Ethereum Token Standards, are application level standards for Ethereum that include token standards, name registries, library/package formats, and more.
Each time a dapp is developed on the Ethereum network, a new token is created to use with it (if no appropriate token exists.)
What Are the Most Common Ethereum Token Standards?
These tokens can have different qualities according to several different token standards, the most popular of which are ERC20, ERC721, and ERC223.
The ERC20 token standard is the most well-known and widely used token standard on the Ethereum network.
Each ERC20 token is essentially a smart contract that allows its creators to determine how it interacts with its corresponding dapp and with other users.
However, some ERC20 tokens can also be traded on cryptocurrency exchanges.
The ERC223 token standard is a slightly improved version of the ERC20 standard. ERC20 tokens could be easily lost if they were sent to the incorrect wallet address.
ERC223 makes it more difficult for tokens to be lost. Moreover, ERC223 tokens only require half of the fees that ERC20 tokens do to send transactions with.
The ERC223 standard is backwards compatible with ERC20, but most wallets and dapps don’t support ERC223 yet.
The interesting thing about the ERC721 token standard is that it makes tokens non-fungible, which allows for the creation of collectible digital objects.
The most famous example of this is the CryptoKitties game, in which unique digital cats can be bought and sold for one another.
However, in the future, these non-fungible tokens could be used to trade things like art and real estate.