Token Standard 

A token standard defines a set of rules and protocols that govern how tokens operate on a blockchain. These standards ensure compatibility and interoperability among different tokens and platforms. They provide a blueprint for developers to create and manage tokens, enabling seamless interaction within the blockchain ecosystem.

Ethereum, one of the largest and most influential blockchains, pioneered the concept of smart contracts, which are self-executing contracts with the terms of the agreement directly written into code. This innovation has led to the development of numerous token standards on Ethereum, facilitating diverse and robust applications.

While Ethereum hosts many token standards due to its smart contract capabilities, other blockchains also have multiple token standards. For example, blockchains like Tezos and Polkadot have their own token standards tailored to their unique ecosystems. These standards enable the creation and management of tokens, ensuring interoperability and security across different blockchain networks.

Common blockchain token standards

Several token standards exist across various blockchain platforms. The most widely recognized ones are ERC-20, ERC-721, and ERC-1155, primarily used on the Ethereum blockchain. 

ERC-20 

The ERC-20 standard is one of the most popular and widely used token standards. It defines a set of functions that all ERC-20 tokens must implement, ensuring consistency across the Ethereum network. ERC-20 tokens are fungible, meaning each token is identical and interchangeable with another. This standard is commonly used for creating cryptocurrencies and utility tokens.

For instance, ERC-20 includes functions such as ‘’totalSupply’’, which returns the total supply of tokens, and ‘’balanceOf’’, which provides the token balance of a specific address. Additionally, functions like ‘’transfer’’ and ‘’approve’’ facilitate the movement of tokens between addresses and allow a spender to withdraw tokens from an account, respectively. The ‘’transferFrom’’ function enables the transfer of tokens from a specified address, ensuring smooth transactions within the network. The uniformity provided by the ERC-20 standard simplifies integration and interaction with various applications and exchanges.

ERC-721

The ERC-721 standard defines non-fungible tokens (NFTs). Unlike ERC-20 tokens, ERC-721 tokens are unique and cannot be exchanged on a one-to-one basis. Each token has distinct attributes, making them suitable for representing ownership of unique items like digital art, collectibles, and real estate.

Key functions of ERC-721 include ‘’ownerOf’’, which identifies the owner of a specific token, and ‘’approve’’, which grants approval to transfer a token to another address. The ‘’transferFrom’’ function allows for the transfer of ownership of a token from one address to another, while ‘’safeTransferFrom’’ ensures the secure transfer of tokens, checking if the recipient can handle ERC-721 tokens. These features make ERC-721 ideal for applications that require the representation of unique assets, providing a standardized approach to managing and trading NFTs on the Ethereum blockchain.

ERC-1155

The ERC-1155 standard combines the features of both ERC-20 and ERC-721, allowing for the creation of fungible and non-fungible tokens within a single contract. This versatility reduces the need for multiple contracts, saving time and reducing complexity. ERC-1155 tokens are used in various applications, including gaming and digital asset management.

Notable functions of ERC-1155 include ‘’safeTransferFrom’’, which ensures the secure transfer of tokens and verifies the recipient's compatibility, and ‘’balanceOfBatch’’, which retrieves balances of multiple token types for a specific address. Additionally, the ‘’batchTransfer’’ function allows for the transfer of multiple tokens in a single transaction. By combining fungibility and non-fungibility, ERC-1155 provides a more flexible and efficient way to manage a diverse array of digital assets within a single contract, making it highly suitable for dynamic applications such as in-game assets and digital collectibles.

Final thoughts

Token standards are essential for the smooth functioning of blockchain networks. ERC-20, ERC-721, and ERC-1155 are key standards on the Ethereum blockchain, each serving different purposes. By following these standards, developers can ensure their tokens are compatible, secure, and efficient, contributing to a robust and interconnected blockchain environment. 

Many more token standards exist beyond these common ones. For example, ERC-777 enhances the functionality of ERC-20 with advanced features, and ERC-1400 is designed for security tokens to ensure regulatory compliance. These additional standards address specific needs and further enrich the blockchain ecosystem.