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Crypto Terms:  Letter C
Jun 19, 2023 |
updated Apr 02, 2024

What is Composable Token?

Composable Token Meaning:
Composable Token - is an ERC-998 token.
2 minutes

Let's find out Composable Token meaning, definition in crypto, what is Composable Token, and all other detailed facts.

A composable token is a basic extension to any non-fungible token that adds the ability to own other fungible (ERC-721) or non-fungible (ERC-20) tokens.

The title of a composable token is the owner's name. The owner of a composable token is referred to as its root. A parent token has an address that is shared by all of the network's children.

There are two ways to generate a composable token:

  • Bottom-Up Composable - The bottom-up composable tokens in this case keep data about the parent tokens. Bottom-up composables can be attached to other ERC-721 tokens as child tokens.
  • Top-Down Composable - The composable token maintains data about its child tokens in this context. Any ERC-721 token may be converted into a composable token from the top down. Consider this technique to be a wrapper for ERC-721 tokens. Tokens may be stored and transferred in and out of it.

Because they are non-fungible, ERC-998 tokens are not so far-fetched from ERC-721 tokens. Nonetheless, ERC-998 tokens are regarded as "composable," referring to the fact that they let people manage assets into complicated structures and exchange them with single ownership.

Something that is composable implies that it can be combined with other items, pieces, or components. It is possible for a composable token to signify more than one digital asset.

To specify, a non-fungible compostable token is a collection of digital assets. The collection can have several different tokens:

  • ERC-20 tokens
  • NFTs
  • Crypto Derivatives

Connecting many elements might result in the creation of a single umbrella asset. In relation to that, the ERC-998 token enables dozens of new applications. This allows users to create trees of linked ERC-721 tokens and acquire or sell bundles of ERC-721 tokens in a single transaction.

A composable token is a digital asset that anybody could generate. It is a coin that is vulnerable to a third-party influence. 

In addition, a composable token is an Ethereum-based token's composable bearer. This is a cryptocurrency that allows people to swap it and lend it to anybody. It offers a minimal barrier to entry and endless possibilities.