Understanding token standards
In Chapter 5, Deep Research and Latest Developments in Ethereum, we delved into the ERC-20 and ERC-721 token standards. ERC-20 is the predominant technical standard on the Ethereum blockchain for issuing tokens, which function as an interchangeable digital currency. Before the ERC token standard, numerous Initial Coin Offerings (ICOs), start-ups, and Decentralized Applications (DApps) created their tokens with many different standards. Since the release of the ERC-20 standard, things have changed and become much more streamlined.
The benefits of ERC-20 tokens include the following:
- Reducing the risk of contracts breaking
- Reducing the complexity of token interactions
- Allowing for lots of different use cases to emerge on top of these standards
- Uniform and quicker transactions
- Confirming transactions more efficiently
- Enhancing token liquidity
However, ERC-20 tokens do not have built-in regulatory limitations by design...
