Ethereum ERC Token Standards — An Innovative Guide For Startups and Ethereum Token Enthusiasts
By: Chris Morris
Tags: Ethereum Blockchain, Erc721, Ethereum, Erc20, Erc Token Standards

Ethereum ERC Token Standards — An Innovative Guide For Startups and Ethereum Token Enthusiasts

The best resource that replicates the prominent ethereum token standards by showcasing their speciality & differences. chris morris Follow Feb 16 · 7 min read

Ethereum Token Standard Types

Ever stumbled on choosing your suitable Ethereum standard? As far as I know, ERC20 is one of the popular Ethereum token standards. You know what; There are more than ten Ethereum token standards out there. If you are about to create an Ethereum token, it is better to know the various standards and pick the suitable one for your Business. Here In this blog, I’ve listed those ERC token standards and also broke down the most popular ones among them. Before getting deep, Let us brush up, What is Ethereum?

In the world of digital currencies, the term “Ethereum” is not a new term. As we know that Ethereum is an open-source decentralized blockchain that has several beneficial factors and use cases in the real-world. Vitalik Buterin first invented Ethereum and he is a well-skilled developer who has more interest in cryptocurrencies and blockchain technology. In the blockchain world, the Ethereum blockchain was mainly developed to run smart contracts. It is a piece of code stored on the blockchain and that eliminates the intervention of third-party. Apart from this, Ethereum also helps to develop decentralized applications.

When it comes to cryptocurrency, Ethereum is the second-largest and most traded digital currency across the world. It has a great market cap and a high trade volume in all the reputed crypto trading platforms. Ethereum remains the more popular and valuable cryptocurrency after bitcoin. On the flip side, Ethereum is one of the best token development platforms in the blockchain space. We can also say that it is a separate blockchain and used for offering various services. Such as Ethereum token development, smart contracts development, and Dapp development. However, Ethereum provides data security that assures the smooth working of all the underlying processes.

Ethereum is a kind of public blockchain platform, so anyone can write, and participate. It is the Proof of Work-based platform and it will be slow in terms of speed. But experts in the Ethereum community say that it may change its consensus algorithm to Proof of Stake in the future. Ethereum has different ERC token standards and each has distinct functionalities and protocols.

Now, you may ask…

What is ERC Token Standard?

Generally, ERC stands for Ethereum Request for Comments. ERCs are application standards for the Ethereum blockchain network. ERC includes token standards, name registries, package formats, and more. The common ERC standard defines a required set of functions for a token type and allows smart contracts to interact with them. At this current time, the most common and popular ERC standard is the ERC-20. It is a type of standard that makes the creation and exchange of Ethereum-based tokens easy. However, startups and entrepreneurs should be aware of the different ERC token standards that are existing in the Ethereum blockchain.

So now, let us see…

Types of Ethereum ERC Token Standards

Here is the list of different types of ERC token standards that are prevailing in the global crypto market.

ERC20

ERC20 is the most popular and functional ERC token standard type in the Ethereum network. It was first introduced about a year after Ethereum was introduced in the market. ERC20 standard tokens are more popular because they are widely used for Ethereum token creation, smart contacts, and decentralized applications securely. Mostly all the crypto tokens developed on Ethereum blockchain are ERC20 standard. Also, all the ERC20 tokens are considered fungible tokens. Some examples of ERC20 tokens are status, OMG network, and Ox. All ERC20 standard tokens are fungible tokens so it will be easier for ICO projects to distribute tokens and raise the funds efficiently. Users can trade these tokens without any hassle and they can use them in token economics.

ERC20 standard has a separate protocol and a simple interface that helps to provide a smooth transaction for users. By using this ERC20 token standard, developers can create their desired type of crypto tokens under the Ethereum blockchain. Apart from this ERC20 standard has helped many Dapps across distinct domains by becoming a part of various ICO projects. The ERC20 standard contains six sets of functions that must be correctly implemented to meet the token standard. Those ideal functions are mentioned below.

Allowance

Approve

transferFrom

transfer

balanceOf

totalSupply

when comparing with other ERC token standards, ERC20 is more functional and efficient with many productive practices. Thus many startups and entrepreneurs prefer the best ERC20 token development company to create ERC20 tokens.

ERC223

ERC223 is a standard that defines the token ERC20 standard with an added functionality. So it is an updated version of the ERC20 token standard. It comes with a set of features similar to the ERC20 standard. So ERC223 standard tokens are also fungible tokens. This standard mainly focuses on improving the overall functionality of the Ethereum token development process. Even though the ERC-20 standard is very useful but it has some flaws. when people mistakenly send ERC20 tokens to a smart contract which are not built-in ERC20. Then they will lose their tokens permanently and cannot retrieve them.

To overcome this flaw, the ERC223 standard was introduced in the market. It allows users to transfer tokens to smart contracts and wallets with the same function. In addition to this, it improves efficiency, and transfers require only a single step. So ERC223 token standard transfers are cheaper when compared to ERC20 transfers.

ERC-223 tokens are backward compatible with ERC-20 tokens. So they can maintain all the original functionality while solving those bugs. In the future, the ERC-223 standard may supplant ERC20 as the most widely used standard for Ethereum tokens. However, many Ethereum token wallets don’t support ERC223 standard tokens,

ERC721

ERC721 is also a popular and well-known ERC token standard in the crypto marketplace. It is mainly known for rendering non-fungible tokens. It has a unique characteristic that makes this standard highly valuable and they are collectible. Crypto tokens created on this standard are different from each other with various characteristics. Currently, the ERC721 standard tokens are developed more when compared to the ERC20 token.

In ERC20 and ERC223 token standards, we have a supply of tokens and they are interchangeable. But ERC721 standard tokens are non-interchangeable with other tokens. In ERC721, a smart contract must be implemented to trade tokens and manage them. Thus, the main feature of ERC721 standard tokens is non-fungible. ERC721 standard tokens can be listed on any crypto trading platform. But the value of the token is based on its functions and characteristics.

For example, cryptokitties, Axie, avastar, and SWAPO are the popular Ethereum tokens developed on ERC721 standard. But crypto kitties were the first ERC721 standard token. Thus, many people are showing their interest in creating ERC721 tokens for their business.

ERC777

The ERC777 standard is also backward compatible with the ERC-20 and like the ERC223 token standard, it also eliminates the flaw of the ERC20 standard. Additionally, this standard uses advanced transaction handling mechanisms. This Ethereum standard provides more efficiency to the existing Ethereum tokens. It helps to increase the token disposition and allows many operators to join the Ethereum network. Besides these, it also helps to regulate the working of ethereum tokens.

The ERC777 standard tokens allow their token holders to authorize operators who can manage their tokens on their behalf. It can create an emergency recovery function that can be activated in the event of the loss of your private key. By providing improved handling of transactions over the ERC-20 standard, the ERC777 can also consider as the most used Ethereum token standard. Until now, the adoption of this standard has been slow. But in the future, developers will take advantage of this ERC token standard.

These are the prominent ERC token standards in the global crypto market. But apart from these, there are also other Ethereum token standards that have different protocols and functionalities. Such as

ERC165

ERC621

ERC820

ERC827

ERC884

ERC865

ERC1155

ERC1337

ERC1400

and more…

Even though Ethereum has many ERC token standards, only two of them are more preferable for startups and entrepreneurs to create crypto tokens on the Ethereum blockchain. Such as ERC20 and ERC721. Now, you may ask…

Difference between ERC20 vs ERC721?

Final Words

I hope now you have some idea about ERC token standards. In the future, many ERC token standards will emerge and each token standard will roll out new features & bug fixes for the existing tokens. If you have an idea of creating an Ethereum token, then first you need to choose the token standard type. Currently, ERC20 and ERC721 are the most functional and valuable token standards. But the choice is yours, so select the right ERC token standard type and create your own Ethereum token with the help of a professional and the best Ethereum token development company. Because it is an essential step to launch a successful Ethereum token for your business.