Source: old yuppie
Both API standards, ERC-3475 and ERC-3525, have multi-layered data structures, so both parties claim that they can be used to build advanced financial assets such as decentralized bonds. And it is precisely because of the overlap of its use cases that the outside world is constantly hearing the comparison, discussion, and even doubts of the two standards.
Author: 237
Original text: “On Sword Web3: ERC-3475 Dialogue with ERC-3525”
On October 14, 2022, D/Bond CPO, EIP-3475 lead author Liu Yu, and Solv Protocol co-founder and EIP-3525 lead author Will jointly held a roundtable on ERC-3475 Dialogue ERC-3525. Based on the characteristics and design concepts of the two major standards, ERC-3475 and ERC-3525, the two discussed the essence of the Token protocol standard, the specific application of SBT, the importance of on-chain Metadata, and the nature of Web3. and clash of opinions.
Both API standards, ERC-3475 and ERC-3525, have multi-layered data structures, so both parties claim that they can be used to build advanced financial assets such as decentralized bonds. And it is precisely because of the overlap of its use cases that the outside world is constantly hearing the comparison, discussion, and even doubts of the two standards.
A discussion: the essence of the Token protocol standard
According to Will, the main author of EIP-3525, as the carrier of Crypto assets, Token mainly includes two components at its core – Ownership and Transfer, namely ownership and transfer.
“The core of the so-called Crypto asset model, from the user’s perspective, is actually two things, one is Ownership, which is the relationship between owners; the other is Transfer, which is the relationship of transfer.”
—Will
In contrast, Liu Yu, the author of EIP-3475, believes that from a global perspective, the essence of Token is actually a format for data storage and reading and writing.
“The so-called Token protocol standard is essentially a data storage format. From this perspective, Transfer is essentially reducing a certain Key => Value from 1 to 0, and at the same time, another Key => Value The process of changing from 0 to 1. The underlying logic is actually a data structure, and the entire Transfer is actually a complete reading and writing process.”
—Liu Yu
When we are discussing Token ontology, we can regard Token as a carrier from the perspective of users like Will. The interaction between the user and the wallet actually involves the operation of this carrier, and the ownership relationship between the address and the Token is actually a proof of possession.
Compared to Will, the same problem appears more abstract in Liu Yu’s perspective. But in fact, as he said, if we look at the scope of the whole picture, we will realize that the ontology of Token is actually a smart contract, in which the corresponding data is recorded through a standard set of data storage. The number of tokens held by the address.
The host also put forward his own opinions on this topic. After the two parties concluded their respective conclusions, the host introduced the topic of SBT (Soul Binding Token), introduced its concept in detail, and asked the guests their views on it.
For SBT, guests from both sides explained their views from their own perspectives. From this, we can also see the focus of the two protocols ERC-3475 and ERC-3525.
The core of ERC-3525 is ownership and transfer. It uses a two-layer architecture to establish a two-layer asset model, so that the protocol can have the characteristics of ERC-20 and ERC-721 at the same time. At the same time, the open features of ERC-3525 make it compatible with protocols such as ERC-721 or ERC-5192.
ERC-3475 starts from the whole and emphasizes the format of data reading and writing. As a non-transferable Token, the core of SBT is actually a set of standard data storage space. The definition of Token as an object should depend on the parameters in the data storage. Compared with the unexplained explanation of ERC-3525, these parameters will be stored on the chain in the form of Metadata in ERC-3475, and provide complete solution.
The second discussion: the importance of on-chain Metadata
In traditional ERC-721 and ERC-1155 schemes, Metadata is usually stored off-chain in the form of URLs. This is because the virtual machine’s reading of variables needs to be defined in advance. Therefore, a structure that can read and write data on-chain and off-chain at the same time is extremely important for any protocol. On this point, Will also reached an agreement with LiuYu.
However, according to Will, the core concept of ERC-3525 is that less is more or that if it is unnecessary, do not increase entities. Therefore, when designing the protocol, it did not integrate any on-chain data storage solution.
At the same time, Will believes that for the design of the Token protocol, we do not need to consider specific application scenarios. Instead, it should be combined with the characteristics of the protocol itself and brought into the scene suitable for the protocol. For example, the most notable feature of ERC-3525 is that it has a two-layer asset model, so it can be reasonably applied in scenarios such as bonds or SBT.
Liu Yu first asked Will about how to store on-chain data in the EIP-3525 document in a specific bond or SBT product design. Liu Yu explained the design idea of ERC-3475’s on-chain metadata storage after receiving Will’s answer of “Do not add entities if not necessary”.
In Liu Yu’s view, the Token standard is like a wheel, and there are usually two ideas for the invention of the wheel:
1. People see a problem that cannot be solved or can not be solved properly by existing solutions, and then directionally invented a wheel to solve the problem.
2. People first invent wheels, and then find suitable usage scenarios for them.
For these two ideas, Liu Yu is more in favor of the first one. In his opinion, the result will determine the process, the method and the purpose of the beginning will also determine the outcome and direction of things, and this is where he and Will, or ERC-3475 and ERC-3525 diverge.
Three Discussions: What is the essence of Web3? Why do we need Web3?
Liu Yu asked during the exchange with Will:
“Why do tools exist? If there are no problems to solve, can tools still be called tools?”
On this question, Will said:
“I’m really afraid that our own preaching will limit everyone’s imagination.”
—Will
So far, the concept of Web3 has not been clearly defined. In the industry, there is a saying that “there are one hundred Web3 in the eyes of one hundred people”. In fact, this is understandable. The subject matter involved in Web3 since its birth is indeed too broad, and it covers all kinds of worlds.
Therefore, Will believes that Builders should not try to outline specific usage scenarios for a protocol, because this may greatly limit people’s imagination of the application of the protocol. He believes that the solution may appear before the problem that needs to be solved, and we only need to bring the protocol with certain characteristics into the application scenario that is compatible with it.
But Liuyu doesn’t think so. He thinks that the essence of Web3 is to find a problem that Web2 can’t solve or can’t solve very well, and then provide an efficient solution for it. At the same time, this solution should have a certain generality, so that it can still be solved easily when encountering similar problems.
“If we were nomads, we might not need wheels. There are nomads who can ride horses.”
—Liu Yu
Epilogue
At the end of the interview, Liu Yu quoted a metaphor from the brief history of mankind – he compared Web2 to a horse-drawn carriage, and Web3 to a diesel locomotive.
When everyone is used to driving a carriage, they will not think that there is anything wrong with the carriage, nor will they think that it is necessary to replace the locomotive. But once it starts to use locomotives on a large scale, the days of the horse-drawn carriage are doomed to be gone, which is why we need Web3.
This roundtable meeting of ERC-3475 and ERC-3525 takes the token protocol itself as the starting point, and gradually extends to core topics such as on-chain Metadata and even the essence of Web3 with the deepening of the topic. At the same time, the two authors provide us with new ideas for looking at the same issue from different perspectives while outputting their personal views. Only in this debate can we get closer to the essence of things.
appendix:
1. ERC-3475
ERC-3475 is a new API standard proposed by the decentralized bond ecological platform D/Bond. The basic principle is that the ID of each bond category can represent a new configurable token type and correspond to each category one by one. , making it practical to issue bonds with multiple redemption data.
ERC-3475 builds a system that can standardize complex financial products including bonds. In the design of the system, the nonce structure is included, and the main data can be stored on the structure in the form of class.
When it is specifically applied to the bond level, according to the different issuance conditions of each bond, the corresponding amount of interest will fluctuate, and at the same time, the redemption time will also change to a certain extent.
By binding the above data to the nonce structure, Metadata also has two major characteristics:
1) ERC-3475 stores Metadata on-chain with two nodes or depths;
2) ERC-3475 has designed a new format for all Metadata that can be read uniformly by both on-chain smart contracts and off-chain front-ends.
2. ERC-3525
ERC-3525 is a new Ethereum Token standard proposed by Solv Protocol. It adopts a two-layer asset model consisting of ID and value, and also defines a new asset class – Semi-Fungible Token (SFT). As the name suggests, SFT is a token type between FT and NFT, which is characterized by both split calculation and uniqueness.
3. SBT (Soul Binding Token)
In May 2022, in the paper “Decentralized Society: Finding the Soul of Web3” jointly published by Ethereum Core founder Vitalik Buterin, E. Glen Weyl and Puja Ohlhaver, they discussed the new Token SBT (Soulbound SBT) for the first time. Tokens) concept, application and implementation technology.
As soon as the paper was published, it immediately caused a heated discussion in the entire cryptocurrency world. So what exactly is Soul Bound Token (SBT)? Before we can figure this out, we need to know what Soulbond is.
The concept of Soulbond comes from the world-famous MMORPG game “World of Warcraft”. It is an underlying game mechanic that prevents equipment from being traded or mailed by tying it to the player character. The original intention of this design is to prevent low-level players from prematurely using powerful equipment that high-level players can access, thereby disrupting the gaming experience in low-level gaming environments.
As the name suggests, the SBT Soul Binding Token is the Token bound to the user’s account or wallet. Once this Token is generated, it cannot be traded. SBT can be used to represent commitments, qualifications, relationships, etc. Its function is similar to a personal resume, which is issued by the user’s corresponding related party account as a proof of the corresponding social relationship.
SBT can be understood as a permanent, non-transferable token on the public blockchain. It can be distributed in various forms; it can be distributed by anyone. The biggest purpose of SBT is to formalize the interaction between users on the public blockchain so that the world can witness and verify. In this model, in principle, a person’s Crypto identity can be shaped according to the social context simply by constant public interaction.
In Will’s view, SBT is a typical two-layer asset model, which emphasizes both ID and value, so it is highly compatible with the application scenarios of ERC-3525.
LiuYu believes that SBT has essentially abandoned the characteristics of Transfer. According to Will’s view on the nature of Token (the essence of Token is the carrier of Crypto assets composed of Ownership and Transfer), SBT cannot even be regarded as a Token. This further supports its view that the essence of Token is actually a data storage and read-write format.
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