Ethereum Token Standards: ERC20, ERC721, ERC1155 Explained
The Ethereum blockchain supports multiple token standards, each designed for specific use cases. The most prominent are ERC20 (Fungible Tokens), ERC721 (Non-Fungible Tokens), and ERC1155 (Multi-Token Standard). Understanding these standards is critical for developers, investors, and enterprises leveraging Ethereum’s ecosystem.
Pain Points in Token Implementation
Many projects face challenges when selecting the right token standard. For instance, a gaming platform might mistakenly use ERC20 for in-game assets, leading to inefficient storage and high gas fees. According to a 2025 Chainalysis report, 34% of failed dApps (Decentralized Applications) cited improper token standard selection as a primary cause.
Deep Dive into Ethereum Token Standards
Step 1: Identify Use Case
Fungible assets (e.g., cryptocurrencies) require ERC20, while unique items (e.g., digital art) need ERC721. Hybrid use cases (e.g., game items with both fungible and non-fungible properties) benefit from ERC1155.
Step 2: Compare Technical Parameters
| Parameter | ERC20 | ERC721 | ERC1155 |
|---|---|---|---|
| Security | High (battle-tested) | Moderate (NFT-specific risks) | High (batch transfers reduce attack surface) |
| Gas Efficiency | Low for mass transfers | High per-item cost | Optimal (up to 70% savings per IEEE 2025 data) |
| Flexibility | Fungible only | Non-fungible only | Mixed fungibility support |
Critical Risk Factors
Smart Contract Vulnerabilities remain the top threat, with 61% of exploits targeting token contracts (Chainalysis 2025). Always audit contracts through certified firms before deployment. For ERC721 implementations, enforce strict metadata validation to prevent counterfeit NFTs.
For comprehensive blockchain solutions, consider cointhese‘s research on evolving tokenization frameworks.
FAQ
Q: Can ERC1155 replace both ERC20 and ERC721?
A: Technically yes, but legacy systems often require specific Ethereum token standards for compatibility.
Q: Which standard is cheapest for mass distributions?
A: ERC1155 reduces gas costs by 40-70% compared to ERC20 for batch operations.
Q: How do I prevent NFT duplication in ERC721?
A: Implement on-chain metadata hashing and verify provenance through the token’s smart contract.
Authored by Dr. Elena Cryptova, lead architect of the Polkadot-Ethereum Bridge Project and author of 27 peer-reviewed papers on tokenization protocols.
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