back to top
Monday, June 3, 2024
HomeCryptoDifferences in token standards between the top 10 blockchains and their functions

Differences in token standards between the top 10 blockchains and their functions

Token standards are the rules and protocols that dictate how tokens on the blockchain operate. Different blockchains have their own token standards to ensure interoperability, security, and efficiency.

Here are some key token standards on the top 10 blockchains with Turing environments on Ethereum, Solana, BNB and XRP:

Token standard on Ethereum

Ethereum has developed many token standards to facilitate the creation and management of digital assets. These standards ensure that the token can interoperate with various decentralized applications and services in the Ethereum ecosystem.

  1. ERC-20: The ERC-20 standard is the most widely used for creating fungible tokens on the Ethereum blockchain. These tokens are interchangeable, making them suitable for currencies, staking tokens, and utility tokens. ERC-20 tokens follow a set of rules that include how tokens are moved, how transactions are approved, and how users can access data.
  2. ERC-721: This standard is used to create NFTs that are unique and non-interchangeable. ERC-721 tokens are commonly used for digital art, collectibles, and other unique assets. Each token has a unique identifier, making it distinct from other tokens.
  3. ERC-777: The ERC-777 standard improves upon ERC-20 by allowing more complex interactions, such as sending tokens to contracts and notifying contracts in a single transaction. It also includes features to enhance privacy and security, addressing some of the limitations of ERC-20.
  4. ERC-1155: This multi-token standard allows for the creation of fungible and non-fungible tokens (NFTs) within a contract. ERC-1155 supports mass migration, which can help reduce transaction costs and network congestion. This standard is beneficial for applications that require management of multiple token types.
  5. ERC-4626: Designed for tokenized vaults, ERC-4626 optimizes and unifies the specifications of yield-bearing vaults. This standard aims to streamline the creation and management of vaults that yield yields on deposited assets.
  6. DN-404: DN-404 or “Divisible NFT-404” is an experimental standard, designed to address the limitations of ERC-404 by improving the efficiency, scalability and interoperability of tokenized assets chemistry. DN-404 uses a forked approach with the base ERC-20 token representing parts of the NFT and the ERC-721 token representing the actual NFT. This design enhances transaction throughput, reduces costs, and facilitates cross-chain transactions.

Token standards on Solana

Solana, known for its high-speed and low-cost transactions, has developed its own set of token standards to support the growing ecosystem of decentralized applications and digital assets.

  1. SPL (Solana Program Library): The SPL token standard is used for fungible and non-fungible tokens (NFTs) on the Solana blockchain. Unlike Ethereum, which has separate standards for different token types, SPL uses a unified approach where differences are determined at the token creation stage. This standard ensures that the SPL token is interoperable with the Solana wallet and smart contracts.
  2. Token-2022: As an enhancement to the SPL standard, Token-2022 introduces new functionalities such as yield tokens and enhanced remittance capabilities. This standard aims to provide more flexibility and enhancement to developers and users on the Solana blockchain.

Token standards on BNB (Binance Smart Chain)

Binance Smart Chain (BSC) has developed token standards to support its decentralized application and service ecosystem. These standards are designed to be compatible with Ethereum’s ERC standards, facilitating cross-chain interoperability.

  1. BEP-2: The BEP-2 standard was used for tokens on the initial Binance Beacon Chain, primarily for BNB and other tokens on the Binance decentralized exchange. BEP-2 tokens follow a set of rules to ensure they can be easily traded and managed on Binance Chain.
  2. BEP-20: This standard is used on BSC and is compatible with the Ethereum ERC-20 standard. BEP-20 allows the creation of many different types of tokens, including utility tokens, stablecoins, etc. BEP-20 tokens can be easily swapped with BEP-2 tokens, providing flexibility and interoperability. in the Binance ecosystem.

Token standards on XRP Ledger

XRP Ledger, designed to facilitate fast and efficient cross-border payments, has its own standards for token creation and management.

  1. XRP: Is the native token of XRP Ledger, used for transactions and as a currency bridge for cross-border payments. Unlike other token standards, XRP itself does not follow a specific token standard such as ERC-20 but is an integral part of the XRP Ledger’s operations.
  2. XLS (XRP Ledger Standard): This standard describes the specifications and protocols for token creation and management on the XRP Ledger. XLS standards ensure interoperability and compatibility within the XRP ecosystem, facilitating the creation of a variety of tokens, including fungible and non-fungible tokens (NFTs). .

Difference

Interoperability and ecosystem:

  • Ethereum’s ERC standards are highly specialized and have a large ecosystem, making them suitable for a variety of applications, but often result in complexity and higher gas costs.
  • Solana’s SPL standard is more uniform, providing lower transaction fees and faster settlement times, which is advantageous for high-throughput applications.
  • BNB’s BEP standards are designed to be compatible with Ethereum’s ERC standard, facilitating cross-chain interoperability.
  • XRP Ledger’s XLS standard focuses on ensuring interoperability within the XRP ecosystem.

Transaction costs and speeds:

  • Ethereum is known for higher transaction costs and slower processing times, especially during times of network congestion.
  • Thanks to its unique consensus mechanism, Solana generates significantly lower fees and faster transactions.
  • BNB Smart Chain also offers lower transaction costs than Ethereum, while the XRP Ledger is optimized to make cross-border payments fast and efficient.

Token types and flexibility:

  • Ethereum offers many different token standards for different use cases, including fungible tokens (ERC-20), non-fungible tokens or NFTs (ERC-721), multi-token (ERC- 1155) and hybrid token (DN-404).
  • Solana’s SPL standard combines fungible and non-fungible token (NFT) functionalities in a single protocol.
  • BNB’s BEP-20 standard extends the functionality of ERC-20, while XRP Ledger’s XLS standard provides a framework for fungible and non-fungible tokens.

Each token standard plays a key role in the respective blockchain ecosystem, enabling the creation, management, and transfer of standardized and interoperable digital assets.

You can see coin prices here.

Viet Cuong

According to CryptoSlate

Mark Tyson
Mark Tyson
Freelance News Writer. Always interested in the way in which technology can change people's lives, and that is why I also advise individuals and companies when it comes to adopting all the advances in Apple devices and services.
RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Fresh