A composable token is an ERC-998 token, a standard extension to any non-fungible token, adding the ability for such tokens to own other non-fungible (ERC-721) and fungible (ERC-20) tokens.
Simply put, a non-fungible composable token is a portfolio or bundle of digital assets. These bundles can include any type of tokens, including art/game/sport NFTs, regular ERC-20 tokens, crypto derivatives, and more. The ERC-998 token powers a series of new use cases, primarily because it allows several components to connect to generate one umbrella asset. This can help users compose trees of connected ERC721 tokens and enable them to sell or buy batches of ERC721 tokens in a single transfer.
Here is an example to help you better understand the concept of composable tokens. Let’s say that you have 10 ERC-721 tokens, each representing unique digital coins. If you want to sell them, you’ll need to accomplish this on a one-by-one basis. But with composability functionality, you can transfer ownership of all of the 10 ERC-721 tokens to a single parent token. Once done, the parent token owns all the other tokens, allowing you to sell the entire lot at once.
There are two approaches to building composable tokens:
Author:
Radosław Zagórowicz, the CEO and co-founder of Hoard, is an expert software developer and blockchain specialist. With ten years of professional experience, Radoslaw is highly skilled in project management, software design, algorithms and blockchain technology.
With a master’s degree in applied mathematics from the University of Warsaw, Radoslaw has worked as a software developer with prominent brands like Samsung Electronics R&D, and Institute for Structural Research. He is also a founding member of the Golem Network, a board member at imapp.pl, and has been involved with Ethereum ecosystem development since its very beginning.
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