Token Standards

1 Mar 2023

Token standards are an essential component of blockchain technology, enabling the creation and transfer of digital assets. Tokens are essentially units of value that can be traded and exchanged on blockchain networks. They can represent anything from cryptocurrencies to digital collectibles, and even real-world assets like property or stocks. Token standards, on the other hand, are sets of rules and guidelines that define the features and functionality of a particular type of token. This article provides an overview of the most popular token standards, including ERC-20, ERC-721, ERC-1155, and BEP-20.
ERC-20 Token Standard
ERC-20 is perhaps the most well-known and widely used token standard in the blockchain industry. ERC-20 stands for Ethereum Request for Comment, and it is a standard protocol for the creation and issuance of fungible tokens on the Ethereum blockchain. Fungible tokens are interchangeable units of value that have the same properties and characteristics.
ERC-20 tokens are based on the Ethereum blockchain and can be stored in Ethereum wallets, such as MyEtherWallet, MetaMask, or Ledger Nano S. These tokens can be used for a variety of purposes, including payment, fundraising, and reward programs. ERC-20 tokens are also the basis for most Initial Coin Offerings (ICOs) and Security Token Offerings (STOs).
ERC-20 tokens have several key features, including:

  1. Transferability: ERC-20 tokens can be transferred between accounts using the Ethereum network.
  2. Divisibility: ERC-20 tokens can be divided into smaller units, making them suitable for microtransactions.
  3. Interoperability: ERC-20 tokens can be traded on decentralized exchanges (DEXs) and other platforms that support ERC-20 tokens.
  4. Standardization: ERC-20 tokens adhere to a standard set of rules and guidelines, making them easy to create, manage, and integrate into other applications.

ERC-721 Token Standard
Unlike ERC-20 tokens, which are fungible, ERC-721 tokens are non-fungible tokens (NFTs). Non-fungible tokens represent unique assets that cannot be replicated or exchanged for other tokens on a one-to-one basis. These tokens are used to represent digital collectibles, such as artwork, music, and other unique items.
The ERC-721 standard was introduced in 2018, and it quickly gained popularity in the blockchain community. ERC-721 tokens have unique identifiers and metadata, making them ideal for representing one-of-a-kind assets. These tokens are also compatible with smart contracts, allowing for the creation of decentralized marketplaces for digital collectibles.
ERC-721 tokens have several key features, including:

  1. Immutability: ERC-721 tokens are stored on the Ethereum blockchain, making them immutable and tamper-proof.
  2. Non-fungibility: ERC-721 tokens represent unique assets that cannot be exchanged for other tokens on a one-to-one basis.
  3. Interoperability: ERC-721 tokens can be traded on decentralized marketplaces and other platforms that support ERC-721 tokens.
  4. Flexibility: ERC-721 tokens can be used to represent a wide range of unique assets, including artwork, music, and other collectibles.

ERC-1155 Token Standard
ERC-1155 is a hybrid token standard that combines the features of both ERC-20 and ERC-721 tokens. ERC-1155 tokens are designed to be highly flexible, allowing developers to create both fungible and non-fungible tokens on the same platform.
ERC-1155 tokens were introduced in 2018, and they quickly gained popularity due to their flexibility and scalability. These tokens are also highly efficient, as they can be batched together in a single transaction, reducing the cost of gas fees.

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A token standard is a set of rules and requirements that define the behavior of a token on a blockchain. These standards ensure that tokens are interoperable and can be easily exchanged or used within different applications and platforms. Token standards can be thought of as the blueprint or design of a token, outlining its attributes, functionalities, and behavior.
Up till today if someone asks me what the meaning of NFTs are I'll just laugh and define what they acronym stands for but in reality how can one explain to a layman what's NFT's truly are?
The ERC-721 token standard is used for creating non-fungible tokens (NFTs) on the Ethereum blockchain. NFTs are unique and indivisible digital assets that represent ownership or proof of authenticity of a particular asset or collectible. ERC-721 tokens are widely used in the creation of digital art, collectibles, and gaming items.
The ERC-20 token standard is the most widely used token standard on the Ethereum blockchain. It defines the requirements for creating fungible tokens, which are identical and interchangeable with each other. ERC-20 tokens are widely used in initial coin offerings (ICOs) and for creating utility tokens that can be traded on exchanges or used within decentralized applications (dApps).
In the world of blockchain and cryptocurrency, tokens are a crucial component of the ecosystem. They are digital representations of assets or utilities that can be traded and used within a decentralized network. Token standards define the rules and requirements for creating and managing tokens on a blockchain. In this article, we will explore the different types of token standards and their significance in the blockchain ecosystem.
Essential features like address retrieval and token balances are included in token standards like ERC-20 and BEP-20, which make it easier for smart contracts to keep track of tokens. For instance, a developer can trace token transfers and other data using the Contract Application Binary Interface (ABI) to inspect an ERC-20 token.
Good summary! Do you think you can also do one for solana? Given solana and eth r both the top 2 layer 1 choices