The Ethereum ecosystem continues to evolve at a rapid pace, driven by innovative proposals and token standards that expand functionality, empower creators, and redefine digital ownership. Among the most discussed developments in recent months are EIP-6969, ERC-721C, and ERC-6551—three distinct yet transformative protocols shaping the future of decentralized applications, NFTs, and smart contract interactions.
These standards address critical gaps in the current blockchain landscape: from incentivizing developers through gas fee sharing to enforcing NFT royalties on-chain and turning NFTs into fully functional digital identities with wallet capabilities. Understanding them is essential for developers, creators, and users navigating Web3’s next phase.
This article breaks down each standard in clear, accessible terms, compares their purposes, and explores how they collectively push Ethereum toward greater utility and user empowerment.
What Is EIP-6969? Rewarding Smart Contract Creators
EIP-6969, introduced around May 2024, proposes a novel mechanism called Contractor Share of Revenue (CSR)—a system that allows smart contract creators to earn a portion of the gas fees generated when users interact with their contracts.
👉 Discover how developer incentives are reshaping Ethereum's future
At its core, EIP-6969 builds upon EIP-1559, the landmark upgrade implemented during Ethereum’s London hard fork in August 2021. EIP-1559 restructured transaction pricing into three components:
- Base Fee: Burned (permanently removed from circulation)
- Priority Fee: Paid directly to validators (formerly miners)
- Max Fee: The upper limit set by users
While EIP-1559 improved fee predictability and reduced network congestion, it did nothing to reward the actual builders—smart contract developers—who create the applications driving gas usage. EIP-6969 aims to fix this imbalance.
Under the new model, a small percentage of each transaction's gas fee could be redirected to the original contract creator. This introduces a sustainable revenue stream for developers, especially valuable within Layer 2 (L2) ecosystems where innovation thrives but monetization remains challenging.
Notably, proponents like co-author @owocki suggest limiting CSR implementation to L2 networks to preserve the neutrality and simplicity of Ethereum’s Layer 1. Deploying such a mechanism on L1 could incentivize spammy or low-quality contracts, risking network bloat.
Potential benefits include:
- Long-term developer sustainability
- Stronger alignment between creators and users
- Accelerated innovation in DeFi, gaming, and social apps
However, risks remain—particularly around potential abuse through contract farming or excessive deployment of trivial logic solely to collect fees. Careful design and governance will be key to ensuring fairness and security.
ERC-721C: Enabling On-Chain NFT Royalties
Unlike EIPs, which modify protocol-level rules, ERCs (Ethereum Request for Comments) define application-level standards—most famously, ERC-721, the foundation of non-fungible tokens (NFTs).
Enter ERC-721C, an extension developed by Limit Break, a free-to-play Web3 gaming studio known for projects like Dawn of the Infinite. This standard addresses one of NFTs’ biggest pain points: the lack of enforceable royalties.
Currently, NFT royalties are not enforced on-chain. Marketplaces like OpenSea choose whether to honor them—and increasingly, many don’t. ERC-721C changes that by embedding royalty logic directly into the smart contract itself.
Key Features of ERC-721C
- Programmable Royalty Distribution: Creators can define custom rules for who receives royalties—themselves, early adopters, or even community members.
- Conditional Payments: Royalties may only apply if certain conditions are met (e.g., resale price exceeds mint price).
- Transferable Royalty Rights: A creator can issue a separate NFT that grants ownership of royalty income—effectively tokenizing revenue streams.
- Decentralized Control: Removes reliance on centralized marketplaces to enforce payments.
For example, an artist could configure their collection so that:
- 50% of secondary sales go to them,
- 30% reward early supporters holding specific tokens,
- 20% fund a community treasury.
This level of flexibility empowers creators while fostering more equitable ecosystems. It also reduces dependency on platforms that might unilaterally change royalty policies.
ERC-721C is already live on Ethereum and Polygon, including testnets like Sepolia and Mumbai, making it accessible for immediate adoption.
👉 Explore how NFT creators are reclaiming control over royalties
ERC-6551: Turning NFTs Into Smart Wallets
If ERC-721C enhances creator economics, ERC-6551 revolutionizes NFT utility. Co-authored by Benny Giang from Dapper Labs (creators of CryptoKitties), this standard transforms NFTs into autonomous agents capable of owning assets and interacting with other protocols.
Traditionally, an NFT can only be transferred or owned—it cannot hold tokens, sign transactions, or engage with DeFi platforms. ERC-6551 changes this by introducing Token-Bound Accounts (TBAs).
Each ERC-6551-compliant NFT is paired with a unique smart contract wallet. This wallet is:
- Automatically generated based on the NFT’s chain ID, contract address, and token ID
- Fully owned by the NFT—meaning whoever holds the NFT controls the associated account
- Capable of holding ERC-20 tokens, other NFTs, and interacting with dApps
Imagine your character in a game (an NFT) earning loot (tokens), staking assets in a yield farm, or voting in a DAO—all without needing a separate wallet. That’s the power of ERC-6551.
Use Cases Enabled by ERC-6551
- Gaming Avatars as Persistent Identities: Characters accumulate gear, currency, and achievements across games.
- Soulbound Credentials: Verifiable identities or licenses tied to a non-transferable NFT.
- Autonomous Agents: NFTs executing strategies in DeFi or responding to on-chain events.
- Digital Legacy: Pass down entire digital profiles—including assets and history—via inheritance.
By turning NFTs into full-fledged accounts, ERC-6551 blurs the line between identity and wallet—ushering in a new era of composable digital existence.
EIP vs. ERC: What’s the Difference?
It’s easy to confuse EIPs and ERCs since both involve Ethereum proposals. Here’s a clear breakdown:
| Aspect | EIP (Ethereum Improvement Proposal) | ERC (Ethereum Request for Comments) |
|---|---|---|
| Scope | Protocol-level upgrades (e.g., consensus, VM changes) | Application/interface standards (e.g., token behavior) |
| Impact | Changes how Ethereum functions globally | Defines how contracts interact locally |
| Example | EIP-1559 (fee market reform), EIP-6969 (developer revenue) | ERC-20 (fungible tokens), ERC-721 (NFTs), ERC-721C |
| Adoption | Requires network-wide consensus | Adopted voluntarily by developers |
In short: EIPs shape the foundation; ERCs build on top.
Frequently Asked Questions (FAQ)
Q: Can EIP-6969 be implemented on Ethereum mainnet?
A: While technically possible, most advocates recommend deploying it only on Layer 2 solutions to avoid compromising L1 neutrality and risking spam attacks.
Q: Do all marketplaces support ERC-721C royalties?
A: Not yet—but because the logic is enforced at the contract level, compliant platforms must respect the rules. Non-compliant ones may lose access to popular collections.
Q: Does ERC-6551 require changes to existing NFTs?
A: No. Any existing ERC-721 NFT can gain TBA functionality via off-chain registration—no migration needed.
Q: Are there security concerns with ERC-6551?
A: Yes. Since TBAs hold value, they become targets for exploits. Proper auditing and secure key management are crucial.
Q: How do these standards affect everyday users?
A: They enable richer experiences—fairer creator payouts, self-custodial digital identities, and smarter assets that work across apps.
Q: Will these standards work together?
A: Absolutely. Imagine an ERC-721C NFT with enforced royalties, powered by EIP-6969 incentives for its developer, and upgraded via ERC-6551 to own in-game items—all interoperable across chains.
👉 See how next-gen Ethereum standards are unlocking new possibilities
These emerging protocols represent more than incremental upgrades—they signal a shift toward a more sustainable, user-centric Web3. Whether you're building dApps, creating digital art, or exploring decentralized identity, understanding EIP-6969, ERC-721C, and ERC-6551 is key to staying ahead in the evolving blockchain landscape.