Token Standard

Token standards define how tokens behave. ERC-20 is Ethereum standard for fungible tokens. All ERC-20 tokens have same interface: approve, transfer, balanceOf. This standardization enables interoperability. Wallet supports ERC-20? Supports all ERC-20 tokens. DEX supports ERC-20? Works with all ERC-20 tokens. Standards reduce fragmentation. Without standards, every token different interface. Developers would need to support each individually. Standards enable ecosystem growth. Ethereum ERC-20 enabled ICO boom. Understanding token standards is important for blockchain development.

ERC-20 (Fungible Tokens)

Most common standard:

Fungible: All tokens identical. 1 USDC = 1 USDC.

Standard Functions:

transfer: Send tokens to address
approve: Allow address to spend tokens
transferFrom: Spend approved tokens

Optional Functions:

name, symbol, decimals: Metadata

Events:

Transfer: Emitted when tokens transferred
Approval: Emitted when allowance set

ERC-20 enables interoperable fungible tokens.

ERC-721 (Non-Fungible Tokens)

NFT standard:

Non-Fungible: Each token unique. Token ID 1 != Token ID 2.

Standard Functions:

transferFrom: Transfer specific NFT
approve: Approve address to transfer NFT
ownerOf: Get owner of token

Metadata: Can point to off-chain metadata (JSON).

Usage: Digital art, collectibles, domain names.

ERC-721 enables NFT ecosystem.

ERC-1155 (Multi-Token)

Multi-token standard:

Hybrid: Single contract manages fungible and non-fungible tokens.

Batch Operations: Transfer multiple tokens in one transaction (gas efficient).

Flexibility: Create fungible token, NFT, semi-fungible tokens in one contract.

Gaming: Well-suited for gaming (weapons, armor, etc).

ERC-1155 enables flexible token designs.

Stablecoin Standards

Special case:

ERC-20 Base: Most stablecoins are ERC-20 (USDC, USDT, DAI).

Special Features: Some add features like burnable (burn tokens), mintable (mint tokens), capped (max supply).

Peg Stability: Mechanisms to maintain $1 peg (collateralization, algorithms).

Trust Assumptions: Centralized stablecoins require trusting issuer.

Stablecoins use ERC-20 with extensions.

Cross-Chain Standards

Emerging standards:

Wrapped Tokens: Non-standard representation on different chain (WBTC on Ethereum = Bitcoin wrapped).

Cross-Chain Bridges: Different bridges have different standards.

Intent for Standardization: Need for unified cross-chain token standards.

Challenges: Different chains have different capabilities. Standardization difficult.

Cross-chain standards still emerging.

Token Standard Evolution

New proposals:

ERC-2612: Permit extension enabling approvals without separate transaction.

ERC-4626: Vault standard. Standardized yield-bearing token interface.

ERC-721R: Refundable NFTs (can return for refund).

ERC-5095: Principal tokens and yield tokens.

Token standards constantly evolving.

Career Opportunities

Token standards create roles:

Protocol Designers designing standards earn $130,000-$320,000+.

Smart Contract Developers implementing standards earn $120,000-$300,000+.

Standards Researchers improving standards earn $120,000-$300,000+.

Interoperability Engineers enabling cross-standard compatibility earn $130,000-$320,000+.

Best Practices

Using token standards:

Follow Standards: Use established standards when possible.

Extensions: Only add extensions when necessary.

Documentation: Document non-standard behavior.

Testing: Thoroughly test standard compliance.

Audits: Audit non-standard behavior carefully.

The Future of Token Standards

Evolution:

Unified Standards: Cross-chain token standard.

New Use Cases: Standards for new token types.

Efficiency: More gas-efficient standards.

Privacy: Privacy-preserving token standards.

Enable Interoperable Tokens

Token standards enable ecosystem interoperability. Critical for blockchain ecosystem. Understanding standards is essential for developers. If you're interested in token development, explore development careers at protocol teams. These roles focus on building token infrastructure.