Introduction to Token Standards: ERC-20, ERC-721, ERC-777, and ERC-1155
Most blockchain smart contracts currently use Ethereum, and the most common token standards are ERC-20, ERC-721, ERC-777, and ERC-1155. Many blockchain smart contracts currently use Ethereum, and the most common token standards are ERC-20, ERC-721, ERC-777, and ERC-1155. ERC-20 is a technical standard used to create smart contract-enabled tokens on Ethereum. It defines the rules and functions that any token of this kind on the Ethereum blockchain must follow. This includes rules for transferring and spending tokens, getting the token balance of an address, and so on.
Querying an owner is more difficult as some accounts may have one token while others may have multiple. The ERC-1155 token standard is ideal for a collection of tokens while ERC-20 and ERC-721 are better suited for individual tokens. With ERC-1155, an infinite number of items could be stored in a single contract. Exchanging different items between a group of friends can now be done in a single transaction instead of multiple.
The purpose of this website is solely to display information regarding the products and services available on the Crypto.com App. It is not intended to offer access to any of such products and services. You may obtain access to such products and services on the Crypto.com App. On top of the compulsory functions above, there are other optional functions that can improve the usability of an ERC-20 token, including Token Name, Ticker Symbol (e.g., ETH), and Divisibility . For more information about the tokenURI metadata JSON Schema, check out the ERC721 specification. With the advent of blockchain, every industry could undergo…
ERC-1155: Multi-token Standard
Each quarter is always worth 25 cents and can be exchanged for other quarters. Popular ERC-20 tokens include stablecoins and governance tokens. The most common standards and also the ones supported on Kaleido are ERC-20, ERC-721, and ERC-1155. Governance tokens allow holders to partake in future decision-making processes of their native platform. An example of a governance token is UNI, Uniswap’s native token. Holders of UNI have voting power over proposals submitted to the Uniswap protocol and those that hold more UNI have greater voting power.
- While ETH is the coin built by Ethereum on its own blockchain, Basic Attention Token , Bancor , OmiseGO and others are tokens built on top of the Ethereum blockchain.
- With the growing demand for NFTs, ERC-721 tokens are definitely a hot topic now.
- Two of the most popular token standards in the Ethereum ecosystem are the ERC20 and ERC721 tokens.
- Each fungible token or a fraction of said token holds equal value to another.
- Bitcoin is another example of a fungible token, but in cryptocurrency, where 1 BTC is worth 1BTC regardless of where it is issued.
To learn more, check out our article on 10 Ways Enterprise NFTs Will Change How We Do Business. At its most basic form, a token is a representation of value and a concept that has been an integral part of humanity for thousands of years. The earliest stages contained shells and rocks and nowadays we are familiar with things such as money, casino chips, tickets, reward points and more.
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The fundamental way to describe fungible tokens is that no single token is worth more or less than the other. Fungible tokens are also divisible digital assets, meaning you can exchange these with the same type of assets, and the value would remain the same. Unlike ERC-20, ERC-721 is the token standard used to create non-fungible tokens, popularly known as NFTs, on the Ethereum blockchain. Smart contract standards are stipulations & rules a contract must adhere to function appropriately on the blockchain.
Like with ERC20 standards, ERC721 also has an outline of rules that require certain features of a token. The value of ERC-721 tokens depends on the uniqueness and rarity of the asset. The “transferFrom” component helps in transferring tokens between users. ERC20 vs. ERC721 differences clearly, then you need to know the differences between fungibility and non-fungibility.
ERC-721 Token Standard
Fundamentally, smart contract standards are rules that a smart contract must comply with in order to function as intended on the underlying blockchain network. The most popular use case for ERC-1155 tokens right now are in the Web3 gaming space. Assets in the game can act as fungible tokens such as skins or in-game currencies.
ERCs are numbered, and, as you may have guessed, there have been hundreds of ERCs. However, as of this writing, fewer than thirty of these ERCs are adopted as standards, and some of them don’t make a huge difference. While it’s not as decentralized as Bitcoin, no one person makes all of the decisions. So, even really important things go through a very open and public decision-making process called an Ethereum Improvement Proposal . But these two Ethereum-based tokens are the ones you should care about.
Furthermore, ERC20 describes the API of smart contracts rather than their implementation. As a result, you have functions referred to as code groups when you have a smart contract. The interface explains what a smart contracts’ function should be beforehand.
It is again important to note that the tokens live on the Ethereum blockchain. They aren’t independent and rely on Ethereum’s blockchain and platform. The native currency on the Ethereum network is Ether but it can also support other tokens and these can work like currencies that can represent shares of a company, gold certificates, and so on. Standard has opened up new possibilities for smart contracts to serve as non-fungible assets. You can notice ERC-721 tokens in notable applications such as CryptoPunks, CryptoKitties, and many others.
How much Ethereum do you need to sell an NFT?
As blockchain and cryptocurrency reach mass adoption, there are 6 main types of tokens in this Web3 world. ERC-20 is the current LP token prevalent worldwide, but it requires erc20 vs erc721 the deployment of separate smart contracts for each token. Considering this, ERC-3475 provides issuers of bonds with the facility of multiple bond redemption.
The tokens have the same values and they are replaceable with another copy of the token. This makes it fungible i.e mutable or changeable or not unique. “allowance” specifies the set number of tokens that are returned from the spender to the owner. With the “approve” component, the tokens can allow spenders to withdraw a particular number of tokens from a given account. However, the other six components are mandatory for the tokens following ERC-20 standard.
ERC stands for Ethereum Request for Comment and is a set of technical documents that contain guidelines for developing a smart contract. ERC-20 represents the value of fungible assets and is useful to organize crowdfunding campaigns, issue ICOs, and launch more cryptocurrencies in the market. In addition, dApps should also have https://coinbreakingnews.info/ a “converter” to regulate the input and output process of NFTs. For example, the converter considers tokenId as input and outputs non-fungible tokens such as an image of zombies, kills, gaming collectibles, etc. Smart contract standards contain token standards, library themes & formats, name registries, and related details.
The core token on the EOSIO mainnet, EOS, is also issued under the account eosio.token using this smart contract. Token standards are the set of rules that run crypto tokens on a blockchain. Therefore, the services of a reputable software development company would be required. Introduced in 2017, ERC-721 is a revolutionary token standard that set off the NFT phenomenon and became an NFT creation pillar in Ethereum’s ecosystem. The ERC-721 token standard has been a cornerstone for billions of dollars worth of NFTs.
In case, you want to sell several editions of your collectible art or painting, then you can utilize the ERC1155 token standard to create several fungible documents of the same painting. Many other tokens, blockchains, and ecosystems have derived from Ethereum. One such ecosystem and blockchain belongs to Binance, the cryptocurrency exchange. The team behind Binance created its own blockchain, the Binance Chain, from an Ethereum fork. ERC-20 was proposed by developer Fabin Vogelstellar in 2015 to address the need for a standard within smart contracts on the Ethereum blockchain. Vogelstellar submitted the proposal via the project’s Github page as an Ethereum Request for Comment .