Differences Between Ethereum Tokens
ERC-20 Tokens
ERC-20 is a standard for creating tokens on the Ethereum blockchain. These tokens are fungible, meaning they can be exchanged on a one-to-one basis with one another. Popular examples include USDT (Tether) and LINK (Chainlink). Their interoperability allows seamless interaction with decentralized applications (dApps) within the Ethereum ecosystem.
ERC-721 Tokens
Unlike ERC-20, ERC-721 tokens are non-fungible tokens (NFTs) that represent unique assets. This means each token has distinct characteristics, making them ideal for digital art, collectibles, and gaming. Popular examples include CryptoKitties and various digital art pieces sold on platforms like OpenSea.
ERC-1155 Tokens
ERC-1155 is an advanced token standard that allows the creation of both fungible and non-fungible tokens within a single contract. This multi-token approach significantly enhances efficiency, reducing the transaction costs and complexity associated with deploying multiple contracts for different token types.
Use Cases
Ethereum tokens serve various purposes based on their type. ERC-20 tokens predominantly facilitate transactions and provide utility within dApps, while ERC-721 and ERC-1155 tokens enable ownership and trading of unique digital assets. This diversity contributes to Ethereum's substantial role as a platform in the DeFi and NFT markets.