What is the purpose of token standards like ERC-721?

Token standards like ERC-721 serve the primary purpose of establishing rules for non-fungible tokens (NFTs). Unlike fungible tokens, where each unit is interchangeable with any other unit (like cryptocurrencies such as Bitcoin or Ethereum), non-fungible tokens are unique and cannot be exchanged on a one-to-one basis.

ERC-721 provides a framework that allows developers to create, manage, and trade NFTs on the Ethereum blockchain. This standard specifies how to manage information about the ownership and metadata of each unique token, ensuring that each NFT can be distinctly identified. The standard's rules include methods for transferring ownership, querying ownership details, and validating the uniqueness of each token, which are critical for the functionality of digital assets like art, collectibles, or exclusive content.

By following the ERC-721 standard, developers can ensure compatibility among various applications and marketplaces that deal with NFTs, fostering a cohesive ecosystem where collectible assets can be bought, sold, and traded efficiently. This standard has become foundational in the emerging landscape of digital ownership and blockchain-based art, contributing to the popularity of NFTs in various industries.