ERC-721 gave Ethereum's unique tokens one interface, so any NFT trades in any market

In late November 2017 the Vancouver design studio Axiom Zen released CryptoKitties, a game for collecting and breeding cartoon cats that lived on the Ethereum blockchain as unique tokens. Cats started selling for six figures and the game logged about $1.3 million in sales in its first days. It was also too popular to run: by December 6, 2017, CryptoKitties accounted for roughly 13.5 percent of the network's computing power, delaying unrelated transactions and even a token sale.

Every other Ethereum token followed ERC-20, which treats a balance as a single interchangeable number, so it cannot represent one-of-a-kind assets. Projects tracking distinguishable things — Decentraland's virtual land, CryptoPunks, game items — had each built their own incompatible scheme. In January 2018 Dieter Shirley of Axiom Zen joined William Entriken, Jacob Evans and Nastassia Sachs to propose ERC-721: one interface where every asset is a permanent uint256 ID, and the pair of contract address and token ID is globally unique.

The interface is deliberately small — check the owner of an ID, transfer it safely, approve an operator — so any wallet, marketplace or auction app that implements it once can handle every NFT ever minted. Adoption stopped being per-project work: a marketplace existed before the next token launched. The standard was finalized in 2018, and CryptoKitties was spun out as Dapper Labs with $12 million from Andreessen Horowitz and Union Square Ventures.

One shared interface makes every unique token tradable

Standard functions mean marketplaces and wallets already exist when the next token launches

The interface is tiny — owner, transfer, approve — so implementing it is cheap and auditing it is easy

With quantity none or one, the ERC-20 allowance race condition simply disappears

CryptoKitties' congestion made every Ethereum developer feel the need in the same week

When assets are unique, the scarce thing is interoperability. Publish one small interface and let other people's wallets and marketplaces carry your adoption for you.

The standard outlived the cats. NFTs spread to art, music, tickets and game items, and trading surged to roughly $18 billion of record sales in 2021 before collapsing — by August 2022 a median CryptoKitty sold for about 0.04 ether ($40–50), often less than the gas needed to move it. The design held either way: marketplaces and wallets still speak ERC-721, the semi-fungible ERC-1155 extended the same interface logic, and blockchain games moved to sidechains to escape Ethereum's congestion rather than abandon the token format.