What Are Token Standards? And What Are the Different Types?

by Oct 24, 2023Blockchain Technology0 comments

In the world of blockchain, tokens are digital assets that represent a certain value or utility. These tokens are created and traded on various blockchain networks, such as Ethereum, Binance Smart Chain, and more. Token standards are rules and guidelines that define how tokens should be created and interacted with on a particular blockchain. In this article, we will explore the most popular token standards and their significance in the blockchain ecosystem.

What Are Token Standards?

Token standards are a set of rules and guidelines that define how tokens should be created and interacted with on a particular blockchain. These standards ensure that tokens are created and operated consistently, making it easier for developers to build applications that interact with these tokens.

Token standards define the basic features of tokens, including how they are created, transferred, and destroyed. They also define additional features, such as token supply, decimals, and symbols, which help to provide more context about the token.

Token standards have become increasingly important as blockchain technology has grown in popularity. They have become a key part of the blockchain ecosystem, and many blockchain networks have developed their own token standards to meet the unique needs of their platform.

What Are Token Standards?

Why Are Token Standards Important?

Token standards are important because they provide a consistent framework for the creation and operation of tokens on a particular blockchain. This consistency makes it easier for developers to build applications that interact with these tokens, as they do not have to worry about the specifics of each individual token.

Token standards also make it easier for users to interact with tokens, as they know what to expect when using a token that adheres to a particular standard. This creates a more seamless user experience and helps to increase the adoption of blockchain technology.

The use of token standards has also helped to create a more robust and interoperable blockchain ecosystem. Developers can build applications that interact with multiple tokens across multiple blockchain networks, which increases the utility and value of these tokens.

Types of Token Standards

Token StandardDescriptionKey Features
ERC-20Standard for implementing tokens on the Ethereum blockchain– Fungible tokens
– Transfer and balance functions
– Widely used in the Ethereum ecosystem
ERC-721Standard for creating non-fungible tokens (NFTs) on Ethereum– Unique and indivisible tokens
– Track ownership and transfer
– Customizable attributes and properties
BEP-20Token standard on the Binance Smart Chain (BSC)– Fungible tokens on BSC<be>
– Compatible with Ethereum tools
– Faster and cheaper transactions compared to Ethereum
TRC-20Token standard on the Tron blockchain– Fungible tokens on Tron<be>
– Compatible with Tron Virtual Machine (TVM)
– Fast and low-cost transactions on Tron
SPLSolana Program Library for creating dApps on Solana– Collection of on-chain programs
– NFT creation and management
– Smart contract execution using Rust programming language

1. ERC-20

ERC-20

ERC-20 stands for “Ethereum Request for Comment 20”, which is a technical standard used for the implementation of tokens on the Ethereum blockchain. This standard defines a set of rules and functions that an Ethereum token must follow in order to be considered an ERC-20 token.

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ERC-20 tokens are fungible, meaning that they are interchangeable and have the same value. They can represent any asset or utility and can be used for a wide range of purposes such as digital currencies, loyalty points, or even voting rights. The standard defines a set of functions that allow users to transfer tokens between each other, check the balance of tokens in an account, and approve other accounts to spend tokens on their behalf.

Many of the most popular tokens on the Ethereum blockchain are ERC-20 tokens, such as the stablecoin USDC (USD Coin) and the governance token of the decentralized finance (DeFi) platform Uniswap, UNI. The ERC-20 standard has played a key role in the growth of the Ethereum ecosystem, enabling the creation of a vast array of token-based applications and services.

2. ERC-721

ERC-721

ERC-721 is a standard for creating non-fungible tokens (NFTs) on the Ethereum blockchain. It was introduced in early 2018 as an improvement over the earlier ERC-20 standard, which is used for creating fungible tokens.

NFTs are unique digital assets that can represent anything from digital art and music to in-game items and collectibles. Each NFT is one-of-a-kind and cannot be exchanged on a one-to-one basis with another NFT. This is in contrast to fungible tokens, like Bitcoin or Ether, which are identical to each other and can be exchanged for each other.

ERC-721 defines a set of rules and functions that allow developers to create and manage NFTs on the Ethereum blockchain. Each NFT created using the ERC-721 standard has a unique identifier that distinguishes it from all other NFTs on the network. This makes it possible to track ownership and transfer of NFTs, as well as to create marketplaces where users can buy and sell them.

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One of the key benefits of ERC-721 is that it allows for greater flexibility in the design of NFTs. Developers can create NFTs with custom attributes and properties, making them suitable for a wide range of use cases. For example, an NFT could represent a unique character in a game, with its own set of abilities and attributes.

3. BEP-20

BEP-20

BEP-20 is a token standard on the Binance Smart Chain (BSC), which is a blockchain network that was launched by the Binance cryptocurrency exchange in 2020. BEP-20 is similar in function to the ERC-20 standard on the Ethereum blockchain, as it enables the creation and management of fungible tokens.

Fungible tokens are identical to each other and can be exchanged on a one-to-one basis. BEP-20 tokens can represent any type of asset or utility, such as stablecoins, loyalty points, and voting rights.

BEP-20 is an extension of the BEP-2 token standard, which was originally created for the Binance Chain. However, unlike BEP-2 tokens, BEP-20 tokens are compatible with the Ethereum Virtual Machine (EVM), which means that developers can use existing Ethereum tools and libraries to create BEP-20 tokens.

The BEP-20 standard defines a set of rules and functions that enable the creation and management of tokens on the Binance Smart Chain. These functions include the ability to transfer tokens between addresses, check the balance of tokens in an account, and approve third-party addresses to spend tokens on behalf of an account.

One of the key benefits of the Binance Smart Chain and the BEP-20 standard is that it offers faster and cheaper transactions compared to the Ethereum network, while still retaining compatibility with the Ethereum ecosystem. This makes it an attractive option for developers looking to create decentralized applications (dApps) and tokens on a scalable blockchain platform.

4. TRC-20

TRC-20

TRC-20 is a technical standard used on the Tron blockchain for the creation and management of tokens. It is similar in function to other token standards such as ERC-20 on Ethereum and BEP-20 on Binance Smart Chain.

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TRC-20 tokens are used to represent any type of asset or utility on the Tron network, such as stablecoins, loyalty points, and voting rights. These tokens can be used in a variety of applications and services built on top of the Tron blockchain.

The TRC-20 standard was introduced in 2019 and is based on the same technology as the Ethereum ERC-20 standard. TRC-20 tokens are fully compatible with the Tron Virtual Machine (TVM), which is a platform that enables the execution of smart contracts on the Tron network.

The TRC-20 standard defines a set of rules and functions that enable the creation and management of tokens on the Tron network. These functions include the ability to transfer tokens between addresses, check the balance of tokens in an account, and approve third-party addresses to spend tokens on behalf of an account.

One of the key benefits of TRC-20 tokens is that they offer fast and low-cost transactions on the Tron network, which makes them an attractive option for developers looking to create decentralized applications and tokens on a scalable blockchain platform.

Overall, the TRC-20 standard has played an important role in the growth and development of the Tron ecosystem, enabling new and innovative use cases for blockchain technology.

5. SPL

SPL

SPL, or the Solana Program Library, is a collection of on-chain programs and smart contracts that are used to create decentralized applications (dApps) on the Solana blockchain. It is similar in function to other smart contract platforms such as Ethereum and Binance Smart Chain.

SPL is designed to provide developers with a robust set of tools and libraries for building decentralized applications on the Solana blockchain. It includes various features, such as token creation and management, cross-chain interoperability, and smart contract execution.

One of the key features of SPL is its support for the creation and management of non-fungible tokens (NFTs) using the SPL Token program. This program enables the creation of unique digital assets that can represent anything from digital art and music to in-game items and collectibles.

Another important program in SPL is the Solana Smart Contract program, which enables the execution of smart contracts on the Solana blockchain. This program uses a programming language called Rust, which is known for its speed and security, making it an ideal choice for building high-performance dApps on the Solana network.

Conclusion

Token standards are a crucial component of the blockchain ecosystem. They provide a consistent framework for the creation and operation of tokens on a particular blockchain, which makes it easier for developers to build applications that interact with these tokens. Token standards also make it easier for users to interact with tokens, which creates a more seamless user experience and helps to increase adoption of blockchain technology.

ERC-20 is the most popular token standard, but there are many other token standards, such as ERC-721, BEP-20, TRC-20, and SPL, which are tailored to specific blockchain networks. As blockchain technology continues to evolve, we can expect to see new token standards emerge to meet the unique needs of this rapidly growing industry.

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