If you’re creating a currency or a token that needs to be easily divisible and interchangeable, ERC-20 is probably your best bet. If you’re creating unique digital assets, like art or collectibles, ERC-721 is the way to go. And if you need a mix of both, or you want to save on gas fees by bundling different types of tokens into a single contract, ERC-1155 might be the answer.
Ethereum Transaction ID
- It’s also relatively simple to implement, which makes it a good choice for new projects.
- While ERC-20 remains the definitive Ethereum token standard, there are several new token standards currently in development.
- Developers were able to crowdsale the tokens to the Ethereum community and raise significant amounts of money.
- The history of the ERC-20 standard is deeply interlinked with the history of Ethereum itself.
It also serves as a governance token that enables users to participate in protocol governance. ERC-20 tokens can be stored and managed using a wide range of Ethereum wallets, ensuring easy access for users across different platforms and device types. Although not mandatory, these three functions may be useful to users and developers alike that may interact with the specific coin. For example, the name and symbol can help identify the token so users don’t accidentally buy or send the wrong one. As the network continues to grow, we can expect to see ERC-20 tokens gain more utility.
Interoperability Among Token Standards
ERC-721 introduced the concept of non-fungible tokens (NFTs) with unique identifiers for each token. NFTs support complex ownership structures for use cases like virtual worlds, art, ticketing, collectibles, and more. Additional ERC-20 tokens include Compound (COMP), Basic Attention Token (BAT), Polygon (MATIC), The Sandbox (SAND), Immutable (IMX), Wrapped Ethereum (WETH), and Pepe (PEPE). These examples of ERC-20 tokens represent just a fraction of the diverse ecosystem of Ethereum-based tokens, each serving unique purposes and catering to various use cases within the DeFi ecosystem. WBTC is an ERC-20 token pegged to the value of Bitcoin, allowing users to access Bitcoin liquidity on the Ethereum blockchain. ERC-20 tokens can be easily traded, exchanged, and integrated into various Ethereum-based applications, enhancing usability and interoperability between dApps.
By leveraging Ethereum’s robust infrastructure, an ERC20 token inherits the scalability and security features of the Ethereum blockchain, facilitating efficient transactions and smart contract execution. Another thing you need to know about tokens is that they are not held by accounts. Tokens exist in contracts, which function like decentralized databases that map tokens to the appropriate Ethereum address. Also, it is the token contract that governs and specifies the rules that apply to a given token.
Benefits of Using ERC-1155
“Token” and “Cryptocurrency” are often used interchangeably; all cryptocurrencies are tokens, but not all tokens are cryptocurrencies. Token, in the context of ERC-20 compliance, simply means a blockchain representation of something that meets the standards set by the Ethereum community to be considered a smart contract standard-compliant token. This means that other tokens can run on top of it, and decentralized applications (dapps) can be built atop it using smart contracts. ERC20, which stands for “Ethereum Request for Comments 20,” is a technical standard used for issuing and managing tokens on the Ethereum blockchain.
Gas fees can fluctuate based on network congestion and the complexity of the transaction. For instance, high traffic https://ai-robert.com/ or complex smart contracts can lead to users paying higher fees. ERC-20 is the common set of criteria that outlines rules and technical specifications an Ethereum token must follow to function optimally and interoperably on the Ethereum blockchain. Tokens are developed using smart contracts, which are self-executing software programs that define how blockchain protocols automatically control, execute, and/or document transactions.
ERC-20, the most widely adopted token standard on the Ethereum blockchain, has profoundly influenced the development of other token standards and protocols within the cryptocurrency ecosystem. DEXs rely on the “balanceOf” function to verify token ownership and facilitate swaps and trades effectively. Moreover, smart contracts leverage the “balanceOf” function to enforce token-based functionalities like staking, voting, or reward distribution based on users’ token balances.
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