Understanding Token Standards

Peace be up you my dear friends, how are you all? I hope that by God's grace and mercy you are all well. Today I'm here to try a very informative blog with you, so let's get started without wasting anytime.

In the dynamic sector of blockchain technologies and cryptographic currencies, the essence of tokens cannot be overlooked. They represent the virtual forms of the property or utilities which can be exchanged, hoarded, and moved within a blockchain while. To promote compatibility, security, and effectiveness, different token standards were put in place. So let’s discuss.

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ERC-20 – Ethereum’s Standard

ERC20 is a standard that everyone knows in the ethereum blockchain. It is the most popular token standard. This sets a fundamental set of basic five rules which are a prerequisite for any token using the Ethereum based infrastructure, thus enhancing ease of use and flexibility with dApps.

Key Features

Fungibility: Fungibility characteristics arise from the types of tokens under any ERC-20 smart contract as all those tokens are of the same type.

Basic Functions: The following basic functions are the most common EB-20 token contract, they must also include total Supply, balance Of(address), transfer(address, uint256), and approve(address, uint256), where all these issues deal with total balance, transfer or movement of tokens.

The Public’s General Acceptance of the Technology: The reason behind the ERC-20, every single ICO and dApps projects deployed in the Ethereum became mostly popular with this standard.

Use Cases

• Cryptocurrencies

• Utility tokens for accessing dApps.

• Governance token for decentralized companies.

ERC-721: The Non Fungible Token Standard

ERC-721 becomes the new kind in the list of Ethereum token standards. This standard of tokens have some rules for the non fungible tokens. NFTs are digital assets. They represents the ownership of a specific entity. This entity may be artworks, collectibles and virtual real estate, etc.

Key Features

Uniqueness: ERC-721 tokens have a unique identifier that is not common in any of the more than 726021 tokens available.

Ownership: ERC-721 have functions as ownerOf(uint256 tokenId). It keeps the records of owners of specifically issued ERC-721.

Transferability: There are also other ERC-721 functions that are involved in the transfer of ownership from one person to another like the transferFrom function.

Use Cases

• Digital Art and Collectibles ( e.g. CryptoKitties)

• Virtual Land/Assets in Games such as Decentraland

• Ownership certificate/representation of real-world assets.

Across the following sections of the paper, the authors analyze each of these token standards, trying to understand the simplicity or complexity of the whitepapers to implement these token standards or to create a chain.

ERC-1155: Multi-Token Standard

The node of this standard is the lowest in rank. The main advantage of this tokenizable general criterion culture is that fairness clarifies how to funnel head to address token use.

^{Image by Franck Barske from Pixabay}

Key Features

Multi-Token Support: Any token associated with an ERC-1155 contract can use, create or transfer any other token for which such an atmosphere exists.

Batch Operations: The ERC 1155 standard natively contains all requirements for the support of batch execution/processing of transactions that can be pain staking.

Flexibility: Such contracts can encapsulate a rather versatile range of assets including primary (fungible) currencies as well as secondary (non-fungible) collectibles.

Use Cases

• Tokens used in games (currencies, weapons and characters)

• More evolved dApps where some additional token is present

• Management of large amounts of token reserves

BEP-20: Binance Smart Chain Standard

The BEP-20 is an auxiliary token standard that enhances the functionality of the BEP-2 standard on the Binance smart chain as the ERC20 on Ethereum. It outlines how to mint a new token, send it to other users and service providers on BSC, and interact with user traffic.

Key Features

Compatibility: This makes it simpler to transfer token assets from the Ethereum blockchain to the Binance Smart Chain making use of the BEP-20 token's versatility.

Efficiency: The transaction fees are lowered in this case as BSC’s transactional volume is smaller When compared to Ethereum Blockchain.

TRC-20: Tron’s Token Standard

TRC-20 is one of the token standards on the blockchain of Tron, similar in spirit to the ERC-20 standard. It provides room for the existence of fungible tokens on the Tron network for instance data type, usage and transfer of tokens.

Key Features

Low Fees: As a result of Tron’s low transaction cost and high throughput, TRC-20 tokens become appealing to developers and users.

Interoperability: TRC-20 tokens can be supported on several DEXs and wallets in the Tron system.

Ease of Use: There are no special requirements regarding the technology; thus it is a common standard used in Tron dApps and tokens.

Use Cases

• Cryptocurrencies operating on Tron blockchain

• Functional tokens for Tron decentralized applications

• Decentralization and Engaging finance

Conclusion

We can agree to the fact that token standards reign in the blockchain ecosystem as they provide the framework for the existence and operation of digital assets. Most popular token standards include among others the predominant ERC-20 which handles fungible tokens, the specialized use ERC-721 restraints non-fungible tokens, and one token standard that supports a contract having multiple tokens known as an ERC-1155 token.

It is also anticipated that in the future or as the blockchain industry grows and develops, additional advancements among existing ones towards the challenge will continue to be made.

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@malikusman1