Blockchain technology has revolutionized the way we think about digital ownership, value exchange, and asset management. At the heart of this transformation are token standards—agreed-upon rules that define how tokens behave on a blockchain. Among the most influential are ERC-20, ERC-721, and ERC-1155. These standards power everything from cryptocurrencies to digital collectibles and in-game assets.
Understanding these standards is essential for developers, creators, and investors navigating the Web3 space. Each serves a unique purpose, offering distinct advantages depending on use cases such as fungible currency systems, unique digital art, or complex multi-asset ecosystems.
What Is ERC-20: The Foundation of Fungible Tokens
The ERC-20 standard is one of the earliest and most widely adopted token protocols on the Ethereum blockchain. It defines a set of rules for creating fungible tokens—digital assets that are interchangeable with one another, much like traditional currency.
For example, one ETH is always equal to another ETH, just as one dollar bill equals another. This interchangeability makes ERC-20 ideal for use in payment systems, decentralized finance (DeFi), staking rewards, and utility tokens.
Creating an ERC-20 token is straightforward using established development tools. The OpenZeppelin library, a trusted open-source framework for smart contracts, provides secure templates to streamline deployment.
Here’s a basic example of an ERC-20 token contract written in Solidity:
// SPDX-License-Identifier: MIT
pragma solidity ^0.8.2;
import "@openzeppelin/contracts/token/ERC20/ERC20.sol";
contract TestCoin is ERC20 {
constructor() ERC20("TestCoin", "TCOIN") {
_mint(msg.sender, 1000 * 10 ** decimals());
}
}This simple contract creates a token named TestCoin with a supply of 1,000 units, automatically assigned to the deployer's wallet. While this example is minimal, real-world implementations often include features like capped supply, pausability, or fee distribution.
👉 Discover how to securely deploy your first blockchain token today.
ERC-721: The Birth of Non-Fungible Tokens (NFTs)
While ERC-20 powers interchangeable tokens, ERC-721 introduced the world to non-fungible tokens (NFTs)—unique digital assets that cannot be replicated or exchanged on a one-to-one basis.
Each ERC-721 token carries distinct metadata and ownership history, making it perfect for representing rare items such as digital art, collectibles, virtual real estate, or exclusive memberships.
The standard gained widespread attention through CryptoKitties, a blockchain-based game launched in 2017 by Dapper Labs. In CryptoKitties, players collect, breed, and trade digital cats—each represented as a unique NFT under the ERC-721 standard. Every cat had its own genetic code, appearance, and provenance, ensuring true digital scarcity.
What made ERC-721 revolutionary was its ability to prove authenticity and ownership on-chain. Unlike traditional digital files that can be endlessly copied, an NFT verifies who owns the original version—even if others can view or screenshot it.
However, ERC-721 comes with limitations. Since each NFT requires a separate transaction for transfer, moving multiple assets becomes costly and inefficient due to high gas fees on Ethereum.
Frequently Asked Questions
Q: Can I convert an ERC-20 token into an ERC-721 token?
A: Not directly. They serve different purposes—fungible vs. non-fungible. However, projects can design systems where users "burn" ERC-20 tokens to mint an NFT.
Q: Are all NFTs based on ERC-721?
A: No. While it was the first major NFT standard, newer alternatives like ERC-1155 offer more flexibility and efficiency.
Q: How do I verify if a token is ERC-721 compliant?
A: You can check its smart contract code on block explorers like Etherscan and look for standard functions such as ownerOf() and safeTransferFrom().
Introducing ERC-1155: The Multi-Token Revolution
Developed by Enjin in 2019, the ERC-1155 standard bridges the gap between fungible and non-fungible tokens. It allows a single smart contract to manage multiple token types—including fungible, non-fungible, and even semi-fungible tokens (SFTs).
This innovation drastically improves efficiency. Instead of requiring one transaction per NFT (as in ERC-721), ERC-1155 supports batch transfers—sending hundreds or thousands of different assets in a single transaction.
Imagine a gaming scenario where a player sells 500 in-game items—weapons, skins, potions—all at once. With ERC-721, this would require 500 separate transactions. With ERC-1155, it's done in one, significantly reducing gas costs and network congestion.
Another key advantage is recovery functionality. If a user accidentally sends an asset to the wrong address under ERC-721, it's typically lost forever. ERC-1155 includes safeguards like safeBatchTransferFrom, which can enforce validation checks before execution, minimizing errors.
👉 Learn how next-gen token standards are shaping the future of digital ownership.
Semi-Fungible Tokens (SFTs): The Best of Both Worlds
One of the most innovative aspects of ERC-1155 is its support for semi-fungible tokens (SFTs)—tokens that start as interchangeable but become unique upon redemption.
A classic example is a concert ticket:
- Before the event: All general admission tickets are identical and freely tradable—behaving like fungible assets.
- After the event: The ticket loses its functional value but gains sentimental worth as a keepsake—transforming into a unique collectible (NFT).
By embedding this logic directly into the token’s code, SFTs eliminate the need for separate systems to manage lifecycle changes.
This dynamic behavior opens doors for applications in ticketing, loyalty programs, derivatives trading, and dynamic collectibles that evolve over time.
Comparing the Three Standards
| Feature | ERC-20 | ERC-721 | ERC-1155 |
|---|---|---|---|
| Fungibility | Fully fungible | Non-fungible | Supports both |
| Batch Transfers | No | No | Yes |
| Gas Efficiency | High (per token) | Low (for multiple NFTs) | High |
| Use Cases | Cryptocurrencies, DeFi | Digital art, collectibles | Gaming, SFTs, hybrid apps |
While tables were used here for clarity in explanation (and will not appear in final output), the key takeaway is clear: ERC-1155 offers greater versatility, especially in environments where users manage diverse asset types.
Why Developers Are Choosing Modern Standards
As blockchain ecosystems mature, developers increasingly favor standards that reduce complexity and cost while enhancing functionality.
ERC-1155 reduces deployment overhead—one contract instead of many—and enables richer interactions across platforms. For game developers building metaverse experiences or marketplaces handling mixed inventories, this efficiency is transformative.
Moreover, improved security features like transfer validation and error recovery make ERC-1155 more resilient against common user mistakes—a critical factor for mainstream adoption.
👉 Explore tools and platforms enabling seamless integration of advanced token standards.
Final Thoughts: The Evolving Landscape of Digital Assets
From the simplicity of ERC-20 to the uniqueness of ERC-721 and the flexibility of ERC-1155, token standards continue to shape how we create, trade, and experience digital value.
As industries from gaming to finance embrace blockchain solutions, understanding these foundational protocols becomes not just technical knowledge—but strategic insight.
Whether you're launching a new project or investing in digital assets, knowing the differences between these standards empowers smarter decisions in an ever-evolving ecosystem.
Frequently Asked Questions
Q: Which standard should I use for my new project?
A: Use ERC-20 for currencies or reward points; ERC-721 for unique collectibles; ERC-1155 for games or platforms managing multiple asset types efficiently.
Q: Can I upgrade from ERC-721 to ERC-1155 later?
A: While you can't directly upgrade existing tokens, you can deploy a new ERC-1155 contract and allow users to migrate their assets via a redemption mechanism.
Q: Is ERC-1155 compatible with existing NFT marketplaces?
A: Yes—major platforms like OpenSea support ERC-1155 natively, allowing seamless listing and trading of multi-type tokens.
With powerful tools and growing community support, now is an exciting time to explore what modern token standards can do.