ERC-6551, Token Bound Accounts (TBAs) and Web3 Sub-Accounts

ERC-6551: Tokenized Smart Contract Wallets

ERC-6551 isn’t just another acronym in the blockchain alphabet soup. ERC-6551 represents a significant advancement in the realm of non-fungible tokens (NFTs). Unlike traditional ERC-721 NFTs, which primarily serve as unique digital assets, ERC-6551 introduces smart contract capabilities to NFTs. In essence, it endows NFTs with the ability to function as smart contract wallets.

Think of ERC-6551 tokens as smart contract wallets (read our blogpost here) They can hold tokens and other NFTs, just like regular smart contract wallets. Transactions? Yep, they’ve got that covered too.

FYI - Account abstraction (read our article here) also aims to enhance user experiences by making accounts more programmable. While ERC-6551 focuses on NFTs, both concepts share the goal of allowing users to interact with smart contracts without managing complex cryptographic keys.

Non-Fungible Token Bound Accounts

Regular ERC-721 NFTs have limitations. They can be owned and transferred, but they can’t own other assets or interact with smart contracts. ERC-6551 however uses a permissionless registry compatible with existing ERC-721 NFTs.

Here’s the magic: ERC-6551 creates token-bound accounts (TBAs) for NFTs. These TBAs are like personalized wallets for each NFT. When you create a TBA, it’s linked to the original ERC-721 token. The TBA inherits all the properties and metadata of the NFT. Plus, it can sign messages and verify signatures —an elegant fusion of NFTs and smart contracts.

Use Cases: Composability, Identity, Provenance

Composability: ERC-6551 enables NFTs to interact seamlessly with other tokens and smart contracts. They can own additional tokens or even collaborate in complex decentralized applications. Picture NFTs as digital collaborators, each contributing its unique value.

Identity & reputation: TBAs provide NFTs with on-chain identities. Essentially, each NFT gains a digital passport, allowing it to assert its existence and ownership. For instance, an NFT representing a pixelated cat can now assert its identity on the blockchain.

What is also important is that every address already has a ‘reputation’: has it interacted with other on-chain elements for example. Projects’ airdrops reward such reputation.

Provenance: With TBAs, provenance becomes transparent. We can trace an NFT’s journey—its origin, previous owners, and any significant events it has participated in. This transparency enhances trust and authenticity within the NFT ecosystem.

Agent leverages ERC-6551 to make the illiquid, liquid

The technology underpinning Agent Accounts is the ERC-6551 standard. While the majority of ERC-6551 applications focus on augmenting Non-Fungible Tokens (NFTs), the Agent team recognized its potential as a paradigm shifting DeFi primitive. By leveraging this standard, Agent creates a market dynamic around blockchain addresses without users having to jeopardize their private keys. Practically, previously illiquid assets such as farmed points now become liquid and tradeable.

How? Agent Sub-Accounts are essentially ‘minted’ at creation (like an NFT) - but thanks to the enhancements introduced by ERC-6551, the Sub-Accounts are essentially smart wallets. Meaning in the case of Agent, Sub-Accounts can not only hold NFTs but also other assets such as points, locked tokens,... and other forms of traditionally non-transferable assets.

Combining these two factors means the following for Agent Sub-Accounts:

1. They can be used for example to farm points from dApps or hold locked tokens

2. The Sub-Account (and the assets it holds) becomes tradable at any time, just like trading NFTs on a marketplace

Get started. Get social.

🚀 Getting started on Agent and using its Sub-Accounts is easy. Join the Agency here!

🤝 To learn more about Agent, visit our website, join our Discord and follow us on X/Twitter.