It is common knowledge by now that the cryptocurrency market consists of various kinds of digital tokens. These tokens are developed on top of blockchain protocols and follow a set of rules called ‘token standards’.
Normally, these standards define how specific tokens can be transferred and how to retain a consistent record of these transfers on the relevant blockchain. Furthermore, token standards ensure the compatibility of tokens with existing decentralized exchanges, wallets, and so on.
But which blockchain network has what token standard and what does this standard mean? Let’s find out.
What ERC stands for?
Ethereum (ETH) is the most commonly used blockchain for creating smart contracts. These are programs or collections of code and data that run on the Ethereum blockchain and are used to create and deploy tokenized assets.
Today, there are several kinds of the ERC or ‘Ethereum Request for Comment’ standards for supporting various types of smart contracts. These include ERC-20, ERC-721, ERC-777, and ERC-1155.
The original token standard, ERC-20 is also still the most widespread, making the tokens that use it compatible with any project on the Ethereum network and any Ethereum-based wallet. It is the standard interface for fungible tokens on the Ethereum blockchain, including virtual currencies, staking tokens, and voting tokens.
Meanwhile, the boom of non-fungible tokens (NFTs) has brought to the limelight another token standard: ERC-721. It provides functionalities for tracking unique digital assets, like deeds for artwork or songs, and demonstrating individual ownership over them.
Although not as common as the above token standards, ERC-777 is nonetheless an important addition to the ecosystem, as it introduces advanced functionalities on top of tokens, such as mixer contracts for improved transaction privacy, emergency recovery function (if you lose your private keys), and backward compatibility with ERC-20.
Also called the multi-token standard, ERC-1155 focuses on managing collections of fungible and non-fungible crypto assets in a single contract, allowing simultaneous transfers of multiple token variants; thus, facilitating more efficient trades and saving costs.
What is BEP-20 on Binance Smart Chain?
The increased crypto adoption has also given rise to token standards on blockchains other than Ethereum.
One of them is the BEP-20 token standard which is built on Binance Smart Chain (BSC). Similar to ERC-20, the BEP-20 facilitates the deployment of fungible cryptocurrencies on BSC, just like the ERC-20 standard does for fungible tokens on the Ethereum blockchain.
It also allows the transfer of assets from other blockchains in the form of pegged BEP-20 tokens through the Binance Bridge. ‘BEP’ is short for ‘Binance Smart Chain Evolution Proposal’.
Tezos FA1.2 and FA2 token standards explained
Tezos (XTZ) is another blockchain with its own token standards, offering FA1.2 and FA2 token standards, with ‘FA’ standing for ‘Financial Application’. The FA1.2 is similar in functionality to ERC-20 and BEP-20 and only supports fungible tokens.
On the other hand, FA2 has extended the previous standard in functionality and support. It is independent of the token type and supports a wide range of them, including fungible, non-fungible, non-transferable, and multi-asset via a single standard.