The cryptocurrency industry continues to grow at an exponential rate, with hundreds of new tokens created every day. However, not all tokens are created equal. Some tokens are interchangeable while others are unique to a particular platform. In this blog post, we’ll take a look at three of the most common token standards ERC20, ERC721, and ERC1155.

What is ERC for Ethereum?

Ethereum Request for Comments (ERC) are technical documents that define the methods, behaviors, and innovation for the Ethereum blockchain.

The purpose of ERCs is to provide a common language for Ethereum developers to communicate and collaborate, and to provide guidance on how the Ethereum network should evolve over time.

This is done through the format of a request for comment (RFC), which is a technical document that is submitted to the Ethereum community for review and comment.

The document outlines a proposed standard, process, or behavior for the Ethereum network, and is then discussed and voted on by the community.

ERC documents are divided into 3 main categories & others as follows,

1) Standards :- Standards are the primary documents that are used to define the behavior and protocol of the Ethereum network.

2) Requests for Comments :- These are the documents that propose changes to the protocol or behavior of Ethereum, and can include new ideas or updates to existing standards and processes.

3) Improvement Proposals :- Improvement Proposals are documents that outline proposed changes to the Ethereum protocol, while Other is a catch-all category that includes documents that do not fit into the other categories.

The ERC documents are reviewed and voted on by the Ethereum community, and ultimately, the documents accepted by the community become the standard for the Ethereum network. The acceptance of ERCs is an important part of the development process for the Ethereum network, and these documents are the foundation of the Ethereum community.

What are ERC Token Standards?

ERC token standards are a set of rules and guidelines for developers to follow when creating a crypto token on the Ethereum blockchain.

They define the token’s functionality, size, and utility, as well as its interaction with other tokens and the Ethereum network. These standards also ensure that the tokens created are compatible with different wallets, exchanges, and other platforms.

The ERC-20 token standard is the most widely used token standard on the Ethereum blockchain and is the basis for the majority of tokens created on the Ethereum blockchain today. This standard defines a set of rules that tokens must follow in order to interact and be compatible with other tokens and Ethereum network. To create a token that is ERC-20 compliant, developers must follow the rules and guidelines outlined in the ERC-20 standard.

There are also other token standards such as ERC-721, ERC-223, and ERC-777, each of which provide different features and capabilities.

ERC-721 tokens are non-fungible tokens (NFTs) which are used to create unique digital items that are each different from one another.

ERC-223 is an improved version of the ERC-20 token standard and provides additional security features, while ERC-777 is a more advanced standard and provides users with more control over their tokens.

Evolution of Ethereum Token Standards

The evolution of Ethereum token standards has been an incredibly dynamic process. Ethereum as a platform has enabled the rapid issuance and transfer of tokens that are secured by the underlying blockchain technology.

Ethereum token standards are the rules and conditions that govern the issuance, transfer, and management of tokens. These standards are crucial for ensuring the security and reliability of tokens, as well as the interoperability of tokens with other Ethereum-based applications.

The first token standard created for Ethereum was ERC20, which was released in 2015. This standard provided a basic set of rules governing how tokens could be created, transferred, and managed on the Ethereum blockchain.

Since then, numerous token standards have been developed, each adding additional features and capabilities to the tokens. These include ERC223, ERC721, ERC777, and ERC1155, all of which offer more advanced features than ERC20.

For example, ERC721 tokens are non-fungible tokens, meaning each token is unique and can be used to represent something such as a digital artwork or collectible. ERC1155 tokens can be used to represent ownership of physical items, such as land or gold.

The continuous evolution of Ethereum token standards has enabled the development of a wide range of tokenized applications, from DeFi protocols to digital art galleries.

As the Ethereum ecosystem continues to grow and evolve, more complex and powerful token standards will likely be developed, further unlocking the potential of the Ethereum blockchain and tokenized applications.

An overview of ERC-20 Token Standards

ERC-20 token standards, also known as Ethereum Request for Comment, are a set of technical standards used for smart contracts on the Ethereum blockchain. These standards define a common list of rules that all Ethereum-based tokens must adhere to.

The most important of these rules is the ability for tokens to be transferred from one address to another, which is the foundation of a token economy.

Additionally, ERC-20 tokens have a number of other features, including a standard method of tracking and managing balances, a method to receive and send tokens, and a way to verify token ownership.

The use of ERC-20 tokens has grown exponentially in recent years, with thousands of different projects creating their own tokens based on the standard. This has led to an increase in the number of decentralized applications (DApps) being created on the Ethereum blockchain, with many of these projects focusing on the creation of new and innovative tokens. As a result, the ERC-20 token standard has become one of the most widely adopted standards in the space, with developers using it to create new tokens for a variety of different use cases.

The ERC-20 token standard is a major part of the Ethereum ecosystem and continues to be used by developers around the world to create powerful, reliable, and secure applications.

Thanks to the wide adoption of the standard, developers have been able to create a variety of different tokens, allowing them to build a broad range of decentralized applications and products. This has opened up a world of opportunities for developers, allowing them to create innovative solutions and unlock the potential of the Ethereum ecosystem.

An Overview of ERC-721: Non- Fungible Tokens

ERC-721 tokens, also known as Non-Fungible tokens (NFTs), are blockchain-based digital assets that are not interchangeable like traditional cryptocurrencies such as Bitcoin.

ERC-721 tokens are unique digital tokens which can represent any asset such as a digital asset, a physical asset, or a real-world asset like a house or a car. Each ERC-721 token is a non-fungible asset, meaning it is not interchangeable with any other ERC-721 token.

As such, these tokens can be used to represent a wide range of digital assets, such as art, collectibles, or game items.

ERC-721 tokens are built on the Ethereum blockchain, which allows them to take advantage of the blockchain’s inherent decentralization and security.

ERC-721 tokens are immutable, meaning they cannot be changed or altered once they are created. This provides an additional layer of security for users, as the tokens can’t be altered or changed without the user’s permission.

Additionally, ERC-721 tokens are stored on the Ethereum blockchain, making them accessible from anywhere in the world.

The ERC-721 token protocol has been widely adopted by the cryptocurrency community, and is increasingly being used to create unique digital assets. These tokens can be used to create unique digital collectibles, or as a means of ownership for digital assets such as real estate, art, or music.

Furthermore, ERC-721 tokens can be used to create digital assets that are used in gaming, such as in-game items, which can then be traded or sold on the open market.

An Overview of ERC-1155: Multi-token Standard

ERC-1155 is a multi-token standard based on the Ethereum blockchain that enables developers to issue multiple tokens in a single transaction. This multi-token standard allows the coding of multiple token classes within the same smart contract, saving time and energy on the Ethereum blockchain. It is also compatible with existing ERC-20 and ERC-721 tokens, making it easy to integrate with existing projects.

This multi-token standard has a wide range of features, including efficient gas cost, meta data support, and several transfer methods. It also allows for the creation of unique tokens with unique properties, such as divisible or indivisible tokens, which can be used for different purposes.

Additionally, tokens can be transferred to multiple addresses in a single transaction, which is not possible with the traditional ERC-20 or ERC-721 standards. This allows for simplified and streamlined token management, enabling faster and more efficient transfer of tokens.

Overall, the ERC-1155 standard is a powerful tool for developers, providing a secure and efficient way to create and manage a variety of tokens. It offers increased flexibility, improved gas cost, and simpler transaction processing, making it a great choice for developers who want to take advantage of the Ethereum blockchain.

ERC20 vs ERC721 vs ERC1155: Detailed Comparison

The Ethereum network is designed to support programmable tokens that are used to represent digital assets, such as cryptocurrencies and other digital assets.

Three of the most popular token standards on the Ethereum network are ERC20, ERC721, and ERC1155. Each of these token standards have their own distinct features and use cases.

The ERC20 token standard is the most widely used token standard on Ethereum. It is the most basic token standard and is used for the creation of fungible tokens, which are indistinguishable from one another. It is used for the creation of digital assets such as cryptocurrencies and digital tokens that are used to represent other digital assets.

The ERC721 token standard is used for the creation of unique digital assets, such as Non-Fungible Tokens (NFTs). These tokens are unique and cannot be duplicated. They are often used to represent digital art, real estate, virtual property, collectibles, and other digital assets.

The ERC1155 token standard is a newer token standard that is designed to support both fungible and non-fungible tokens. It is a multi-token standard that is used for the creation of fungible tokens, non-fungible tokens, and hybrid tokens. It is also used for the creation of smart contracts that can manage both types of tokens.

Overall, each of these token standards have their own distinct features and use cases. ERC20 is the most widely used token standard and is used for the creation of fungible tokens. ERC721 is used for the creation of unique digital assets, such as non-fungible tokens. And ERC1155 is a newer token standard that is designed to support both fungible and non-fungible tokens.

Conclusion

So, now that you know about the three types of token standards, it’s time to decide which type is best for your needs. I hope this article helped narrow down your choices But if you still need any help, consult with our experienced developer for best suggestions.