Today, I will explain the three main token standards embraced by the Ethereum community: ERC20, ERC721, and ERC1155.
Each of these standards has its core functionalities and use cases, catering to different needs within the blockchain ecosystem.
ERC20: The Standard Token
Each of these standards has its core functionalities and use cases, catering to different needs within the blockchain ecosystem.
ERC20: The Standard Token
The ERC20 token standard is akin to the concept of "money" in the digital blockchain space. It represents fungibility, meaning each token is identical to another, making it perfect for use as a digital currency. The total supply of ERC20 tokens can be either fixed or dynamic, determined at the time of contract deployment. Token minting allows for the creation of new tokens post-deployment, which can then be allocated to specific addresses in desired amounts.
This flexibility in supply management, coupled with the ability to easily transfer tokens between addresses, has made ERC20 a foundational standard for creating and managing digital currencies on the Ethereum blockchain.
ERC721: The NFT Standard
This flexibility in supply management, coupled with the ability to easily transfer tokens between addresses, has made ERC20 a foundational standard for creating and managing digital currencies on the Ethereum blockchain.
ERC721: The NFT Standard
Moving on to ERC721, the standard that introduced the world to Non-Fungible-Tokens (NFTs). Each ERC721 token is unique, identified by a specific ID that is typically incremented with each minting event. This uniqueness differentiates it from ERC20 tokens, as it allows for the representation of individual, distinct assets. This non-fungibility introduces a lot of use-cases:
Digital Art and Collectibles:
ERC721 has revolutionized the art world by enabling artists to tokenize their works, ensuring authenticity and ownership through the blockchain.
Gaming:
In blockchain-based games, ERC721 tokens can represent unique in-game items or characters, providing verifiable ownership and the possibility of trading or selling within the game's ecosystem or in external marketplaces.
Real Estate and Asset Tokenization: By tokenizing real-world assets like real estate, ERC721 tokens can represent ownership or specific rights to physical properties, enabling a new form of investment and asset management.
ERC1155: The Multi-Token Standard
Digital Art and Collectibles:
ERC721 has revolutionized the art world by enabling artists to tokenize their works, ensuring authenticity and ownership through the blockchain.
Gaming:
In blockchain-based games, ERC721 tokens can represent unique in-game items or characters, providing verifiable ownership and the possibility of trading or selling within the game's ecosystem or in external marketplaces.
Real Estate and Asset Tokenization: By tokenizing real-world assets like real estate, ERC721 tokens can represent ownership or specific rights to physical properties, enabling a new form of investment and asset management.
ERC1155: The Multi-Token Standard
The ERC1155 standard is a versatile and innovative approach to tokenization, blending the characteristics of ERC20 and ERC721.
It allows for both fungible and non-fungible tokens to coexist under a single contract.
With ERC1155, a token ID can represent a class of items (similar to ERC20's fungibility) or a unique item (akin to ERC721's non-fungibility), depending on the quantity associated with the ID. This flexibility is particularly beneficial for applications such as:
On-Chain Gaming:
Developers can utilize ERC1155 to create a diverse range of in-game assets, from common items (fungible) to rare or unique equipment (non-fungible), all within a single, efficient contract structure.
Asset Bundling:
It enables the bundling of multiple types of assets into a single transaction, reducing the cost and complexity of operations like transferring or selling multiple items.
In conclusion
ERC20, ERC721, and ERC1155 represent the cornerstone of Ethereum's token standards, each serving distinct purposes but together providing a comprehensive framework for digital assets. Whether it's the fungibility and broad applicability of ERC20, the uniqueness and individuality of ERC721, or the versatility and efficiency of ERC1155, these standards collectively enrich the blockchain ecosystem, enabling endless possibilities for developers, creators, and users alike.
It allows for both fungible and non-fungible tokens to coexist under a single contract.
With ERC1155, a token ID can represent a class of items (similar to ERC20's fungibility) or a unique item (akin to ERC721's non-fungibility), depending on the quantity associated with the ID. This flexibility is particularly beneficial for applications such as:
On-Chain Gaming:
Developers can utilize ERC1155 to create a diverse range of in-game assets, from common items (fungible) to rare or unique equipment (non-fungible), all within a single, efficient contract structure.
Asset Bundling:
It enables the bundling of multiple types of assets into a single transaction, reducing the cost and complexity of operations like transferring or selling multiple items.
In conclusion
ERC20, ERC721, and ERC1155 represent the cornerstone of Ethereum's token standards, each serving distinct purposes but together providing a comprehensive framework for digital assets. Whether it's the fungibility and broad applicability of ERC20, the uniqueness and individuality of ERC721, or the versatility and efficiency of ERC1155, these standards collectively enrich the blockchain ecosystem, enabling endless possibilities for developers, creators, and users alike.
