The Lockable Extension for ERC-1155 introduces a robust locking mechanism for specific Non-Fungible Tokens (NFTs) within the ERC-1155 token standard, allowing for various uses while preventing sale or transfer. The token's owner can lock it, setting up locker address (either an EOA or a contract) that exclusively holds the power to unlock the token. Owner can also provide approval for tokenId, enabling ability to lock asset while address holds the token approval. Token can also be locked by approved, assigning locker to itself. Upon token transfer, these rights get purged.
Inspired by the need for enhanced security and control over tokenized assets, this extension enables token owners to lock individual NFTs with tokenId, ensuring that only approved users can withdraw predetermined amounts of locked tokens. Thus, offering a safer approach by allowing token owners to specify approved token IDs and amounts for withdrawal.
ERC-1155 has sparked an unprecedented surge in demand for NFTs. However, despite this tremendous success, the NFT economy suffers from secondary liquidity where it remains illiquid in owner’s wallet. There are projects which aim to address the liquidity challenge, but they entail the below mentioned inconveniences and risks for owners as they necessitate transferring the participating NFTs to the projects' contracts.
The aforementioned issues contribute to a poor user experience (UX), and we propose enhancing the ERC-1155 standard by implementing a native locking mechanism: Rather than being transferred to a smart contract, an NFT remains securely stored in self-custody but is locked. During the lock period, the NFT's transfer is restricted while its other properties remain unchanged. NFT Owner retains the ability to use or distribute it’s utility.
NFTs have numerous use cases where the NFT must remain within the owner's wallet, even when it serves as collateral for a loan. Whether it's authorizing access to a Discord server, or utilizing NFT within a play-to-earn (P2E) game, owner should have the freedom to do so throughout the lending period. Just as real estate owner can continue living in their mortgaged house, take personal loan or keep tenants to generate passive income, these functionalities should be available to NFT owners to bring more investors in NFT economy.
Lockable NFTs enable the following use cases :
locker, send token to user and lock the asset.This proposal is different from other locking proposals in number of ways:
lock and unlock and believes other conditions like time-bound are great ideas but can be achieved without creating a specific implementation. Locking and Unlocking can be based on any conditions (e.g. repayment, expiry). Therefore time-bound unlocks a relatively specific use case that can be achieved via smart-contracts themselves without that being a part of the token contract.transferAndLock which can be used to transfer, lock and optionally approve token. Enabling the possibility of revocation after transfer.By extending the ERC-1155 standard, the proposed standard enables secure and convenient management of underlying NFT assets. It natively supports prevalent NFTFi use cases such as staking, lending, and renting. We anticipate that this proposed standard will foster increased engagement of NFT owners in NFTFi projects, thereby enhancing the overall vitality of the NFT ecosystem.
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.
ERC-1155 compliant contracts MAY implement this EIP to provide standard methods of locking and unlocking the token at its current owner address.
Token owner MAY lock the token and assign locker to some address using lock(uint256 tokenId, address account, address _locker, uint256 amount) function, this MUST set locker to _locker. Token owner or approved MAY lock the token using lock(uint256 tokenId, address account, uint256 amount function, this MUST set locker to msg.sender. Token MAY be unlocked by locker using unlock(uint256 tokenId, address account, uint256 amount) function.
Token owner MAY approve specific for specific tokenId using setApprovalForId(uint256 tokenId, address operator, uint256 amount) ensuring only approved tokenId could be spent by operator. getApprovalForId(uint256 tokenId, address account, address operator) SHALL return amount approved on account by operator.
If the token is locked, the getLocked(uint256 tokenId, address account, address operator) function MUST return an amount that is locked by operator on account. For tokens that are not locked, the getLocked(uint256 tokenId, address account, address operator) function MUST return 0.
lock function MUST revert if account has insufficient balance or not owner or approved of tokenId. unlock function MUST revert if provided amount of tokenId is not locked. ERC-1155 safeTransferFrom of a token MUST revert if account transfer locked amount, maximum transferable amount MUST be balance - getLocked.
Token MAY be transferred and locked, also assign approval to locker using transferAndLock function. This is RECOMMENDED for use-cases where Token transfer and subsequent revocation is REQUIRED.
This proposal exposes transferAndLock(address from, address to, uint256 tokenId, uint256 amount, bool setApprove) which can be used to transfer token and lock at the receiver's address. This additionally accepts input bool setApprove which on true assign approval to locker, hence enabling locker to revoke the token (revocation conditions can be defined in contracts and approval provided to contract). This provides conditional ownership to receiver, without the privilege to transfer token.
This standard is compatible with ERC-1155 standards.
Existing Upgradeable ERC-1155 can upgrade to this standard, enabling locking capability inherently and unlock underlying liquidity features.
Reference Interface can be found here.
Reference Implementation can be found here.
There are no security considerations related directly to the implementation of this standard for the contract that manages ERC-1155.
amount is locked, specified amount can not be transferred from locked account.locked and caller is locker and approved both, caller can transfer the token.locked token with locker as in-accesible account or un-verified contract address can lead to permanent lock of the token.Copyright and related rights waived via CC0.