Ethereum Standards: ERC-20, ERC-721, and ERC-1155: Uses and Differences
- ERC-20: This standard defines the rules for creating fungible tokens on the Ethereum network. Fungible tokens are interchangeable and have the same value, making them primarily used to represent currencies and utility tokens on the network. Some of the most well-known tokens on the Ethereum network are SHIB by Shiba Inu, SAND from The Sandbox metaverse, and the stablecoin DAI.
- ERC-721: This standard defines the rules for creating non-fungible tokens (NFTs) on the Ethereum network. Non-fungible tokens are unique and non-interchangeable, making them an ideal option for representing digital assets such as artworks, collections, and in-game items.
- ERC-1155: This standard is an enhanced version of ERC-721 and allows for the creation of hybrid tokens that can be both fungible and non-fungible. Hybrid tokens are primarily used in games and collectible applications where different types of tokens are needed for different uses.
Each of these standards has its own rules and technical specifications that must be followed to ensure interoperability and compatibility between different tokens and smart contracts on the Ethereum network. These standards have enabled the development of a wide variety of tokens and applications on the network, which has fueled the growth and adoption of blockchain technology.