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Table Of Contents
Learning about the top 10 ERC token standards can help you succeed. The Ethereum ecosystem is the largest and most popular blockchain community in the world. Ethereum has always been a strong contender in the market due to its pioneering efforts and proprietary technology.
When you review the rise of this mighty crypto community, you can't help but realize the prominent role that token standards have had on its journey. Token standards can be seen as one of the most influential developments in the industry.
Prior to token standards, you had multiple developers working on projects that may or may not be able to communicate and interact with other protocols. The introduction of standards to the crypto market, as any, helped to drive innovation and has led to a constant expansion of the most popular networks. Here are the top 10 ERC-20 token standards in use today.
ERC (Ethereum Request for Comment) is a set of guidelines to ensure interoperability between new and old dApps and platforms. The original goal of the project was to streamline the creation of digital assets in-house. However, it quickly became popular for regular users and startups to expedite token creation.
The ERC token standardization movement has seen considerable growth alongside the rising number of formats available. Each of these token standards serves a unique purpose that makes it ideal for its tasks. From compliance to scalability, there's a token standard to meet your needs.
The first token standard to hit the market was the ERC-20 standard. This standard emerged in the middle of 2017 after Vitalik Buterin and the rest of the Ethereum team realized that people wanted a simplistic way to launch tokens. The results of making the ERC-20 token available to everyone were immediate.
The ERC-20 standard has helped thousands of startups and developers create tokens and platforms that seamlessly merge with the Ethereum community. Notably, the standard is still widely used today, even though the competition has increased and new standards offer more specialized functions.
The ERC-20 token standard is a capable solution enabling developers to create fungible and non-fungible assets. This standard is capable of tokenizing real-world assets as well. This flexibility and its role as the first and most popular standard has made ERC-20 the top option in the market today for many. It's mostly found in stablecoins, governance tokens, and project launches such as ICOs.
The ERC-721 token format was created to serve the growing NFT community. NFTs are digital assets that can represent individual assets. As such, they are best used for gaming, collectibles, and tokenization. The ERC-721 standard was made famous by the collectible game CryptoKitties.
ERC-721 was first proposed by William Entriken, Dieter Shirley, Jacob Evans, and Nastassia Sachs in January 2018. The standard differs from its predecessor in some key ways. For one, it leverages an API for tokens built directly into smart contracts. This structure adds more functionality, such as the ability to approve third-party transfers. All of these factors make ERC-721 a smart option for game and collectible developers.
The continued expansion of the Ethereum ecosystem led to the eventual creation of the ERC-115 protocol. This token standard was first introduced by Enjin CEO Witek Radomski. The goal of this standard was to make a more inclusive option for developers. As such, it combines many of the features of the previous two standards.
This token standard leverages a robust interface that enables developers to fulfill deployment requirements and correct any issues that arise from one location. ERC-1155 can represent all types of digital assets, including non, semi, and fully fungible assets. Today, the token serves a crucial role as a go-to option for NFT game developers. It's also used in ICOs, digital ID systems, and gaming applications.
ERC-115 provides added functionality without reducing security. Developers have found that this standard is a bit more programmable than its predecessors and can scale more efficiently. Consequently, many developers have turned to ERC-1155 to solve their issues and launch their platforms.
The ERC-777 protocol improves token management services for developers. The system allows creators to add more specifications on how and to whom their tokens can be transferred. This added logic makes it better suited to certain applications, such as dealing with regulated tokens and fixed assets.
The ERC-777 protocol has many benefits that make it stand out against the other options. For one, it supports unique options such as automatic swaps and send-and-receive hooks. Additionally, all ERC-777 tokens are backward compatible with ERC-20 token standards, adding to their interoperability and ease of use.
The rise of security tokens led to the creation of the ERC-14000 tokens standard. This standard emerged as a viable way to help solve some of the regulatory issues that ICOs had encountered the years prior. Security tokens are unique in that they have all regulatory compliance tasks built directly into their core coding.
This structure means that these tokens can be used to tokenize regulated assets such as real estate. The system enables developers to meet all regulatory criteria without exception. Additionally, since all the security token requirements are baked into the token itself, the asset remains compliant throughout its life cycle.
ERC-1400 is a popular token standard that is in use across a variety of industries. Today, you can find developments in tokenizing equity, property, debt, and much more using this standard. This standard has also found a home in the art sector where its features can help to demonstrate ownership and validate projects.
One of the safest ways to use crypto is via a multi-sig wallet. These wallets require multiple people to sign off to transfer. The same concept now goes for tokens. The ERC-4337 standard supports multi-signature wallets on Ethereum. This structure makes it easier to solve complex ownership issues and create more innovative structures around assets.
ERC-4337 tokens are a great way to ensure that all parties approve of the token's actions. Additionally, these tokens have found some use in governance mechanisms. Here they can ensure that only after the signers approve changes do the upgrades occur. ERC-4337 offers security, scalability, and transparency to the market.
NFT technology is often seen as the best option for representing digital assets. However, many people overlook its use as an identifying token. Decentralized identity management systems are on the rise, and for good reasons. They lower costs, increase efficiency, and provide high security.
Thanks to this token standard, implementing these digital ID systems is now easier than ever. This standard was built from the ground up to handle verification tasks such as verifying claims and credentials. Additionally, the standard is the first to support ID management systems. These systems help to protect your ID and the systems they operate within.
The ERC-6551 tokens standard was created to help reduce gas prices for transaction-intensive Dapps. The Ethereum gas price concerns have been an issue for years. The network has implemented many updates to lower these fees, but many still desire a token standard that makes this process easy.
The ERC-6551 tokens standard helps resource-intensive dApps and blockchain networks remain responsive. To accomplish this task, the protocol enables the batch processing of transactions. This feature lowers the gas prices significantly for these dApps. It also reduces network congestion.
The ERC-4626 tokens standard is the evolution of the space. This next-generation standard improves the communication between network nodes and smart contracts significantly. These tokens are designed to reduce complexity by integrating self-describing smart contracts.
These smart contracts make it easier to build complex dApps from scratch. They enable creators to offer more features and track their assets with more clarity. Additionally, their versatile nature makes them a smart option for many of the tasks that traditional ERC-20 tokens would handle.
The latest trend in the NFT race is composable tokens. These are NFTs that can be created on top of each other. They are often used in gaming scenarios where users can customize their avatars or other items. This feature enables developers to create and manage complex token structures across vast networks.
Currently, the ERC-998 tokens standard is used to create collectible and gaming tokens that can be upgraded via other token add-ons. They are often used in DAOs to improve transparency. Lastly, the standard provides a reliable and effective way to tokenize real-world assets quickly.
Top 10 erc-20 token standards – Just the tip of the Iceberg
It's exciting to see how the Ethereum community has continued to keep up with the changing market by expanding these token standards. Today, developers have more tools and options to consider when creating. Understanding the different token types and their purpose can help you create better dApps that cost you and the user less. As such, the Ethereum token standard movement can be seen as a pioneering force in the market that will remain a strong contender for the foreseeable future.
You can learn more about exciting blockchain projects here.