What are Token Standards in Blockchain?
Token standards are essential protocols within blockchain technology that define the rules and specifications for creating and managing tokens on a blockchain network. These standards ensure interoperability and compatibility within the ecosystem, allowing different tokens to function seamlessly with various wallets, platforms, and decentralized applications (dApps).
Prominent token standards include:
- ERC-20: The most widely used token standard on the Ethereum blockchain, which allows for the creation of fungible tokens. ERC-20 tokens share a common set of functions, enabling developers to build a diverse range of decentralized applications.
- ERC-721: This standard is used for non-fungible tokens (NFTs), allowing for the creation of unique digital assets. Each ERC-721 token is distinct and can represent ownership of a specific item or artwork.
- ERC-1155: A more advanced standard that supports both fungible and non-fungible tokens within a single contract. This provides greater efficiency and versatility for developers.
In summary, token standards are crucial for the development of decentralized ecosystems, offering guidelines for token creation, ensuring security, and facilitating the interaction between different blockchain applications.