Discover Popular Token Standards in the World of Blockchain
Token standards are rules and regulations for creating, applying, and transferring digital assets or tokens on the blockchain network.
The objectives are to define the features and functions that tokens should possess, such as the definition and restriction of the number of assets, the transfer and interoperability of the platforms, and wallets.
Token standards are also a component of blockchain's smart contract standards, which support smart contracts. Ethereum is a major provider of smart contract-compatible token standards on the blockchain.
Token Standards in Each Form
Today's popular token standards come in a variety of forms, including ERC-20, ERC-721, ERC-777, and ERC-1155. These are the specifics for each token.
The ERC-20 token standard is used to create assets that adhere to standardized rules that are fungible and similar. As a result, if you produce 1,000 units of ERC-20, each one will perform the same tasks. ERC-20 is frequently used to transfer assets and has gained a lot of popularity. For example, Fabian Vogelsteller, a co-founder of Lukso, proposed ERC-20, which is primarily used by Ethereum, in 2015.
The ERC-721 standard is used to create non-fungible tokens, or NFTs. Due to its specialized nature, this type of token cannot be exchanged. Then, people who work in the art industry typically prefer to produce their own artwork, which is why NFT art is so prevalent. It is used in the creation of tools and items for GameFi in the gaming industry. The smart contract for Ethereum supports this kind of token as well.
To address the ERC-20 token's restriction, ERC-77 was developed. The token process, including its transfer and receipt, is carried out using a mechanism called "Hooks," a feature that combines all possible methods, including token transfer and smart contract notification. Additionally, ERC-77 has a further feature for rejecting transactions that are on the blacklist. It is possible to freely exchange both ERC-777 and ERC-20 tokens because they adhere to the same standards.
Enjin used ERC-1155, a standard for making digital tokens, for the first time to conduct an exchange in games. It focuses on fungibility-independent management of tokens, which can generate a large number of digital tokens in a single token without generating them one at a time. It also permits the transfer of multiple assets under one smart contract, which can significantly reduce transfer fees.
Besides, the token standards are offered in a wide variety of forms that are not supported by the Ethereum blockchain, including TRC-1 on the Tron network and BEP-20 on the Binance Smart Chain. In short, every blockchain has a token standard on its blockchain network that was developed for various purposes. Most of them, though, place a strong emphasis on the exchange of digital assets on their networks for a number of reasons.