There are thousands of cryptocurrencies, and many of them are Ethereum tokens. Ethereum is a platform that lets you write and execute smart contracts. When developers create a new app for blockchain tech with smart contracts, they can create a new Ethereum token as well. There are multiple types of Ethereum tokens, each with their own unique features.
ERC-20 Tokens
ERC-20 tokens are among the most common Ethereum tokens. This is the standard for smart contracts with only six basic functions, including total supply, transfer, transfer from, balance of, approve, and allowance. This type of token has incredibly simple code, allowing those with minimal computer science knowledge to utilize it. This is commonly regarded as the industry standard, and thousands of crypto projects use the ERC-20 standard.
ERC-223 Tokens
ERC-223 builds on the ERC-20 standard by overcoming issues, including the ability to lose tokens by accidentally sending them to a smart contract with the same process as a wallet. The ERC-223 standard avoids the problem by using the same function for this type of transfer. This standard also improves efficiencies by reducing the steps needed for a transfer from two to one, making transfers cheaper. ERC-223 tokens are also backward compatible with ERC-20. Even with those benefits, the ERC-223 token standard still has not been utilized by a major crypto project.
Despite the fact that ERC-223 tokens have still not been used for a major project, many experts feel that this may soon become the default Ethereum token standard.
ERC-721 Tokens
ERC-721 tokens entered the arena in 2017 when CryptoKitties gained popularity. The biggest difference between ERC-721 and other Ethereum tokens is the fact that you can create non-fungible tokens with ease using ERC-721. This means that tokens on the same platform or ecosystem can have different values. This allows for tokenization of assets that are unique. While the token standard rose to fame with digital cats, the non-fungible support is also useful for things like real estate, artwork, and more. As such, ERC-721 is a very popular standard for real-world assets and will likely grow in popularity.
ERC-777 Tokens (and ERC-820 Tokens)
ERC-777 is backward compatible with ERC-20 standards and aims to improve on it. Like ERC-223, ERC-777 eliminates the issue of lost tokens thanks to the sending method. ERC-777 uses a central registry like that of the ERC-820 token standard. That latter standard is essentially a central registry for smart contracts on Ethereum’s network. ERC-777 adds to this by adding new functions such as send instead of relying on the ERC-20 functions. It even offers “approved operators,” letting you approve a smart contract to move tokens for you. It also has a standard for burning and minting tokens. ERC-777 is highly customizable but still not very popular.
The Future
As more and more blockchain projects go under development, it is likely that the use of Ethereum will expand. We will likely have even more Ethereum token standards to choose from in the future, as well as improvements to the current Ethereum standards.