OGCommunity

  • Events
  • Contact us
  • Blog
Launch app
image_2024-08-10_10-45-13.png

Token Standarts Guide

Aug 10th, 2024 at 11:45

In the world of cryptocurrency, tokens hold a special place. They allow us to utilize various functions of blockchain platforms, participate in project governance, and even trade unique digital assets. But not all tokens are created equal. They differ in their standards, functionalities, and applications. This article will delve into the main token standards in the cryptocurrency space, exploring their differences and use cases.

Main Token Standards

In the blockchain realm, the most popular token standards include:

  1. ERC-20 (Ethereum Request for Comments 20):
    • Description: This is the standard for tokens operating on the Ethereum blockchain. ERC-20 defines a set of rules that all compliant tokens must follow, ensuring their compatibility with various platforms and wallets.
    • Examples: USDT (Tether), LINK (Chainlink).
  2. ERC-721:
    • Description: This standard is used to create unique tokens, known as NFTs (non-fungible tokens). Each ERC-721 token is unique and cannot be replaced by another identical token.
    • Examples: CryptoKitties, Decentraland (LAND).
  3. ERC-1155:
    • Description: A versatile standard that allows for the creation of both fungible (ERC-20) and non-fungible (ERC-721) tokens. This simplifies the management of different token types within a single smart contract.
    • Examples: Enjin Coin (ENJ).
  4. BEP-20:
    • Description: The standard for tokens on Binance Smart Chain (BSC), analogous to ERC-20. Ensures compatibility of tokens within the BSC ecosystem.
    • Examples: BUSD (Binance USD), CAKE (PancakeSwap).

Less Common Token Standards

  1. ERC-777:
    • Description: An improved version of the ERC-20 standard, providing more efficient and secure transactions, as well as the ability to send notifications.
    • The token is not widely used, but it is implemented in some specialized projects.
  2. SPL (Solana Program Library):
    • Description: The standard for tokens on the Solana blockchain, providing high speed and low transaction fees.
    • Examples: USDC (Solana), Serum (SRM).

Differences Between Token Standards

The main differences between these standards lie in their purpose and capabilities:

  • ERC-20 and BEP-20: Used to create fungible tokens that can be easily exchanged for other tokens of the same type. These tokens are suitable for creating cryptocurrencies, stablecoins, and other financial instruments.
  • ERC-721 and TRC-721: Designed for unique tokens (NFTs), where each token has its own value and cannot be exchanged for another. Such tokens are ideal for digital art, collectibles, and in-game assets.
  • ERC-1155: Combines the capabilities of both previous standards, allowing for the creation of both fungible and non-fungible tokens within a single smart contract. This is convenient for projects that require both types of tokens.
  • TRC-20 and SPL: Provide fast and cheap transactions, making them attractive for use in high-load decentralized applications.

Applications of Different Token Types

Tokens are applied in various areas:

  • Utility Tokens: These tokens provide access to services or products within a project's ecosystem. For example, tokens can be used to pay transaction fees, access a platform, or receive discounts.
    • Examples: BNB (Binance Coin), UNI (Uniswap).
  • Stablecoins: Tokens pegged to the value of traditional currencies, such as the US dollar. They provide price stability and are widely used for trading and storing value.
    • Examples: USDT (Tether), USDC (USD Coin).
  • NFTs: Unique tokens used to represent digital assets such as art, music, or game items.
    • Examples: CryptoPunks, Axie Infinity.
  • Governance Tokens: These tokens give holders the right to participate in project governance by voting on various proposals and changes.
    • Examples: MKR (Maker), COMP (Compound).

Tokens play a key role in the blockchain ecosystem, offering diverse functions and possibilities. Knowing different token standards and their applications helps users better navigate the world of cryptocurrencies and utilize their full potential. Whether you want to participate in project governance, invest in digital assets, or simply use the services of blockchain platforms, understanding tokens and their standards will open up new horizons.

#Token

Channel | Twitter | Discord | Linktr.ee | Blog | OGC App