ERC-6956 is a token standard that makes it possible to peg a cryptocurrency to any asset, physical or digital.
What is ERC-6956?
ERC-6956, also known as asset-linked NFTs, is a proposed token standard for pegging a token 1:1 to a physical or digital asset. The standard aims to create a link between the real world and the blockchain by allowing the tokenization of various assets such as physical collections, machine parts, digital assets, and even club memberships and intangible assets.
In simpler terms, ERC-6956 is an extension of the popular ERC-721 NFT standard and features oracle based authorization. It also authenticates token transfers by verifying control over the underlying asset.
Potential Use Cases
NFTs attached to the said protocol provide flexibility in tokenizing different types of assets with a variety of use cases including but not limited to:
- Physical collections: Assets such as artwork, stamps or coins can be tokenized and property can be easily transferred on the blockchain. This helps reduce fraud, verify the source, and make the ownership transfer process more efficient.
- Machine parts: Tokenizing machine parts enables decentralized supply chain and inventory management. Tracking and verification of individual components becomes easier and prevents counterfeit parts from entering the supply chain.
- Digital assets:Digital assets such as in-game items, virtual land or domain names can be owned, traded and verified in a more secure and transparent way with the implementation of the ERC-6956 standard.
- Abstract entities:Club memberships, licenses or other intangible assets can be represented as tokens, simplifying the issuance, transfer and management of these assets.
