Cryptocurrencies built on the Ethereum blockchain are often referred to as ERC-20 tokens (or sometimes ERC-721 for NFTs). Ethereum's blockchain allows developers to create and deploy decentralized applications (dApps) and new tokens through smart contracts. Here’s a breakdown of the most common types: 1. ERC-20 Tokens These are the most common type of tokens on Ethereum. They follow a standard set of rules that allows them to interact with smart contracts and other tokens within the Ethereum ecosystem. Examples: USDT (Tether), Chainlink (LINK), Uniswap (UNI), and Aave (AAVE). 2. ERC-721 Tokens (NFTs) These are unique, non-fungible tokens (NFTs) that represent ownership of a unique asset. Used primarily for digital art, collectibles, gaming items, etc. Examples: CryptoKitties, Bored Ape Yacht Club (BAYC). 3. ERC-1155 Tokens A more flexible token standard that allows for the creation of both fungible (like ERC-20) and non-fungible tokens (like ERC-721) under the same contract. Used in applications where assets might need to be both fungible and non-fungible (like in gaming). Example: Gods Unchained (a popular blockchain-based game). 4. DAOs and Governance Tokens Many decentralized organizations and protocols issue governance tokens, which allow holders to vote on important decisions regarding the future of the project. Examples: Compound (COMP), Maker (MKR). 5. Stablecoins Stablecoins are pegged to the value of real-world assets, typically fiat currencies like the U.S. dollar. Popular stablecoins on Ethereum include: USDT (Tether), USDC (USD Coin), DAI. These cryptocurrencies and tokens benefit from Ethereum's smart contract capabilities, which enable them to interact in decentralized ways without needing centralized intermediaries.
The ERC ecosystem refers to a range of Ethereum Request for Comments (ERC) standards that define the rules and guidelines for various types of tokens and other features that can be implemented on the Ethereum blockchain. These standards ensure that tokens and smart contracts can interact seamlessly within the broader Ethereum ecosystem. Here’s a breakdown of some of the key ERC standards and their use cases: 1. ERC-20: The Standard for Fungible Tokens ERC-20 is the most widely used standard for creating fungible tokens on Ethereum. These tokens are interchangeable (i.e., 1 token is equal in value to another) and are used across a wide range of applications, such as DeFi (Decentralized Finance), gaming, and ICOs (Initial Coin Offerings). Examples: USDT (Tether), Uniswap (UNI), Aave (AAVE). Key Features: Consists of 6 basic functions (like transfer, balanceOf, approve, etc.). Enables easy integration with exchanges, wallets, and other Ethereum-based services. 2. ERC-721: Non-Fungible Tokens (NFTs) ERC-721 defines a standard for creating non-fungible tokens (NFTs), which represent unique digital assets. Unlike ERC-20 tokens, each ERC-721 token is distinct and cannot be exchanged on a 1:1 basis. Used for creating collectibles, digital art, gaming assets, and more. Examples: CryptoKitties, Bored Ape Yacht Club (BAYC), Decentraland (MANA). Key Features: Each token has a unique identifier (ID) and metadata. Perfect for unique items like digital art or virtual real estate. 3. ERC-1155: Multi-Token Standard ERC-1155 is a more advanced token standard that allows for the creation of both fungible and non-fungible tokens under the same contract. It’s commonly used in gaming and collectibles, where you might need to manage both types of assets within a single contract. Examples: Gods Unchained (a blockchain-based card game). Key Features: Can represent multiple types of assets (fungible and non-fungible) in a single contract. More efficient than ERC-20 or ERC-721 when dealing with large-scale items or assets. 4. ERC-223: An Improved Token Standard ERC-223 is an improvement over ERC-20, designed to handle the issue of tokens being sent to incompatible contracts or addresses (which could lead to loss of tokens). It ensures that tokens cannot be sent to an address that does not support them. Key Features: Directly sends tokens to the recipient's contract, preventing accidental loss. Backward-compatible with ERC-20 but with improved features. 5. ERC-777: Advanced Token Standard ERC-777 is another token standard that builds upon ERC-20 but with more advanced features, including improved security and the ability to hook functions into the token transfer process. Key Features: More flexibility with sending tokens. Allows for the creation of "operators" who can manage tokens on behalf of other addresses. 6. ERC-1820: A Universal Registration System ERC-1820 defines a universal registry system for smart contracts and tokens to help streamline the interaction between them. Key Features: Helps Ethereum contracts recognize and interact with other smart contracts. Allows tokens and contracts to communicate more effectively with one another. 7. ERC-1155: Multi-Token Standard This standard is used to represent a wide variety of tokens, including fungible, non-fungible, and semi-fungible tokens. It's particularly useful in gaming, where different assets, such as weapons, skins, or currencies, might need to be represented within the same contract. 8. ERC-4337: Account Abstraction (Coming Soon) This is an upcoming standard that focuses on account abstraction—allowing Ethereum accounts to operate more like smart contracts. Key Features: Facilitates more flexible wallet types (e.g., smart contract-based wallets). Aims to improve the user experience and expand Ethereum’s use case in a way that enhances decentralized applications (dApps). Key Components of the ERC Ecosystem: Smart Contracts: The core of Ethereum’s decentralized applications (dApps), where these token standards are implemented. DApps (Decentralized Applications): Applications that use Ethereum's blockchain to run without a centralized intermediary. Exchanges: Decentralized exchanges (DEXs) like Uniswap or SushiSwap, and centralized exchanges (CEXs) often support ERC-20 tokens and can trade NFTs. Wallets: MetaMask, Trust Wallet, and Ledger are examples of wallets that support ERC-based tokens. Oracles: Services like Chainlink provide real-world data to Ethereum smart contracts, enabling ERC tokens to react to external events. Other Notable ERC Standards: ERC-1400: A token standard designed for security tokens, which represent ownership in real-world assets like stocks or real estate. ERC-721X: An experimental proposal to improve ERC-721 by allowing better handling of mass minting or transactions of NFTs. In Summary: The ERC ecosystem is rich and diverse, offering numerous standards that cater to different use cases within Ethereum. ERC-20 is the most common and is primarily used for fungible tokens, while ERC-721 and ERC-1155 have enabled the rise of NFTs and complex digital assets in the decentralized space.