Ethereum Request for Comments (ERC) standards form the backbone of innovation and interoperability on the Ethereum blockchain. These technical blueprints empower developers to build tokens and decentralized applications (dApps) with predictable behavior, seamless integration, and broad compatibility across wallets, exchanges, and platforms. From fungible utility tokens to unique digital collectibles and next-generation yield vaults, ERC standards shape how value is created, transferred, and managed in Web3.
This comprehensive guide explores the most influential ERC token standards, their unique features, real-world applications, and the evolving landscape of tokenization on Ethereum. Whether you're a developer, investor, or blockchain enthusiast, understanding these standards is essential to navigating the decentralized economy.
What Are ERC Standards?
ERC stands for Ethereum Request for Comments—a formal process for proposing improvements and technical specifications to the Ethereum ecosystem. Think of ERCs as community-vetted templates that define how smart contracts should behave when issuing or managing tokens.
These standards ensure consistency across applications. For example, if a wallet supports the ERC-20 standard, it can automatically recognize and interact with any token built using that framework—no custom coding required.
Key benefits include:
- Interoperability: Tokens work seamlessly across dApps, exchanges, and tools.
- Security: Standardized code reduces vulnerabilities from ad-hoc implementations.
- Developer Efficiency: Predefined functions accelerate development time.
While over 50 ERCs exist today, only a handful have achieved widespread adoption. Below, we break down the most significant ones shaping Ethereum’s future.
ERC-20: The Foundation of Fungible Tokens
ERC-20 is the most widely adopted token standard on Ethereum. Introduced in 2015 by Fabian Vogelsteller, it defines a set of rules for creating fungible tokens—digital assets where each unit is identical and interchangeable.
Common use cases include:
- Utility tokens (e.g., Chainlink’s LINK)
- Stablecoins (e.g., USDC, DAI)
- Governance tokens (e.g., Uniswap’s UNI)
Core Functions
An ERC-20 compliant contract must implement six key functions:
totalSupply()– Returns total token supplybalanceOf(address)– Checks an account's balancetransfer(address, uint256)– Sends tokens between addressesapprove(address, uint256)– Authorizes third-party spendingallowance(owner, spender)– Views approved spending limittransferFrom(address, address, uint256)– Executes approved transfers
👉 Discover how modern wallets support ERC-20 tokens with seamless integration.
Why It Matters
ERC-20 laid the groundwork for initial coin offerings (ICOs) and DeFi growth. Its simplicity enabled thousands of projects to launch quickly while maintaining compatibility across the ecosystem.
ERC-721: The Birth of Non-Fungible Tokens (NFTs)
While ERC-20 governs identical tokens, ERC-721 introduced non-fungible tokens (NFTs)—each uniquely identifiable and indivisible.
Each NFT has:
- A unique ID within its contract
- Metadata (name, description, image URI)
- Provably scarce ownership recorded on-chain
This standard powers:
- Digital art (e.g., CryptoPunks)
- In-game assets (e.g., Axie Infinity)
- Virtual real estate (e.g., Decentraland)
Unlike ERC-20, NFTs cannot be split or swapped 1:1—they represent singular ownership.
ERC-1155: Multi-Token Efficiency
Proposed by Enjin in 2018, ERC-1155 revolutionized token design by allowing a single contract to manage multiple token types, including both fungible and non-fungible tokens.
Key Advantages
- Batch Transfers: Move multiple tokens in one transaction
- Gas Efficiency: Fewer transactions = lower fees
- Semi-Fungible Support: Ideal for game items with shared traits but unique levels
For example, a gaming dApp can issue:
- 100 fungible health potions (identical)
- 5 legendary swords (unique NFTs)
All within one smart contract.
This flexibility makes ERC-1155 ideal for complex ecosystems like metaverses and play-to-earn games.
Emerging Standards Enhancing Functionality
ERC-777: Smarter Token Transfers
Built as an upgrade to ERC-20, ERC-777 introduces:
- Single-step transfers (no two-step approve + transfer)
- Operator roles for delegated control
- Hooks that trigger actions during transfers
It improves user experience and enables richer interactions between contracts.
ERC-223: Preventing Lost Tokens
A common issue with ERC-20 is accidental loss when sending tokens to contract addresses. ERC-223 solves this by adding a tokenFallback() function that lets contracts reject unsupported token transfers—protecting users from irreversible mistakes.
ERC-865: Gasless Transfers
With ERC-865, third parties can pay gas fees for token transfers via transferPreSigned. This enables services to cover costs for users—a game-changer for mass adoption and frictionless dApp experiences.
👉 See how gas-efficient transactions are transforming user onboarding in DeFi.
Specialized Use Case Standards
ERC-4626: Yield-Bearing Vault Standard
Launched in 2022, ERC-4626 standardizes yield-bearing vaults—smart contracts that pool user funds and invest them in strategies to generate returns.
It provides:
- Uniform deposit/withdraw mechanics
- Share-based accounting (vault tokens represent shares)
- Interoperability with lending protocols and aggregators
Protocols like Yearn Finance and Convex use this standard to simplify yield farming integration.
ERC-884: Fractional Ownership of Real Assets
ERC-884 enables tokenization of real-world assets like real estate or art through fractional ownership. Each token represents a share of the underlying asset, opening up new investment models with increased liquidity and transparency.
Frequently Asked Questions (FAQ)
Q: What is the difference between ERC-20 and ERC-721?
A: ERC-20 tokens are fungible (interchangeable), like dollars. ERC-721 tokens are non-fungible (unique), like collectible items—each has distinct ownership and value.
Q: Can one contract support multiple token standards?
A: Yes. Contracts can implement multiple interfaces—for example, supporting both ERC-20 and ERC-721 functions. However, ERC-1155 offers a more efficient native solution.
Q: Why hasn’t ERC-777 replaced ERC-20?
A: Despite its advantages, ERC-777 lacks backward compatibility with older systems. Widespread migration requires ecosystem-wide coordination, which takes time.
Q: Are new ERC standards still being proposed?
A: Absolutely. The Ethereum community actively submits new proposals via EIPs (Ethereum Improvement Proposals). Recent focus areas include scalability, privacy, and cross-chain interoperability.
Q: How do I verify if a token follows a specific ERC standard?
A: You can inspect the smart contract code on explorers like Etherscan. Look for implemented interfaces (e.g., IERC20, IERC721) or check known function signatures.
The Future of Token Standards
As Ethereum evolves toward greater scalability and usability, so too will its token standards. Trends to watch include:
- Cross-chain compatibility: Standards enabling tokens to move securely across blockchains.
- Regulatory compliance: Token models with built-in KYC/AML features.
- Dynamic supply mechanisms: More sophisticated inflation/deflation controls beyond basic minting/burning.
While adoption varies, each new standard builds on past lessons—driving efficiency, security, and user experience forward.
👉 Explore how cutting-edge projects leverage advanced ERC standards for innovation.
Final Thoughts
From enabling global fundraising through ERC-20 to powering digital ownership with ERC-721 and streamlining complex ecosystems via ERC-1155, these standards are more than technical specs—they’re catalysts for decentralized innovation.
Understanding them empowers better decision-making whether you're building dApps, investing in tokens, or simply exploring Web3. As Ethereum continues to grow, expect new standards to emerge, each pushing the boundaries of what's possible in decentralized finance and digital ownership.