ERC-948 is an Ethereum token protocol tailored for subscription-based transactions, designed to integrate blockchain technology into recurring payment models. It enables businesses to leverage blockchain for subscriptions, enhancing security and transparency. The key feature of ERC-948 is its opt-out mechanism, which empowers users with control over their subscriptions.
In practice, ERC-948 works by allowing users to authorize a predetermined amount of tokens (“x”) to be deducted from their wallet by a service provider (“z”) at regular intervals (“y”). Users maintain the flexibility to revoke this permission anytime. The protocol functions through smart contracts on the Ethereum blockchain, where users approve the contract for an infinite allowance over an unlimited period.
The process involves the user initiating a createSubscription() method in the contract, permitting the service (“z”) to withdraw “x” tokens from their wallet every “y” time period. The service executes withdrawSubscription() at each interval, collecting “x” tokens via transferFrom(), contingent on the availability of funds and the user’s ongoing consent.
ERC-948 addresses the need for a standardized approach to blockchain-based subscriptions, presenting an appealing framework for developers and businesses. It not only simplifies the establishment of subscription services on blockchain but also presents a promising avenue for consumer-facing enterprises to adopt blockchain technology. Despite potential challenges, the adaptability and security offered by ERC-948 make it a significant development in the realm of blockchain and subscription economies.