April 11 saw the official release of the ERC-721R Anti rug-pull token standard, a new standard for NFTs that adds an important redemption function to smart contracts, allowing minters to redeem minted NFTs within a certain time frame by getting a corresponding redemption
What is ERC-721 ?
ERC-721 is a type of token first launched in 2017 through the Crypto Kitties project, it is created exclusively for the Ethereum network according to its smart contract standards.
Unlike the previous Token ID concept, each NFT has its own unique Token ID which means they cannot be replaced or replicated. Unlike fiat currencies that have the same value no matter what combination of bills or coins you use, NFTs are unique in what they represent.
So a different value than another token both present on the same Smart Contract, due to different factors, age, rarity, Appearance or other parameters.
ERC-721R Anti rug-pull what is it?
blockchain research institute Chainalysis pointed out that the total volume of crypto fraud in 2021 reached $7.7 billion, an increase of 81% from the previous year. Among them, Rug Pull accounted for 37%, undermining the public’s confidence to trust new tokens completely
Taking Crypto Fighters as an example, the project decided to adopt theERC-721R Anti rug-pull standard, allowing users to request a 100% refund within 45 days.
Specifically, NFTs using the ERC-721R Anti rug-pull standard will set a refund period of a specific duration (determined by the project party, such as one month) at the time of issuance. During this period, users will pay the cost of minting the NFTs. Before the end of the redemption period, Developers will not be able to withdraw funds from the smart contract. Instead, the user can choose to return the NFT within this period.
How does the ERC-721R Anti rug-pull standard work ?
At the time of purchase, based on the duration set in the smart contract, the final redemption date is set and the redemption countdown function is activated During which a redemption can be requested at any time.
Once the refund is requested and received in the wallet, the NFT will not be burned, but will be transferred back to the smart contract holder.
Before the end of the refund period, minting revenue will be blocked in the smart contract address
Developers will be able to withdraw minting revenue once the date stipulated in the smart contract is reached.
If developers make a rug-pull adopting the ERC-721R standard?
If the developer decides to withdraw funds during this period, buyers will be able to claim their funds before the end of the waiting period losing only the gas fee incurred by the transaction costs.
Therefore, the buyer has more advantages:
Low-risk purchases (worst-case scenario only gas fees are lost
)Prevents carpet rippingMore
trust in developers.
What advantages do developers have by adopting ERC-721R?
Establishing trust with potential buyers who favor an ERC-721R standard over ERC-721 or ERC-1155 will be more willing to buy
Some advantages should also be noted. The value of the token will probably not fall below the purchase value, particularly while refunds are still possible.
Redemption times can be freely chosen by developers who choose to adopt the ERC-721R standard.
This will allow for new exchange situations that will lead to development that has been prompted by the current market, which for now has a few projects that have adopted theERC-721R Anti rug-pull standard such as CryptoFighters, Exodia, and Curious Addys.
A refund offer guaranteed by this new standard offers greater protection for buyers and greater legitimacy for creators, thus protecting both sides and representing newcomers to this market.