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Glossary

ERC-948

November 21, 2023 - Around 3 mins mins to read

ERC-948 is an Ethereum token protocol that is specifically designed for subscription-based transactions. In the world of blockchain technology, where decentralization and transparency are key, ERC-948 aims to facilitate the integration of these principles into subscription models and enable businesses to leverage the power of blockchain in their operations.

As the adoption of blockchain technology increases, there is a growing demand for a protocol that supports subscription models. ERC-948 fills this gap by providing developers with a standardized framework to build reliable platforms for businesses, ultimately bridging the gap between the traditional subscription economy and the decentralized world of blockchain.

While there are already several Ethereum-based token and digital asset standards available, ERC-948 stands out by introducing the concept of an opt-out feature. This unique feature allows users to withdraw tokens from a subscription-based system by ratifying a smart contract, offering more flexibility and control over their subscriptions.

To understand how the opt-out protocol in ERC-948 operates, let’s break it down:

Economically, the opt-out strategy aligns the incentives of customers and suppliers. The protocol works as follows:

  • The user gives permission for a specific firm to deduct a certain number of tokens from their wallet at regular intervals.
  • The user has the option to withdraw this permission at any time, giving them the power to opt out of the subscription.
  • At each interval, the firm can deduct the specified number of tokens from the user’s wallet, provided that the tokens are available and the user’s consent is active.

By leveraging the power of smart contracts on the Ethereum blockchain, an opt-out smart contract for a subscription service based on ERC-948 would function as follows:

  • The subscription service implements a smart contract that enables users to withdraw tokens.
  • The user approves the contract for an infinite allowance and an unlimited duration, providing the service with the necessary permissions to deduct tokens from their wallet.
  • The user invokes the createSubscription() method of the contract, allowing the service to deduct a certain number of tokens from their wallet at regular intervals based on the subscription terms.
  • The service executes the withdrawSubscription() function at each interval, using the transferFrom() method to collect the approved tokens from the user’s wallet, subject to the availability of funds and the user’s consent.

Despite the challenges that come with implementing such a protocol, ERC-948 offers a highly attractive and profitable environment for subscription service providers. The adaptability of blockchain technology ensures that solutions can be found for any obstacles that may arise.

If a standardized approach to subscriptions is established through ERC-948, it could attract even more consumer-facing enterprises to adopt blockchain technology. While the blockchain industry often focuses on new innovations and dismisses traditional incentive structures, it is crucial to recognize the effectiveness of existing models, especially in the subscription economy.

Author

Coincu

Glossary

ERC-948

ERC-948 is an Ethereum token protocol that is specifically designed for subscription-based transactions. In the world of blockchain technology, where decentralization and transparency are key, ERC-948 aims to facilitate the integration of these principles into subscription models and enable businesses to leverage the power of blockchain in their operations.

As the adoption of blockchain technology increases, there is a growing demand for a protocol that supports subscription models. ERC-948 fills this gap by providing developers with a standardized framework to build reliable platforms for businesses, ultimately bridging the gap between the traditional subscription economy and the decentralized world of blockchain.

While there are already several Ethereum-based token and digital asset standards available, ERC-948 stands out by introducing the concept of an opt-out feature. This unique feature allows users to withdraw tokens from a subscription-based system by ratifying a smart contract, offering more flexibility and control over their subscriptions.

To understand how the opt-out protocol in ERC-948 operates, let’s break it down:

Economically, the opt-out strategy aligns the incentives of customers and suppliers. The protocol works as follows:

  • The user gives permission for a specific firm to deduct a certain number of tokens from their wallet at regular intervals.
  • The user has the option to withdraw this permission at any time, giving them the power to opt out of the subscription.
  • At each interval, the firm can deduct the specified number of tokens from the user’s wallet, provided that the tokens are available and the user’s consent is active.

By leveraging the power of smart contracts on the Ethereum blockchain, an opt-out smart contract for a subscription service based on ERC-948 would function as follows:

  • The subscription service implements a smart contract that enables users to withdraw tokens.
  • The user approves the contract for an infinite allowance and an unlimited duration, providing the service with the necessary permissions to deduct tokens from their wallet.
  • The user invokes the createSubscription() method of the contract, allowing the service to deduct a certain number of tokens from their wallet at regular intervals based on the subscription terms.
  • The service executes the withdrawSubscription() function at each interval, using the transferFrom() method to collect the approved tokens from the user’s wallet, subject to the availability of funds and the user’s consent.

Despite the challenges that come with implementing such a protocol, ERC-948 offers a highly attractive and profitable environment for subscription service providers. The adaptability of blockchain technology ensures that solutions can be found for any obstacles that may arise.

If a standardized approach to subscriptions is established through ERC-948, it could attract even more consumer-facing enterprises to adopt blockchain technology. While the blockchain industry often focuses on new innovations and dismisses traditional incentive structures, it is crucial to recognize the effectiveness of existing models, especially in the subscription economy.

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