ERC Token Standards & Important EIPs
The Ethereum community is the driving force behind all changes and innovations - like NFTs - where documents such as EIPs and ERCs play an important role. In this module, we'll dive deeper into some of these documents.
What is an EIP?
Similar to a system update in a notebook or phone, an Ethereum Improvement Proposal (EIP) is a document structure that provides for the standardization of improvement development within Ethereum, allowing anyone to propose their recommendations and so improve the development of this blockchain.
It is a technical document in which the Ethereum development community publishes its recommendations for enhancing the project, with the goal of resolving current issues or further developing the network when new technologies arise.
EIP-1559
Also referred to as the “London hard fork”, the Ethereum Improvement Proposal 1559 (EIP-1559) goal was to reduce fees and make the currency deflationary. In simple terms, EIP-1559 converts gas fees into a system with two components: a system-calculated “base fee” that all users must pay for ordinary transaction speed, and an optional “tip” that users can pay to speed up their transactions. EIP-1559 also requires that all Ether tokens, used to pay base fees, be burned. The overall supply of Ether tokens will be reduced due to this method, making Ether rare and thus more valuable.
What is an ERC and what is the difference between ERCs and EIPs?
An Ethereum Request for Comment (ERC) corresponds to a specific category of Standards Track EIP. A Standards Track EIP specifies any modification that affects most or all Ethereum implementations and can be further subdivided into core, networking, interface, and ERC. While an EIP improves the protocol itself, the ERC builds rules that enable the interaction of applications and contracts. EIPs (which include ERCs) serve as the central unit for governance (decisions) and are documented on Ethereum.
What are ERC token standards?
Several Ethereum development standards are based on token interfaces. These standards serve to ensure that smart contracts stay composable so that when a new project releases a token, it is interoperable with current decentralized exchanges.
ERC-20
In November 2015, Fabian Vogelsteller introduced the first version of a token as Ethereum Request for Comments (ERC). It was automatically assigned GitHub number 20, giving rise to the name “ERC20 Tokens”. ERC-20 establishes a standard interface for representing a token. The standard provides basic token transfer functionality. Its core purpose is to allow interoperability between the standards that support it, such as wallets and exchanges.
ERC-721
While not intended for securities, the ERC-721 and ERC-1155 standards are relevant because they allow you to tokenize physical assets. Including the concept of non-fungibility in the ERC-721 standard allows for the creation of smart contracts in which each token is unique. This concept easily applies to rare, unique, or any other type of collectible item. The CryptoKitties project, a game that allows you to buy, sell, and exchange virtual cards, is the most well-known implementation.
ERC-1155
ERC-1155 tokens are an evolution of the ERC-20 and ERC-721 tokens in that they allow you to manage both fungible and non-fungible tokens in a single contract, allowing you to conduct transactions with multiple tokens of different types. This functionality was designed to use tokens in more complex video games than CryptoKitties, such as games that allow the sale, purchase, and exchange of game currency and virtual objects.
ERC-4907
ERC-4907 is an Ethereum token standard designed to facilitate the creation of fungible and non-fungible tokens (NFTs). NFTs are a type of digital asset that is unique and cannot be divided or exchanged for other tokens. ERC-4907 provides a standardized way to create and manage NFTs on the Ethereum blockchain, enabling developers to create unique digital collectibles, gaming items, and other digital assets.
Conclusion
As in any other company or project, the team behind it has goals and aims to constantly improve the technology and the quality of the product they build. In the crypto sector, this is no different: Ethereum has its EIPs and ERCs, where the developers create proposals and the community votes to decide which ones will be implemented. This means that in the future more EIPs and ERCs could be added to this module, as Ethereum and Ether evolve over time.
Highlights
EIPs is an "Ethereum Improvement proposal". It is a technical document in which the Ethereum development community publishes its recommendations for enhancing the project, with the goal of resolving current issues or further developing the network when new technologies arise.
EIP-1559 was responsible for reducing fees and making the ETH currency deflationary.
ERC-20 established a standard interface that allowed tokens to be created under the Ethereum ecosystem. This standard provides basic token transfer functionality.
ERC-721 standard allows the tokenization of assets through smart contracts in which each token is unique.
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ERC Token Standards & Important EIPs
The Ethereum community is the driving force behind all changes and innovations - like NFTs - where documents such as EIPs and ERCs play an important role. In this module, we'll dive deeper into some of these documents.
What is an EIP?
Similar to a system update in a notebook or phone, an Ethereum Improvement Proposal (EIP) is a document structure that provides for the standardization of improvement development within Ethereum, allowing anyone to propose their recommendations and so improve the development of this blockchain.
It is a technical document in which the Ethereum development community publishes its recommendations for enhancing the project, with the goal of resolving current issues or further developing the network when new technologies arise.
EIP-1559
Also referred to as the “London hard fork”, the Ethereum Improvement Proposal 1559 (EIP-1559) goal was to reduce fees and make the currency deflationary. In simple terms, EIP-1559 converts gas fees into a system with two components: a system-calculated “base fee” that all users must pay for ordinary transaction speed, and an optional “tip” that users can pay to speed up their transactions. EIP-1559 also requires that all Ether tokens, used to pay base fees, be burned. The overall supply of Ether tokens will be reduced due to this method, making Ether rare and thus more valuable.
What is an ERC and what is the difference between ERCs and EIPs?
An Ethereum Request for Comment (ERC) corresponds to a specific category of Standards Track EIP. A Standards Track EIP specifies any modification that affects most or all Ethereum implementations and can be further subdivided into core, networking, interface, and ERC. While an EIP improves the protocol itself, the ERC builds rules that enable the interaction of applications and contracts. EIPs (which include ERCs) serve as the central unit for governance (decisions) and are documented on Ethereum.
What are ERC token standards?
Several Ethereum development standards are based on token interfaces. These standards serve to ensure that smart contracts stay composable so that when a new project releases a token, it is interoperable with current decentralized exchanges.
ERC-20
In November 2015, Fabian Vogelsteller introduced the first version of a token as Ethereum Request for Comments (ERC). It was automatically assigned GitHub number 20, giving rise to the name “ERC20 Tokens”. ERC-20 establishes a standard interface for representing a token. The standard provides basic token transfer functionality. Its core purpose is to allow interoperability between the standards that support it, such as wallets and exchanges.
ERC-721
While not intended for securities, the ERC-721 and ERC-1155 standards are relevant because they allow you to tokenize physical assets. Including the concept of non-fungibility in the ERC-721 standard allows for the creation of smart contracts in which each token is unique. This concept easily applies to rare, unique, or any other type of collectible item. The CryptoKitties project, a game that allows you to buy, sell, and exchange virtual cards, is the most well-known implementation.
ERC-1155
ERC-1155 tokens are an evolution of the ERC-20 and ERC-721 tokens in that they allow you to manage both fungible and non-fungible tokens in a single contract, allowing you to conduct transactions with multiple tokens of different types. This functionality was designed to use tokens in more complex video games than CryptoKitties, such as games that allow the sale, purchase, and exchange of game currency and virtual objects.
ERC-4907
ERC-4907 is an Ethereum token standard designed to facilitate the creation of fungible and non-fungible tokens (NFTs). NFTs are a type of digital asset that is unique and cannot be divided or exchanged for other tokens. ERC-4907 provides a standardized way to create and manage NFTs on the Ethereum blockchain, enabling developers to create unique digital collectibles, gaming items, and other digital assets.
Conclusion
As in any other company or project, the team behind it has goals and aims to constantly improve the technology and the quality of the product they build. In the crypto sector, this is no different: Ethereum has its EIPs and ERCs, where the developers create proposals and the community votes to decide which ones will be implemented. This means that in the future more EIPs and ERCs could be added to this module, as Ethereum and Ether evolve over time.
Highlights
EIPs is an "Ethereum Improvement proposal". It is a technical document in which the Ethereum development community publishes its recommendations for enhancing the project, with the goal of resolving current issues or further developing the network when new technologies arise.
EIP-1559 was responsible for reducing fees and making the ETH currency deflationary.
ERC-20 established a standard interface that allowed tokens to be created under the Ethereum ecosystem. This standard provides basic token transfer functionality.
ERC-721 standard allows the tokenization of assets through smart contracts in which each token is unique.
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