Unveiled in May 2022, the novel Ethereum (ETH) proposal is set to enable the creation of a completely new type of tokens with previously unseen functionalities. Familiar assets on Ethereum (ETH) and other EVM blockchains will be upgraded to small decentralized applications.
Bringing executable scripts to Ethereum (ETH) tokens: What is ERC-5169?
The ERC-5169 proposal is set to introduce a new function called scriptURI() to help locate executable scripts linked to tokens. As such, cryptocurrency tokens will be able to have advanced functionality thanks to third-party scripts from their issuers. Web3 researcher and educationist Stacy Muur shared a breakdown of the novel concept on her X.
Understanding #ERC5169: A Simple Breakdown for Non-Techies
TL;DR: @ERC5169 is a proposal for a new kind of contract interface on Ethereum.
This interface adds a new function called scriptURI() to help locate executable scripts linked to tokens.
Why should we care?
Imagine… pic.twitter.com/zLoAiUtEpJ— Stacy Muur (@stacy_muur) October 6, 2023
The new proposal is based on Uniform Resource Identifier or URI. When creating cryptocurrency tokens, their issuers will be able to link specific code logic to them. Once the token is created and pegged to a script, token holders will be able to access and use the linked script by calling the scriptURI function.
During this process, scripts can be located in various storages, both centralized and decentralized to ensure maximum flexibility and composability in DeFi:
It could be on decentralized platforms like IPFS, on GitHub, or even regular cloud storage. The point is to give flexibility while ensuring authenticity
Once this standard is approved and implemented, it will pave the way for many use cases. First, users will be able to run mini applications using nothing but a single token and an associated script.
Also, developers can use this concept to create browser add-ons or automated security instructions, the researcher added.
New token experiences for Ethereum (ETH) ecosystem
The experience of using token-script designs with URI can be compared to the usage of “smart keys” while opening doors:
Think of an office door that only opens for employees with a special token. Once an employee gets the token, they instantly know how to open the door because the instructions (script) are linked right in the token
However, a number of security challenges come with the introduction of ERC-5169 tokens. All involved parties should be sure that only the issuer can control the script pegged to this or that token.
It should be accomplished via using “permanent” storage for scripts or by protecting it via some multi-signature mechanisms, the researcher concluded.