Token Standard
A set of rules defined in a smart contract interface that tokens must implement to be compatible with the broader ecosystem of wallets, exchanges, and dApps on a blockchain. Standards ensure interoperability — any application built to support a standard automatically works with all tokens following it. Major Ethereum standards include ERC-20 (fungible), ERC-721 (NFT), and ERC-1155 (multi-token).
“Because both USDC and UNI follow the ERC-20 standard, any Ethereum wallet that supports one automatically supports the other — no custom integration needed.”
ERC-20
The most widely adopted token standard on Ethereum, defining a common set of rules that all fungible tokens must follow. ERC-20 specifies six mandatory functions (like transfer, approve, and balanceOf) that ensure any compliant token can be seamlessly used across wallets, exchanges, and DeFi protocols without custom integration.
ERC-721
The Ethereum token standard for non-fungible tokens (NFTs). Unlike ERC-20 tokens where each unit is identical, each ERC-721 token has a unique identifier making it one-of-a-kind. The standard defines functions for transferring, approving, and querying ownership of individual tokens, enabling digital art, collectibles, and unique digital assets.
ERC-1155
A multi-token standard on Ethereum that can represent both fungible and non-fungible tokens within a single smart contract. ERC-1155 is more gas-efficient than deploying separate ERC-20 and ERC-721 contracts, and supports batch transfers, making it popular for gaming assets and collections with varying rarity levels.
Token
A digital asset created on an existing blockchain rather than its own native chain. Tokens can represent a wide range of assets and utilities — from currency and governance rights to real-world assets and collectibles. Unlike coins (BTC, ETH) which are native to their blockchain, tokens are created using smart contracts on platforms like Ethereum (ERC-20, ERC-721).