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After bitcoin, everyone knows that Ethereum is the one that follows, and it is regarded as the mother of smart contracts.
This article is going to increase your understanding of Ethereum standards. As a developer, it is important to know that there are other standards in Ethereum apart from ERC-20 and ERC-721.
What is an ERC?
ERC means "Ethereum Request Comment." An Ethereum Request for Comments (ERC) is a document that smart contract programmers utilizing the Ethereum blockchain platform write.
They explain the rules in these documents that Ethereum-based tokens must accept.
The Ethereum community approves some of these documents after working through the EIP processes, confirms them, and then developers implement them. This is how the document becomes an ERC.
ERCs originate as EIPs and could address diverse areas, e.g., tokens and registration names.
Here is the list of some ERC standards you need to know.
1. ERC-20 standard – The Most Popular Token Standard
"ERC-20" refers to a scripting principle used within the Ethereum blockchain. This technical standard authorizes several rules and actions that an Ethereum token or smart contract must follow and steps to be able to execute it.
It is possibly simplest to understand ERC-20 as a set of basic guidelines and functions that any new token created on the Ethereum network must follow.
It’s a fungible token standard. This means that two coins of any token built on it have the same value at a given point in time.
It’s a fungible token standard. This means that two coins of any token built on it have the same value at a given point in time. Take the example of the Uniswap. Their UNI token adheres to ERC-20, and 1UNI token has the same value as another UNI token at any given time.
2. ERC 721 – The Standard for Non-Fungible Tokens
ERC-721 is a token standard on Ethereum for non-fungible tokens (NFTs). Bitcoin is fungible because any Bitcoin can be replaced by any other Bitcoin.Each NFT, on the other hand, is different. One NFT cannot replace another.
A smart contract that will interact with ERC 721 tokens must implement a separate interface, and hence it needs to follow the ERC 165 standard.
3. ERC 777 – Reduces Friction in Crypto Transactions
While invoking a smart contract, after the first transaction, the ERC 20 standard requires another transaction to verify whether the criteria are met. The smart contract is invoked only after this. This increases the number of transactions, effectively causing friction.
ERC 777 is a proposed standard that includes a function to identify the receipt of tokens and start a smart contract immediately after the first transaction.
While reducing the transaction overhead, it also allows a user to dismiss incoming tokens from a blacklisted address. The blacklisting of an address can be for various reasons, such as hacking or illegal activities.
The ability to decline payment from such an address improves the security position of an Ethereum DApp.
ERC 777 upholds all the power of ERC 20. OpenZeppelin has already implemented ERC777 to build, automate, and operate decentralized applications.
4. ERC 1155 – The Most Advanced Non-Fungible Token
ERC 1155 solves all the crucial issues of ERC 20 and ERC 721—the former best token standards for non-fungible tokens. For ERC 1155, users can build multiple tokens in a single contract.
Also, you can use ERC-1155 for fungible and non-fungible use cases. All of these qualities make ERC1155 better at storage management, efficient, and budget-friendly.
5. ERC-1155 Supports Bundle Transfer
ERC-1155 directly addresses this by supporting batch transfers, which allows the bundling of multiple assets into one smart contract. In doing so, it significantly reduces the potential for a transfer to cause network congestion while lowering the transaction costs.
6. ERC-809: For Renting out NFTs
This standard is used to rent rival non-fungible tokens. An NFT is described as a "rival" if its use or ownership by one individual prevents concurrent use or ownership by other individuals.
ERC-809 authorizes an owner to rent access to their rival NFTs using a standard set of rules, and users can view all past and current rental agreements from a single wallet interface.
The ERC standards are a great step towards the adoption of smart contract technology.
The Ethereum ecosystem keeps flourishing because it made room for upgrades, and through those, several ERC standards have been approved to make the Ethereum ecosystem better.
If there are not enough checks and balances and key ERC functionality is changed without notice, that may lead to unforeseen problems as smart contracts will lose the ability to fully interact with each other.