that are individual by nature: a piece of digital art, a collectible, a game item, a domain name or a claim on a specific real-world asset.
The standard was proposed as Ethereum Improvement Proposal (EIP) 721 in January 2018 and is now marked "Final". It stands beside the ERC-20 standard for fungible tokens, where every unit is identical, and was later joined by ERC-1155, which handles both kinds in one contract. Because many networks run the same virtual machine, ERC-721 contracts also exist on Polygon, Arbitrum and other Ethereum-compatible blockchains.
ERC-721 in plain terms
Banknotes are fungible: one £10 note is as good as any other, and nobody cares which one they receive. Concert tickets with a seat number are not: row A seat 1 is a different thing from row Z seat 40, even if both cost the same.
ERC-20 is the rulebook for banknote-style tokens. ERC-721 is the rulebook for numbered tickets. It says how each ticket gets its number, how to check who holds it and how it can be handed over, so that every wallet and marketplace can handle any ticket issued under the same rules.
History
The standard grew out of early experiments with unique tokens on Ethereum. CryptoPunks, launched in June 2017, predated any standard, and CryptoKitties, a game of collectible, breedable cartoon cats released by the studio Axiom Zen in November 2017, became so popular that it congested the Ethereum network in December 2017. Dieter Shirley, CryptoKitties' chief technology officer, was one of the authors of EIP-721, together with William Entriken, Jacob Evans and Nastassia Sachs. The proposal was created on 24 January 2018, and the EIP lists CryptoKitties as an implementation of an earlier draft.
Agreeing on one interface meant that a wallet or marketplace written once could display and trade any compliant collection. That interoperability underpinned the NFT market that grew from 2020 onward, from profile-picture (PFP) collections to music and fashion projects.
How the standard works
An ERC-721 contract keeps a record of which address owns each token ID. The pair of contract address and token ID identifies a token uniquely across the whole network. The required functions include:
- balanceOf returns how many tokens from the contract an address holds.
- ownerOf returns the owner of a given token ID.
- safeTransferFrom moves a token and, if the recipient is a contract, checks that it can accept NFTs, so tokens are not sent into contracts that would trap them.
- approve and setApprovalForAll let another address, such as a marketplace, move one token or all of an owner's tokens on their behalf.
Contracts also emit Transfer and Approval events, which block explorers and indexers use to build ownership histories. The standard relies on ERC-165 so other contracts can ask whether a contract supports the ERC-721 interface. An optional metadata extension adds a name, a symbol and a tokenURI for each token, pointing to a JSON file with a description and image link.
The token itself usually holds only that pointer, not the image. Where the file lives therefore matters: projects that store it on the InterPlanetary File System (IPFS) or fully on chain are more durable than those relying on an ordinary web server that can be switched off or changed. Each new token is created through minting, which costs a gas fee like any other contract call; most collections are written in Solidity using audited library code.
Uses
- Digital art and collectibles. Artists sell editions of one; collectors hold them in a crypto wallet and trade them on marketplaces. Some collections release their art under CC0 terms, giving up copyright.
- Names and identity. Names registered on the Ethereum Name Service (ENS) are held as NFTs, so a name such as "alice.eth" can be transferred like any other token.
- Games and virtual worlds. Land parcels in Decentraland and many in-game items are ERC-721 tokens.
- Real-world assets. Firms experimenting with tokenization use NFTs to represent a single property, invoice or warehouse lot. Further examples are collected under NFT use cases.
Limitations and criticism
Owning an NFT does not by itself confer copyright or any legal right in the underlying work; those depend on the licence terms the issuer publishes. Creator royalties on resale are not part of ERC-721. A separate standard, ERC-2981, lets a contract state a royalty, but marketplaces decide whether to pay it, and several stopped enforcing royalties in 2022 and 2023.
Technically, ERC-721 handles one token per transfer, so moving large numbers of items is expensive; this is the main gap ERC-1155 was designed to fill. Market-wise, NFT trading volumes fell sharply after the 2021–2022 peak, and the sector has seen wash trading, copied collections and phishing for setApprovalForAll signatures, which can let an attacker drain every token in a wallet. Regulators have also examined whether some NFT offerings, especially those sold as investments or split into fractional ownership shares, are securities.