{"id":747,"date":"2022-04-25T18:43:16","date_gmt":"2022-04-25T18:43:16","guid":{"rendered":"https:\/\/grandpascrypto.com\/?p=747"},"modified":"2022-04-25T18:43:17","modified_gmt":"2022-04-25T18:43:17","slug":"erc721r-a-step-towards-regulation","status":"publish","type":"post","link":"https:\/\/grandpascrypto.com\/erc721r-a-step-towards-regulation\/","title":{"rendered":"ERC721R: A Step Towards Regulation"},"content":{"rendered":"\n

tl;dr Summary: <\/strong>ERC721R is a new protocol on the Ethereum blockchain that allows for NFTs to be refunded. This adds a new layer of trustless confidence between buyers and creators, and allows creators to be held accountable for their promises.<\/em><\/p>\n\n\n\n

You might have seen Leonardo DiCaprio\u2019s scene in The Wolf of Wall Street where he bragged about the huge upside potential of Aerotyne International to make a grand commission out of the sale. Well, the same hook is what people get caught into when first hearing about NFTs. \u2018Huge upside potential\u2019 and a \u2018get rich quick\u2019 scheme. What they are not told is that for an NFT project to actually succeed, it needs sound fundamentals and actual utility rather than just hype made by greedy influencers. ERC721R or \u2018Refundable NFTs\u2019 is a breakthrough towards preserving trust between the NFT collector and the founding team. <\/p>\n\n\n\n

Problems with NFTs – Beware of Scams!<\/h2>\n\n\n\n

NFT scams have been a hot topic in 2021 mostly in the form of rug pulls<\/a>. Rug pulls are basically the owner of a project running away with the money of the investors. Chainalysis<\/a>, the leading crypto analytics firm tracking all of the transactions, states that:<\/p>\n\n\n\n

\u201cRug pulls have emerged as the go-to scam of the DeFi ecosystem, accounting for 37% of all cryptocurrency scam revenue in 2021, versus just 1% in 2020.\u201d<\/p>\n\n\n\n

So, this means we need regulation and investor security in the crypto space too. Not the one the SEC brags about<\/a>, that is meant for traditional companies. For crypto, regulation needs to uphold values such as trustless interaction, decentralization and open-source protocols. For this, we need code to be law that no one can breach. ERC721R is a step in this direction and hopes to minimize risk. <\/p>\n\n\n\n

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Source: https:\/\/erc721r.org\/<\/figcaption><\/figure>\n\n\n\n

ERC721R – Refundable NFTs<\/h2>\n\n\n\n

To understand ERC721R, we would have to look into what ERC is. So, Ethereum is this universal set of LEGO blocks for software developers allowing anything to be built in a network which is trustless and unchangeable. Considering ERC, it is an acronym for Ethereum Request for Comments. Basically, these are contracts that allow people to interact with and suggest changes to the things built. The famous ones are ERC20 and ERC721. ERC20 is the contract for fungible tokens which are like currency. ERC721 is the contract for non-fungible tokens (NFTs)<\/a> similar to a piece of art, special on its own and only a single one produced. ERC721R is a new addition which is basically an NFT that has a refund feature to give it back to the owner and get your money back if something goes wrong. <\/p>\n\n\n\n

Let\u2019s say you go to Walmart and you buy something that you end up not liking because it’s not what you had thought of or is not useful to you. The Ethereum blockchain is unchangeable and once you buy an NFT it cannot be reverted. However, this additional modifier to the code, which the owner of the collection can add by choice, allows a \u2018refund period\u2019 in which the NFT collector can return the NFT to the owner in case it is not what it was advertised to be. The money spent by the collector is kept in the contract for the refund period inaccessible to the owner. <\/p>\n\n\n\n

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Source: https:\/\/www.cryptofighters.io\/<\/figcaption><\/figure>\n\n\n\n

Projects Already Using ERC721R<\/h2>\n\n\n\n

The first project using this feature for their NFTs are CryptoFighters<\/a>, who allow a refund within 45 days from mint. This is a play to earn strategy game launched in the early days when this concept was not well known. The team has started development on the project with a new roadmap<\/a> and exciting updates ahead. <\/p>\n\n\n\n

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Did you know CATC\ud83d\udc19 was the 1st project to implement a 100-day full refund function post-mint right into the smart contract? \ud83d\udcaf

We think every project should implement this as an industry standard, and here\u2019s why: \u2935

1\/\ud83e\uddf5\ud83c\udf0a<\/p>— Curious Addys (@CuriousAddys) April 11, 2022<\/a><\/blockquote>