Ethereum (ETH) Token Standards

Ethereum (ETH) Token Standards

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Ethereum token standards are protocols for creating and issuing tokens on the Ethereum blockchain. These standards provide a set of rules that must be followed for a token to be compatible with Ethereum wallets and other Ethereum-based smart contracts. Several different token standards have been developed for Ethereum, including ERC-20, ERC-721, and ERC-1155.

Ethereum Popular Token Standards

The most popular token standard on Ethereum is ERC-20, which defines a set of rules for creating a fungible token (i.e., interchangeable) that can be used as a currency. ERC-20 tokens are widely used for various purposes, including fundraising through initial coin offerings (ICOs), creating loyalty programs, and representing a real estate or artwork assets.

ERC-721 is a token standard for creating non-fungible tokens (NFTs), which are unique and cannot be exchanged for other tokens on a one-to-one basis. ERC-721 tokens are often used to represent collectible items, such as digital art or in-game items, and real-world assets, such as real estate or artwork.

ERC-1155 is a token standard that allows for the creation of fungible and non-fungible tokens in a single contract. This can be useful when an application needs to manage both types of tokens.

ERC-4626 is a newer token (May 2022) that allows the creation of a tokenized vault with burned tokens. Burning tokens are permanently destroyed (i.e., “burned”) to reduce their total supply and potentially increase their value.

The Purpose of Ethereum Token Standards

The main purpose of Ethereum token standards is to provide a set of rules and guidelines for creating and issuing tokens on the Ethereum blockchain. This helps to ensure that tokens are interoperable and can be easily used with other Ethereum-based applications and contracts.

Here are some examples of the different purposes that Ethereum tokens can serve:

  • Fungible tokens (e.g., ERC-20): These are interchangeable and can be used as a currency or store of value. They are often used for fundraising through initial coin offerings (ICOs) or as a means of exchange within a particular ecosystem.
  • Non-fungible tokens (e.g., ERC-721): These are unique and cannot be exchanged for other tokens on a one-to-one basis. They are often used to represent collectible items, such as digital art or in-game items, and real-world assets, such as real estate or artwork.
  • Hybrid tokens (e.g., ERC-1155): These tokens allow for creating fungible e and non-fungible tokens in a single contract. This can be useful when an application needs to manage both types of tokens.
  • Tokenized Vault Standard (e.g., ERC-4626): This standard allows for creating “burning” tokens. ERC-4626 outlines rules for creating and managing burning tokens, including how they can be burned and how the token’s total supply can be determined.

Additional Ethereum Standards

  1. ERC-223: An extension of the ERC-20 token standard that aims to improve on the ERC-20 standard by addressing some of its limitations, such as the potential for tokens to be lost when they are accidentally sent to a smart contract instead of a wallet address.
  2. ERC-777: A token standard that aims to improve upon the ERC-20 standard by adding additional functionality, such as sending tokens to multiple addresses in a single transaction and canceling and revoking transactions.
  3. ERC-1363: A token standard that allows for creating tokens representing real-world assets, such as stocks, bonds, and other financial instruments.
  4. ERC-1594: A token standard that allows for creating tokens representing real-world assets, such as real estate or art, and can be traded on the blockchain.
  5. ERC-1643: Another Ethereum token standard that allows for creating tokens representing physical goods, such as collectibles or art.
  6. ERC-621: The ERC-621 standard is an extension of the ERC-20 standard that adjusts the total supply of a token after it has been issued. This can be useful in situations where the total supply of a token needs to be increased or decreased, such as when tokens are being burned or minted.
  7. ERC-827: The ERC-827 standard extends the ERC-20 standard that allows transferring tokens and data in a single transaction. This can be useful for situations where it is necessary to attach additional information to a token transfer, such as when tokens represent physical assets.
  8. ERC-882: The ERC-882 standard creates tokens that rrepresentingworld assets, such as stocks or bonds. The standard defines a set of rules for creating, issuing, and managing these types of tokens on the blockchain.
  9. ERC-998: The ERC-998 standard is used for creating composite tokens, which are made up of multiple other tokens. This can be useful for creating tokens representing a basket of assets or creating tokens with complex ownership structures.
  10. ERC-1337: The ERC-1337 standard is used to create and manage tokens representing in-game items or other digital assets. The standard defines a set of rules for creating, issuing, and managing these types of tokens on the blockchain.
  11. ERC-1400: The ERC-1400 standard is used for creating and managing security tokens, which are tokens that represent ownership in a company or other real-world assets. The standard defines a set of rules for creating, issuing, and managing these types of tokens on the blockchain.

To create a token using one of these standards, a developer must write a smart contract that follows the rules defined by the chosen standard. This smart contract can then be deployed to the Ethereum blockchain, at which point the tokens it represents can be issued and transferred between users.

In Summary

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Ethereum token standards enable the creation of a wide range of tokens with various purposes. Furthermore, they provide a standardized way for these tokens to be used and transferred on the Ethereum blockchain.

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