ERC-6551 is based on ERC-20, but expands the capabilities of ERC-20 tokens, allowing them to be issued and controlled by multiple signatures. This means that to perform any transactions with ERC-6551 tokens, the consent of multiple token holders is required.
- How ERC-6551 Works
- Advantages and Applications of the New Ethereum Standard
- Examples of ERC-6551 Tokens
How ERC-6551 Works
The ERC-6551 standard was proposed in 2022 by a team of developers from Conflux. It was designed to address the issue of centralized control of ERC-20 tokens. Currently, most ERC-20 tokens can be issued and controlled by a single individual or organization. This can lead to abuses, such as fund withdrawals or changes to token rules without the consent of token holders.
This makes ERC-6551 tokens more decentralized and resistant to abuse.
ERC-6551 adds two new properties to the ERC-20 standard. The first determines how many signatures are required to execute a transaction. The second - who can sign the transaction. This can be a list of individual addresses or a list of addresses belonging to multiple organizations. To execute a transaction with this token, two out of three signatories must sign the transaction.
Advantages and Applications of the New Ethereum Standard
ERC-6551 offers several advantages compared to ERC-20 tokens without multi-signature support. First and foremost is enhanced security. ERC-6551 makes tokens more secure, making it difficult to withdraw or change them without the consent of token holders. Increased decentralization allows for the distribution of control over tokens among multiple holders. Improved transparency enables tracking of who signed a transaction, enhancing token transparency.
ERC-6551 can be used to create various types of tokens, including:
|Tokens with Limited Emission||ERC-6551 can be used to create limited-emission tokens that can only be issued and controlled by a few people or organizations.|
|Collective Investment Tokens||ERC-6551 allows for the creation of collective investment tokens that require the consent of multiple investors to make decisions.|
|Management Tokens||ERC-6551 can also be used to create governance tokens that allow token holders to vote on changes to protocol rules.|
Examples of ERC-6551 Tokens
The most popular tokens issued in accordance with the ERC-6551 standard include::
- Conflux Token (CFX): This is a governance token for the Conflux blockchain.
- OpenDAO Token (DAO): This is a governance token for the decentralized autonomous organization OpenDAO.
- Gnosis Safe Token (GNO): This is a governance token for the Gnosis Safe vault.
ERC-6551 is an important standard that makes ERC-20 tokens more secure, decentralized, and transparent. It has the potential for wide-ranging applications in various areas, including collective investment, governance, and decentralized autonomous organizations.