Understanding Ethereum‘s Standards: ERC-20, ERC-721, and Beyond5

Ethereum, the second-largest cryptocurrency by market capitalization, isn't just a digital currency; it's a programmable blockchain platform that facilitates the creation and execution of decentralized applications (dApps). A key component of Ethereum's success and widespread adoption lies in its robust system of standards, most notably ERC-20 and ERC-721. These standards, developed by the community, define how tokens and non-fungible tokens (NFTs) interact within the Ethereum ecosystem, fostering interoperability and ease of development.

This article delves into the intricacies of Ethereum standards, focusing primarily on the prevalent ERC-20 and ERC-721, while briefly touching upon others. We will explore their functionalities, benefits, limitations, and their impact on the burgeoning DeFi (Decentralized Finance) and NFT landscapes.

ERC-20: The Foundation of Ethereum Tokens

ERC-20 is arguably the most widely adopted token standard on Ethereum. It defines a set of rules for creating fungible tokens, meaning tokens that are interchangeable with one another. Think of ERC-20 tokens as standardized digital representations of value, similar to how fiat currencies operate. These tokens are readily transferable and can be used within various decentralized applications, providing a foundation for many DeFi protocols.

Key characteristics of ERC-20 tokens include:
Transferability: ERC-20 tokens can be easily transferred between addresses.
Balance tracking: The standard provides a mechanism for tracking the balance of each address.
Total supply: The total number of tokens in circulation is defined at the time of creation.
Approvals: Users can grant other addresses permission to spend their tokens.
Interoperability: This standardization allows for seamless integration with various decentralized exchanges (DEXs) and wallets.

The popularity of ERC-20 stems from its simplicity and ease of integration. This has led to a proliferation of ERC-20 tokens, ranging from utility tokens used within dApps to security tokens representing ownership in a company. However, the ease of creating ERC-20 tokens has also led to concerns around the potential for scams and low-quality projects.

ERC-721: The Genesis of Non-Fungible Tokens (NFTs)

Unlike ERC-20 tokens, ERC-721 defines a standard for non-fungible tokens (NFTs). NFTs are unique, indivisible tokens, each representing a distinct digital or physical asset. This uniqueness contrasts sharply with the fungibility of ERC-20 tokens. The ERC-721 standard allows for the creation and management of unique digital collectibles, art, game items, and other digital assets.

Key features of ERC-721 tokens are:
Uniqueness: Each token is unique and cannot be exchanged for another.
Ownership tracking: The standard meticulously tracks the ownership history of each NFT.
Metadata: ERC-721 supports metadata, enabling the inclusion of information about the NFT, such as its description, image, and other attributes.
Transferability: NFTs can be transferred between addresses, similar to ERC-20 tokens.
Interoperability: The standard facilitates integration with NFT marketplaces and other dApps.

The ERC-721 standard has revolutionized the digital art and collectibles space, enabling the creation of thriving NFT marketplaces and communities. However, the growing popularity of NFTs has also brought challenges, including scalability issues, environmental concerns related to high energy consumption, and the potential for fraud and speculation.

Beyond ERC-20 and ERC-721: Other Ethereum Standards

While ERC-20 and ERC-721 are the most prominent Ethereum standards, several others address specific functionalities and use cases. These include:
ERC-1155: This standard combines the functionalities of ERC-20 and ERC-721, allowing for the creation of both fungible and non-fungible tokens within a single contract. This improves efficiency and reduces gas costs.
ERC-777: This standard aims to improve the functionality of ERC-20 tokens by adding features such as token operators and more granular control over token transfers.
ERC-165: This standard allows contracts to declare their supported interfaces, enhancing interoperability and preventing unexpected behavior.

The continuous development of new Ethereum standards reflects the platform's adaptability and its capacity to meet the evolving needs of the decentralized ecosystem.

Conclusion

Ethereum's standards, particularly ERC-20 and ERC-721, are fundamental to the platform's success. They provide a structured framework for building and deploying various decentralized applications, fostering innovation and driving the growth of DeFi and the NFT marketplace. While challenges remain, the ongoing development and adoption of these standards solidify Ethereum's position as a leading platform for blockchain innovation. Understanding these standards is crucial for anyone seeking to navigate the complex yet exciting world of Ethereum.

2025-06-20

Previous：Bitcoin‘s Meteoric Rise: Early Price Increases and the Factors Behind Them

Next：Lost Bitcoin: Strategies for Recovering Forgotten Cryptocurrency