Token Standard: ERC20, ERC721
Blockchain-defined standards that ensure consistency, interoperability, and functionality for tokens, with ERC20 for fungible and ERC721 for non-fungible tokens.
What is Token Standard?
Token standard is defined on a blockchain, typically Ethereum, to ensure consistency, interoperability, and functionality for tokens created on the network.
ERC20 (Ethereum Request for Comment 20) is the most widely adopted token standard, introduced in 2015, governing fungible tokens—interchangeable assets like USDT or governance tokens. It defines functions like transfer, balance tracking, and total supply, enabling seamless integration with wallets, exchanges, and decentralized applications (dApps).
ERC721, introduced in 2018, is the standard for non-fungible tokens (NFTs), representing unique, indivisible assets like digital art, collectibles, or tokenized real-world assets (RWAs).
These standards, built on Ethereum’s blockchain, ensure tokens are secure, interoperable, and compatible with decentralized finance (DeFi) and other ecosystems, powering billions in transactions. Other standards, like ERC1155, combine fungible and non-fungible features, but ERC20 and ERC721 remain foundational to Ethereum’s token economy.
Related Terms
Blockchain Trilemma
The blockchain trilemma refers to the challenge of balancing three core properties—decentralization, security, and scalability—in a blockchain network, where optimizing one often compromises the others.
Ether (ETH)
Ether(ETH) is the native digital asset of the Ethereum blockchain, used to pay for transaction fees and computational services.
Merkle Tree
A binary tree data structure used to efficiently verify and summarize large sets of data, such as transactions in a blockchain.
Solana Account
A digital wallet address on the Solana blockchain used to hold, send, and receive SOL and other SPL tokens, secured by a private key.
Liquidation
The process in DeFi where assets from an under-collateralized loan are sold to repay the borrowed amount, typically triggered automatically by smart contracts when collateral value falls below a required threshold.
OP Mainnet
Optimism's optimistic rollup network for Ethereum, delivering low-cost, high-speed transactions.