What is ERC for Ethereum?
ERC is an acronym for Ethereum Request for Comments. It’s like technical documents that define the methods, behaviors, innovation, and research applicable to a group of developers and users who want to utilize the Ethereum ecosystem.
To easily understand ERC, think of an engineering task force that conveys technical notes and rules to the developers that everyone needs to comply with if they want to leverage the benefits of a particular ecosystem.
What are ERC token standards?
ERC token standards explain certain rules for all the ERC tokens built on the Ethereum blockchain. Ethereum’s community duly reviews this set of rules, and amendments are done based on the changing requirements. Moreover, ERC standards are designed to allow ERC tokens to interact seamlessly.
ERC-20, ERC-721, and ERC-1155 appear as the three popular ERC token standards or protocols that have their applications across major industries. The Ethereum community fully approves these token standards, and they differ in terms of specific features and functionalities.
ERC-20 token standards
ERC-20 was first proposed in 2015, and it was finally integrated into the Ethereum ecosystem two years later in 2017. ERC-20 introduces the token standard for creating fungible tokens on the Ethereum blockchain. Simply put, ERC-20 consists of properties that support the development of identical tokens.
Characteristics of ERC-20 tokens
- ERC 20 tokens are another name for ”fungible tokens”.
- Fungibility defines the ability of an asset or Token to be exchanged for assets of the same value, say two 1 dollar notes.
- Each ERC-20 Token is strictly equivalent to the same value regardless of its feature and structure.
- ERC tokens’ most popular application areas are Stablecoins, governance tokens, and ICOs.
ERC-721: Non- fungible tokens
To understand the ERC-721 standards, you must first understand NFTs (non-fungible tokens).
The founder and CTO of Crypto Kitties (the widespread non-fungible tokens), Dieter Shirley, initially proposed developing a new token type to support NFTs. The proposal for approval later in 2018. It’s specialized in NFTs, which means a token developed abiding by the rules of ERC-721 can represent the value of any digital asset that lives on the Ethereum blockchain.
Characteristics of ERC-721 tokens
- ERC-721 tokens are the standards for non-fungible tokens (NFTs).
- These tokens can’t be exchanged for anything of equal value since they are one-of-a-kind.
- Each ERC-721 represents the value of the respective NFT, which may differ.
- The most popular application areas of ERC-721 tokens are NFTs in gaming.
ERC-1155: Multi-token Standard
Combining the abilities of ERC-20 and ERC-720, Witek Radomski (the Enjin’s CTO) introduced an all-inclusive token standard for the Ethereum smart contracts. It’s a standard interface that supports the development of fungible, semi-fungible, non-fungible tokens and other configurations with a common smart contract.
Characteristics of ERC-1155 tokens
- ERC-1155 is a smart contract interface representing fungible, semi-fungible, and non-fungible tokens.
- ERC-1155 can perform the function of ERC-20 and ERC-720 and even both simultaneously.
- Each Token can represent a different value based on the nature of the token; fungible, semi-fungible, or non-fungible.
- ERC-1155 is applicable for creating NFTs, redeemable shopping vouchers, ICOs, and so on.