Each ERC-721 token is associated with its own collection of properties and values. The uniqueness (=non-fungibility) increases the value of the ownership, especially in the case of highly sought-after tokens. The ERC-721 standard interface should be implemented by any smart contract that creates non-fungible tokens (NFTs). NFTs can interact with a variety of functions, including:

  • Identifying the owner address of an ERC-721 token

  • Transferring the ERC-721 token to another address

  • Approval (=authorisation) of an ERC-721 token. Each “third-party” address which wants to transfer the NFT out of the owner wallet must be authorised for a successful transfer

  • ERC-721 tokens can be exchanged for other tokens or ether in the same way that ERC-20 tokens can.

Automated market-making algorithms are not applicable since all ERC-721 tokens have unique properties.

Currently, the agreed method for trading them is to auction or exchange them on NFT-specific peer-to-peer marketplaces. The best known of these marketplaces is OpenSea.