The Ethereum ecosystem continues to evolve with innovative standards that reshape how developers build and users interact with decentralized applications. Among the most discussed proposals in recent months are EIP-6969, ERC-721C, and ERC-6551—each introducing transformative functionality across smart contracts, NFTs, and user autonomy.
These standards aren’t just technical upgrades—they represent shifts in incentive models, ownership rights, and digital identity. Understanding them provides insight into where Ethereum is heading: toward a more sustainable, creator-friendly, and user-empowered future.
Let’s explore each of these standards in detail, their implications, and how they interconnect within the broader Web3 landscape.
What Is EIP-6969? Incentivizing Smart Contract Creators
EIP-6969 is an Ethereum Improvement Proposal introduced around May 8, aiming to introduce Contract Share Revenue (CSR)—a mechanism that allows smart contract creators to earn a portion of the gas fees generated when users interact with their deployed contracts.
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This concept builds upon EIP-1559, the landmark upgrade from August 2021 that reformed Ethereum’s fee market by burning part of transaction fees and improving predictability. Under EIP-1559, gas fees are split into:
- Base fee: Burned permanently, reducing ETH supply.
- Priority fee: Paid directly to validators (formerly miners).
- Max fee: The total a user is willing to pay.
However, EIP-1559 did not account for smart contract developers—the architects behind DeFi protocols, NFT mints, or L2 bridges—who contribute immense value but receive no direct compensation from usage.
EIP-6969 seeks to correct this imbalance by adding a developer revenue layer to the existing fee structure:
Gas Fee = Base Fee + Priority Fee + Burn + Developer Share
Why It Matters for L2 Ecosystems
The proposal’s authors, including @owocki, suggest implementing CSR primarily on Layer 2 (L2) networks, not Ethereum’s mainnet (L1). This preserves L1’s neutrality while enabling L2s to foster innovation through direct financial incentives.
Imagine launching a new DEX on an L2: every trade generates gas fees. With EIP-6969, a percentage could flow back to the protocol team, funding maintenance, upgrades, or community rewards—without relying solely on token emissions or external revenue.
Risks and Considerations
While promising, EIP-6969 raises concerns:
- Spam contracts: Developers might deploy low-quality or redundant contracts solely to collect fees.
- Resource congestion: Incentivized creation could lead to bloat if not governed properly.
- Security risks: Poorly audited contracts earning revenue could become targets.
Thus, governance frameworks and reputation-based filtering may be necessary to ensure quality and sustainability.
ERC-721C: Making NFT Royalties Enforceable on Chain
NFT creators have long struggled with inconsistent royalty payments. Marketplaces like OpenSea previously honored royalties voluntarily—but many newer platforms have moved toward optional or zero royalty models, undermining long-term creator income.
Enter ERC-721C, a proposed enhancement to the ERC-721 standard developed by Limit Break, a free-to-play Web3 gaming studio known for innovations like Dookey Dash.
ERC-721C aims to make royalties programmable and enforceable at the smart contract level, ensuring creators retain control regardless of where their NFTs are traded.
Key Features of ERC-721C
Unlike traditional NFTs where royalties are enforced off-chain by marketplaces, ERC-721C embeds royalty logic directly into the token contract. This enables:
- Shared Royalties: Split earnings between creators and early adopters or holders.
- Caster-Only Revenue: Allow only the minter (not original creator) to earn royalties—ideal for community-driven projects.
- Conditional Payments: Royalties apply only if resale price exceeds mint price, protecting both parties.
- Transferable Royalty Rights: Issue a separate NFT representing royalty income rights—e.g., sell future earnings without selling the original asset.
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Impact on the NFT Industry
ERC-721C shifts power back to creators:
- ✅ Greater Control: Design custom royalty models without relying on third-party platforms.
- ✅ Fairer Distribution: Reward contributors beyond just the initial artist.
- ✅ Reduced Platform Dependency: No need to trust marketplaces to honor payments—rules are baked into code.
Currently supported on Ethereum and Polygon (including testnets like Sepolia and Mumbai), ERC-721C is gaining traction among game studios and generative art projects seeking sustainable monetization.
ERC-6551: Turning NFTs Into Autonomous Accounts
One of the biggest limitations of standard ERC-721 NFTs is their passivity—they can be owned and transferred but cannot hold assets or interact independently with other contracts.
ERC-6551 changes this by enabling every NFT to function as its own smart contract wallet, capable of owning tokens, interacting with DeFi protocols, and evolving over time.
Co-authored by @BennyGiang of Dapper Labs (creators of CryptoKitties), ERC-6551 introduces the concept of Token-Bound Accounts (TBAs)—a system where each NFT is paired with a unique contract address derived from its ID and chain data.
How It Works
Using a permissionless registry and proxy contracts, ERC-6551 generates a dedicated wallet for each NFT instance. For example:
An NFT representing your in-game character can:
- Own weapons (as other NFTs)
- Hold in-game currency (ERC-20 tokens)
- Stake assets in yield farms
- Participate in governance votes
This transforms static collectibles into dynamic digital identities—avatars that accumulate history, wealth, and utility across platforms.
Use Cases Enabled by ERC-6551
- Gaming Avatars: Characters that level up, own loot, and retain progress across games.
- Social Profiles: Decentralized identities that follow you across dApps, storing credentials and reputation.
- Asset Bundles: A single NFT representing a portfolio of tokens and collectibles—easily tradable as one unit.
- On-chain Histories: Provenance tracking for art or rare items with verifiable ownership journeys.
While still early, projects like Galaxy, Tensor, and Biconomy are already experimenting with TBA implementations.
EIP vs. ERC: What’s the Difference?
It’s easy to confuse EIPs and ERCs—they’re both community-driven standards. But they serve different purposes:
| Concept | Scope | Example |
|---|---|---|
| EIP (Ethereum Improvement Proposal) | Protocol-level upgrades affecting consensus, VM rules, or network mechanics | EIP-1559 (fee burning), EIP-6969 (developer revenue) |
| ERC (Ethereum Request for Comments) | Application-level token standards defining interfaces | ERC-20 (fungible tokens), ERC-721 (NFTs), ERC-6551 (account abstraction) |
In short:
🔧 EIPs change how Ethereum works under the hood
🎨 ERCs define how apps and tokens behave on top of it
They’re complementary—not interchangeable—and both are essential for ecosystem growth.
Frequently Asked Questions (FAQ)
Q: Is EIP-6969 live on Ethereum mainnet?
A: As of now, EIP-6969 is still a proposal and has not been implemented on Ethereum’s mainnet. It's being discussed primarily for use on Layer 2 networks to avoid compromising L1 neutrality.
Q: Can I use ERC-721C today?
A: Yes. The standard is live on Ethereum and Polygon mainnets and testnets. Developers can integrate it using Limit Break’s open-source libraries.
Q: Does ERC-6551 require changes to existing NFTs?
A: No. ERC-6551 works retroactively—it can be applied to any existing ERC-721 NFT without modifying its original contract.
Q: Will EIP-6969 increase my gas costs?
A: Not necessarily. The developer share would come from the priority fee portion of gas, meaning users set the total cost. However, some dApps might adjust pricing to account for shared revenue.
Q: Are there security risks with Token-Bound Accounts?
A: While ERC-6551 itself is secure, individual TBAs could be vulnerable if private keys are mishandled or if malicious contracts are approved. Proper wallet hygiene remains crucial.
Q: How do these standards affect average crypto users?
A: Over time, you’ll see more self-custodial NFTs with built-in earnings (via royalties), smarter contracts that reward builders, and digital identities that move seamlessly across apps—making Web3 more intuitive and valuable.
Final Thoughts
EIP-6969, ERC-721C, and ERC-6551 represent three pillars of Ethereum’s next evolution:
- Incentive alignment for builders,
- Creator empowerment through enforceable royalties,
- And user sovereignty via autonomous NFT accounts.
Together, they lay the foundation for a richer, more sustainable decentralized ecosystem—one where innovation is rewarded, ownership is meaningful, and digital identity is truly portable.
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By understanding these standards now, you're not just keeping up—you're positioning yourself ahead of the curve in the rapidly advancing world of Web3.