ERC-7628: ERC-721 Ownership Shares Extension

Introduces ownership shares to ERC-721 tokens, allowing for queryable, transferable, and approvable fractional ownership.

Metadata

Status: ReviewStandards Track: ERCCreated: 2024-02-20

Authors

Chen Liaoyuan (@chenly) (cly@kip.pro)

Requires

EIP-721

Links

GitHub page Discussion on Ethereum Magicians

Abstract

This proposal introduces an attribute of ownership and profit share quantities for each token under an NFT. This attribute signifies a stake in the ownership and profit rights associated with the NFT's specific privileges, enabling the querying, transferring, and approval of these shares, thereby making the shares represented by each token applicable in a broader range of use cases.

Motivation

At times, when we wish to distribute dividends or assign rights to tokens of an NFT based on their share of ownership, it becomes necessary to equip each token with an attribute indicating the number of ownership shares. While ERC-1155 allows for the representation of ownership stakes through the balance of a token held by a wallet address, it sacrifices the uniqueness of each token. Conversely, ERC-721 maintains the uniqueness of each token but lacks an attribute to signify the share of ownership rights, and its metadata does not allow for the free transfer of these share quantities by the token owner. This extension seeks to merge the features of ERC-1155 and ERC-721, enabling holders of each share to possess characteristics akin to those of a token owner, thus bridging the gap between share representation and token uniqueness.

Specification

The key words "MUST", "MUST NOT", "REQUIRED", "SHALL", "SHALL NOT", "SHOULD", "SHOULD NOT", "RECOMMENDED", "NOT RECOMMENDED", "MAY", and "OPTIONAL" in this document are to be interpreted as described in RFC 2119 and RFC 8174.

Implementers of this extension MUST have all of the following functions:

Rationale

Share Issuance to a Token

Issuing additional shares to a token allows for flexible management of ownership stakes in digital assets, catering to the evolving needs of stakeholders. It ensures transparency and security in modifying ownership structures directly on the blockchain, facilitating scenarios like profit sharing or investment adjustments.

Transferring Shares to an Address

Enabling shares to be transferred to an address enhances NFT liquidity and accessibility by allowing fractional ownership. This feature supports diverse use cases like fractional sales or collateralization, making NFTs more adaptable and inclusive for a broader audience.

Backwards Compatibility

This standard is fully ERC-721 compatible.

Reference Implementation

Security Considerations

Clear Approvals on Transfer

When transferring token ownership, it is crucial to clear all existing approvals. This precaution prevents previously authorized parties from retaining access after the token has changed hands.

Prevent Reentrancy

Implementations must guard against reentrancy attacks. This involves ensuring that functions altering balances or ownership are secure against such vulnerabilities, particularly during share transfers.

Validate IDs and Addresses

Verifying the legitimacy of token IDs and wallet addresses in all operations is essential. This step helps avoid errors and ensures that tokens and their associated shares are handled correctly.

Manage Shares on Ownership Change

Proper management of share quantities is vital during a token ownership transfer. It's important to ensure that shares are accurately accounted for and transferred alongside the token to maintain the integrity of ownership stakes.