Universal Composability Standards like ERC-1155 and ERC-6551 excel at creating a permissionless, interconnected asset ecosystem. Their strength lies in enabling assets to be freely traded, used as collateral, or integrated across thousands of dApps and marketplaces like OpenSea and Blur. For example, the ERC-1155 standard underpins over $2.5B in NFT trading volume, demonstrating its massive network effect and developer adoption. This open approach maximizes liquidity and long-term utility but can introduce complexity and higher gas costs for simple in-game actions.
LABS
Comparisons
Asset Interoperability: Universal Composability Standards vs Proprietary Standards
A technical analysis for CTOs and protocol architects comparing open standards like ERC-6551 and ERC-1155 against closed, proprietary systems for managing and monetizing user-generated content assets in gaming ecosystems.
Chainscore © 2026
introduction
THE ANALYSIS
Introduction: The Battle for Asset Sovereignty in Gaming
A technical breakdown of the strategic choice between open, interoperable standards and closed, optimized systems for in-game assets.
Proprietary Standards take a different approach by building optimized, closed-loop systems. This strategy, used by games like Axie Infinity on Ronin or Illuvium on ImmutableX, results in superior user experience with near-zero transaction fees and high throughput (Ronin handles ~1M daily transactions). The trade-off is walled-garden liquidity; assets are sovereign within the game's universe but cannot natively interact with the broader DeFi or NFT ecosystem without bridges or custodial wrapping, which adds friction and risk.
The key trade-off: If your priority is maximizing asset liquidity, composability, and long-tail innovation across the wider Web3 stack, choose a Universal Standard. If you prioritize scalability, cost control, and crafting a seamless, curated in-game economy above all else, a Proprietary Standard is the decisive choice. The former bets on the network; the latter bets on the product.
tldr-summary
Universal Composability vs. Proprietary Standards
TL;DR: Key Differentiators at a Glance
A direct comparison of the two dominant approaches to asset interoperability, highlighting their core strengths and ideal applications.
01
Universal Composability (e.g., IBC, LayerZero)
Cross-chain sovereignty: Assets retain native security and governance (e.g., ATOM moving via IBC). This matters for protocols that cannot accept custodial risk or want to participate in on-chain governance across chains.
02
Proprietary Standards (e.g., Wormhole, Axelar)
Hub-and-spoke efficiency: A single, audited set of smart contracts and relayers secures all transfers. This matters for developers who need to connect to 30+ chains quickly without managing individual connections.
03
Universal Composability (e.g., IBC, LayerZero)
Native DeFi integration: Composability is built-in; assets are treated as first-class citizens (e.g., Osmosis pools with IBC assets). This matters for building complex, multi-chain applications where asset fungibility is critical.
04
Proprietary Standards (e.g., Wormhole, Axelar)
EVM & non-EVM agnosticism: Bridges ecosystems with fundamentally different VMs (e.g., Solana <-> Ethereum <-> Sui). This matters for projects targeting maximum user reach across all major blockchain architectures.
05
Universal Composability (e.g., IBC, LayerZero)
Long-term cost predictability: No intermediary token fees; costs are primarily gas. This matters for high-frequency trading or micro-transactions where variable bridge fees destroy margins.
06
Proprietary Standards (e.g., Wormhole, Axelar)
Rapid time-to-market: Use a unified SDK and gateway API instead of building per-chain light clients. This matters for startups and enterprises that need a production-ready interoperability solution in weeks, not quarters.
ASSET INTEROPERABILITY: UNIVERSAL COMPOSABILITY VS. PROPRIETARY STANDARDS
Feature Comparison: Universal Standards vs Proprietary Systems
Direct comparison of key technical and ecosystem metrics for interoperability approaches.
| Metric | Universal Standards (e.g., ERC-20, ERC-721) | Proprietary Systems (e.g., SPL, Move) |
|---|---|---|
Ecosystem Composability | ||
Cross-Chain Portability | ||
Deployment Overhead | Single Standard | Per-Chain Implementation |
Developer Adoption | 1M+ Contracts (Ethereum) | 10K+ Contracts (Solana) |
Standard Governance | Community-Driven (EIP) | Foundation/Corporate-Driven |
Native Multi-Chain Tooling | Wormhole, LayerZero, Axelar | Native Bridge Only |
Audit & Security Maturity | High (10+ years) | Medium (3-5 years) |
pros-cons-a
Asset Interoperability
Universal Composability Standards: Pros and Cons
Choosing between open standards like IBC and proprietary bridges is a foundational architectural decision. This comparison highlights the key trade-offs in security, ecosystem access, and control.
02
Universal Standard: Security Model
Leverages chain-native validation: Security is derived from the connected chains' validators, not a third-party federation. This eliminates single points of failure and reduces systemic risk. This matters for high-value, institutional-grade transfers where counterparty risk is unacceptable.
04
Proprietary Standard: Feature Control
Enables custom logic and monetization: Proprietary standards allow bridge operators to implement custom fees, governance, and features (e.g., arbitrary message passing). This matters for commercial entities that need to control the roadmap, capture value, and offer services beyond simple asset transfers.
05
Universal Standard: Long-Term Cost
Lower ongoing operational expense: Once IBC is implemented, the cost of adding new connections is marginal, and there are no recurring bridge operator fees. This matters for budget-conscious protocols scaling across many chains, where per-transaction fees from proprietary bridges become significant.
pros-cons-b
Asset Interoperability
Proprietary Asset Systems: Pros and Cons
Choosing between universal standards (ERC-20, ERC-721) and proprietary systems (Solana SPL, Cosmos IBC) defines your protocol's reach and technical debt. Key trade-offs in composability, control, and ecosystem lock-in.
01
Universal Standards (ERC-20/ERC-721)
Maximized Composability: Native integration with a $50B+ DeFi ecosystem (Uniswap, Aave, MakerDAO). This matters for protocols requiring instant liquidity and integration with established money legos.
Developer Velocity: Access to 4,000+ active Ethereum devs and battle-tested tooling (OpenZeppelin, Hardhat). This matters for teams prioritizing rapid iteration and security audits.
$50B+
DeFi TVL
4,000+
Active Devs
02
Universal Standards (ERC-20/ERC-721)
Fragmented Liquidity: Assets are siloed to their native chain (e.g., ETH vs. Polygon). This matters for applications needing unified user balances across L2s, requiring complex bridging solutions.
Congestion & Cost Risk: Subject to base layer gas volatility (>$100+ during peaks). This matters for high-frequency or micro-transaction use cases where predictable cost is critical.
$100+
Peak TX Cost
03
Proprietary Standards (SPL, IBC)
Optimized Performance: Native standards built for chain-specific VMs (e.g., Solana's SPL for Sealevel). This matters for high-throughput applications (>2,000 TPS) like real-time gaming or order books.
Sovereign Control: Full authority over upgrade paths and fee mechanics. This matters for foundational layer-1 protocols (e.g., Cosmos zones) that cannot rely on external governance.
>2,000
Peak TPS
04
Proprietary Standards (SPL, IBC)
Ecosystem Lock-in: Assets lack native compatibility with the larger EVM ecosystem. This matters for projects seeking multi-chain users, requiring custom, audited wrappers (e.g., Wormhole).
Reduced Tooling Maturity: Smaller, chain-specific dev tool ecosystem versus Ethereum's. This matters for teams that cannot afford to build core infrastructure from scratch.
CHOOSE YOUR PRIORITY
Decision Framework: When to Choose Which Standard
Universal Composability Standards (e.g., ERC-20, ERC-4626) for DeFi
Verdict: The default choice for composability and security. Strengths: Deep liquidity and integration across the Ethereum ecosystem (Uniswap, Aave, Compound). Battle-tested security with formal verification tools like Certora and Slither. Enables seamless money legos via standardized interfaces. Trade-offs: Higher gas costs on Ethereum L1. Slower innovation cycles due to community-driven EIP processes.
Proprietary Standards (e.g., SPL, Seaport) for DeFi
Verdict: Choose for performance-centric, application-specific logic. Strengths: Optimized for low-latency, high-throughput environments like Solana (Serum DEX) or app-specific rollups. Enables novel features not possible with generic standards (e.g., native cross-margin). Trade-offs: Creates walled gardens; limits integration with the broader DeFi ecosystem. Higher protocol-specific development and audit burden.
ASSET INTEROPERABILITY
Technical Deep Dive: Implementation and Composability
Choosing between universal and proprietary standards is a foundational architectural decision. This section compares the technical trade-offs in composability, development effort, and ecosystem reach.
The core difference is ecosystem portability versus chain-specific optimization. ERC-20 is a universal, open standard on Ethereum and EVM-compatible chains (Arbitrum, Polygon, Base), enabling seamless wallet and DApp integration. Proprietary standards (e.g., Solana's SPL, Cosmos SDK's bank module) are built for a specific chain's architecture, offering native performance and features like parallel execution or custom governance hooks, but require bridges and wrappers for cross-chain use.
verdict
THE ANALYSIS
Verdict: Strategic Recommendations for Builders
Choosing between universal and proprietary standards is a foundational decision that shapes your protocol's growth trajectory and technical debt.
Universal Composability Standards (e.g., ERC-20, ERC-721, IBC) excel at network effects and developer accessibility. By leveraging widely adopted specifications, you gain instant interoperability with a massive existing ecosystem. For example, deploying an ERC-20 token immediately makes it compatible with over $50B in DeFi TVL across thousands of dApps like Uniswap and Aave, drastically reducing integration friction and user acquisition costs.
Proprietary Standards (e.g., Solana's SPL, Cosmos SDK modules, Avalanche's custom VMs) take a different approach by optimizing for performance and specific use cases. This results in superior technical characteristics—like Solana's SPL token program enabling sub-$0.001 transfers at 3k+ TPS—but creates a walled garden. The trade-off is sacrificing broad, permissionless composability for a tightly integrated, high-performance environment tailored to your chain's architecture.
The key trade-off: If your priority is maximizing reach, liquidity access, and developer mindshare with a focus on Ethereum or multi-chain EVM ecosystems, choose Universal Standards. If you prioritize peak performance, unique functionality, and deep control over the asset lifecycle within a specific high-throughput environment, choose Proprietary Standards. Your choice ultimately dictates whether you build for the existing financial landscape or architect a new, optimized one.
ENQUIRY
Get In Touch
today.
Our experts will offer a free quote and a 30min call to discuss your project.
NDA Protected
Confidentiality24h Response
Time to ValueDirectly to Engineering Team
No Sales Fluff10+
Protocols Shipped
$20M+
TVL Overall