Ethereum Token Standards
There are many different possible ways of creating and structuring a token. What is ERC, ERC 20, ERC 721, ERC 884 and more.
You might have seen the phrase ‘ERC-20’ when reading about Ethereum tokens. This refers to a particular standard for tokens, which is the most common and widely-used on the Ethereum platform. This widespread usage is the reason that TIME itself is an ERC-20 token, and why the ChronoWallet supports the same standard (you can create and manage any ERC-20 token using our software). Most exchanges and other wallet platforms support this standard too. However, other standards have been proposed, and there are many different possible ways of creating and structuring a token.
What is ERC?
ERC stands for Ethereum Request for Comments. This idea is modelled on the Requests for Comments published by the Internet Engineering Task Force (IETF) and the Internet Society (ISOC), which are the main technical development and standards-setting bodies for the internet. An ERC is a type of EIP, or Ethereum Improvement Proposal. Just like the Bitcoin Improvement Proposals (BIPs), only a few of these are actually implemented.
ERC stands for Ethereum Request for Comments
To meet the ERC-20 token standard, an Ethereum token has to include a specific set of functions that means they act and can be used in a certain way. Arguably these are little more than common sense, since without them it would be far more complex to deploy and manage tokens. But codifying these principles allows other applications and smart contracts to interact with ERC-20 tokens in a known, standard and predictable way.
ChronoBank’s flagship token, TIME, is an ERC-20 token, and all of the largest ICOs on Ethereum have also released ERC-20 tokens. However, ERC-20 isn’t perfect, and there’s always room for improvement.
New standards for tokens are proposed all the time. These are carefully considered by developers and the community. Due to the importance of maintaining compatibility and the disruption of introducing new standards, only a few make it further than the proposal stage, but there are some it’s worth knowing about.
- ERC-223. This proposal seeks to fix the problem that ERC-20 tokens become stuck when sent to a smart contract that is not intended to work with ERC-20 tokens. Significant funds have been lost when users have accidentally sent tokens to such a contract.
- ERC-721. Most tokens are ‘fungible’ — that is, every token is the same as another. Fungibility is an important principle of monetary supply — every $10 bill needs to be treated the same (and considered as valuable as) any other, for example. ERC-721 proposes a token standard whereby tokens are not fungible: they are each unique. One of the most well-known implementations of this standard is the CryptoKitties game, which features unique, collectible cats. The Cryptocup World Cup game also uses this feature.
- ERC-827. ERC-20 tokens allow the transfer of value only. ERC-827 allows the transfer of value and data. Additionally, third parties can approve spending of tokens. The creators of ERC-827 have taken pains to keep their code brief and to maintain full compatibility with ERC-20 tokens.
- ERC-948. This proposal is designed to connect subscription businesses with consumers. Subscription-model businesses are booming, particularly in sectors such as streaming media (e.g. Netflix). As more and more businesses start to use the blockchain, it will be important to support subscriptions on Ethereum and other platforms. Doing so under the ERC-20 standard would be complex and entail unnecessary frictions for the consumer.
- ERC-884. Following a recent Bill, Delaware General Corporation Law now explicitly allows for the use of blockchains in maintaining corporate share registries. ERC-884 is designed to represent equity issued by any Delaware corporation, whether private or public, and includes several provisions over and above ERC-20 that support this use case. These include the requirement for token owners to be whitelisted/identity verified as an integral part of the token.
These are just some of the many proposals for Ethereum token standards. The beauty of a decentralised system is that anyone can make an improvement proposal and have it considered by the community.
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TIME is trading on the following exchanges: https://coinmarketcap.com/asse...