In May, bound account tokens (TBAs), also known as NFTs, which function as crypto wallets, were introduced to the Ethereum market for the first time.

This type of non-fungible token, represented by the ERC-6551 token standard, which improves some aspects of the well-known ERC-721 standard, has been a huge success on Polygon for a few months now.

Let’s take a look at how these special NFTs work together and see some numbers on their growth.

All the details below.

What is ERC-6551: the token standard that is revolutionising the NFT and crypto wallet market?

ERC-6551 is a token standard that allows developers to improve the design of NFTs to the point where they take on the appearance of a crypto wallet.

In February 2023, the standard was publicly proposed to the Ethereum community via an ‘improvement proposal’ (EIP 6551), with the first experiments starting in May.

The aim was to overcome certain limitations of ERC-721 and make the market for non-fungible tokens more dynamic and interactive.

As mentioned above, the main feature of this category of tokens is that they act as real cryptocurrency wallets, capable of holding assets.

This is the first case in crypto history where a token contains other tokens inside it.

This feature was described by Benny Giang, co-author of the proposal that revealed ERC-6551, as “token bound accounts” (TBAs).

Another very interesting property of this innovative class of NFTs is that they can sign cryptographic messages and verify signatures, interacting directly with the smart contracts of decentralised applications.

In this way, the social governance property of NFTs is introduced, allowing the implementation of dynamic personalities and characteristics on these tokens, which are no longer bound to simple collectible JPGs.

The new applications and use cases that could emerge from this innovation in the future are endless, especially in the gaming context where AI could revolutionise an entire sector.

With ERC-6551 and its bound account tokens, web3 game developers can introduce new use cases such as inventories, equipment and other mechanisms that require more resources to interact with each other. 

For the development of the Ethereum ecosystem, this is an important milestone to experiment with more and more new ways of social interaction in the blockchain world.

Describing the potential of his invention, Benny Giang said:

“Now that an NFT has its own account address, it could be a signatory on a multisig, it could have its own ENS subdomain. It’s like giving an NFT a passport”

On a more technical level, the ERC-6551 uses an ERC-721 NFT-compatible unlicensed registry that acts as a directory for TBAs. The registry distributes a proxy contract for TBAs by inheriting the metadata of the original ERC-721 token.

The assets contained therein as NFTs or fungible tokens can be transferred to other TBAs via a function on the proxy contract.

The growth of token bound accounts on Polygon in recent months

In recent months, more specifically since July, the trend of NFTs acting as crypto wallets, also known as ‘token bound accounts’, has landed on Polygon’s blockchain in significant numbers.

According to data from Dune Analytics, 18,116 ERC-6551 accounts have been activated to date, with 7,581 NFTs being held within so-called TBAs.

The real boom of this innovation on Polygon took place between the end of August and September, when the statistics skyrocketed.

In the last week of September alone, more than 8,900 ERC-6551 accounts were activated.

The NFT collections on Polygon that use this standard the most and implement the crypto wallet feature are Dippi TBA, Lens Protocol Profiles and OrbSoulbound.

Together, these three collections manage 77% of all accounts created, leaving little room for competition.

If we take the general market, where the Ethereum network is also present, as a reference, we can see from the data a discontinuous but overall growing activity from May until today.

In total, 26,334 token-bound accounts were activated across all EVM chains, through 1,520 transactions, with 11,270 NFTs held within them.

In the wake of Polygon’s success, it is confirmed that the highest number of TBA activations was recorded at the end of September, with more than a third of accounts created between 25 September and 1 October.

In terms of pure transactions, we can see that there was a drop in activity from mid-July to mid-August, with the metrics starting to pick up from 21 August, with 119 transactions recorded in the first week.

Given the potential that the ERC-6551 standard has brought to the market, we believe that more and more TBA accounts will be created in the coming months to provide users and developers with a dynamic crypto wallet for NFTs and other crypto assets.

Most likely, this trend will expand and become mainstream as web3 game producers begin to implement TBAs within their virtual experiences, creating new ways to experience sociality in the context of blockchain.

Another interesting crypto news concerning Google: after Google Cloud’s Bitcoin support, now comes the acceptance of NFTs in wallets on Google Play. 

The news was published on the official blog of Android developers, with an article titled “Enabling New Blockchain-Based Experiences on Google Play.” 

Google Play and NFTs supported in wallets

Google Play is Google’s platform through which Android apps are distributed. 

Just as on the Apple Store, it has policies that until recently effectively prevented app developers from integrating crypto services outside of those provided by industry players, such as exchanges. 

However, with yesterday’s article, Google Play declares that these limitations have been partly revised and removed. 

In fact, they officially announce that they are updating their rules to open up new ways to transact blockchain-based digital content within apps and games. 

They give the explicit example of user loyalty through NFT rewards, saying they are enthusiastic about seeing creative in-app experiences flourish so much that they want to help developers expand their businesses with these new technologies.

They also point out that Google Play already hosts a variety of blockchain-related apps, but they also know that their partners are looking forward to being able to expand these offerings to create more engaging digital experiences through tokenized digital assets such as NFTs. 

They state: 

“Like with any emerging technology, we must balance innovation with our responsibility to protect users. So, we’ve spoken with developers about responsibly supporting those opportunities while continuing to provide a safe, transparent, and trusted experience for everyone.”

The change in attitude

This is for all intents and purposes a shift in attitude, from extremely cautious to cautious. It may not sound like much, but it could mark a momentous shift, especially if it is followed by real integrations of digital assets within widely used apps.

For example, apps, and especially games, will be allowed to sell or allow users to earn tokenized digital assets, as long as the developers state this blatantly and explicitly. 

This very opening could constitute a small revolution of sorts, because NFTs are perfect for integration within online digital games as exchangeable collectibles or as rewards for players. 

What’s more, they say in the official statement that they are also talking with industry partners to further improve support for blockchain-based apps, including in areas such as secondary marketplaces. 

The possible integrations

All of this suggests that the current opening is just the beginning of a series of possible openings that could eventually lead to cryptocurrency integration into apps such as Google Pay. 

For example, the statement quotes the verbatim words of Reddit’s Senior Engineering Manager, Matt Williamson, who says that Reddit believes in a responsible approach to blockchain-based digital content, such as collectible avatars. 

Indeed, Reddit is one of the partners that has been working with Google regarding such a Google Play policy update, and has recently enjoyed tremendous success with its own NFT Avatars. 

In particular, the greatest potential that seems to be emerging for these kinds of integrations is that related to so-called Play-to-Earn, or the possibility of offering game users the ability to earn money by playing games. 

In theory this is virtually enormous potential, not least because the digital games market is already a huge one. 

However, it should not stop there. Indeed, in addition to the integrations that are made possible by this policy change, there may also be other policy changes in the future that could encourage further integrations. 

Since the barrier that prevented crypto tools from being used to make money for app users seems to have fallen, the shift from NFTs to fungible tokens does not seem all that large. Moreover, crypto exchange apps are already in existence, including those of non-custodial crypto wallets. 

Everything seems ready for the integration of crypto wallets within more or less any app, or at any rate to make crypto wallets and apps of any kind interoperable with each other. 

At this point, crypto transactions between apps could even become dominant in the future, compared to fiat currency transactions, because they are much less technically problematic and also allow micropayments. 

The way seems to have been paved. All that remains now is to see who will embark on it.

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