Smart Contracts
Oct 20, 2025
Essential ERC Token Standards Every Web3 Developer Must Know
Master the most important Ethereum token standards: ERC-20 for fungible tokens, ERC-721 for NFTs, ERC-1155 for multi-tokens, and ERC-4337 for account abstraction. Learn implementation patterns, security best practices, and real-world use cases.
Understanding ERC Standards
ERC (Ethereum Request for Comments) standards are technical specifications for smart contracts on Ethereum and EVM-compatible chains. These standards ensure interoperability between different contracts and wallets, creating a unified ecosystem where tokens and NFTs work seamlessly across platforms.
1. ERC-20: Fungible Token Standard
ERC-20 is the foundational standard for fungible tokens (where each token is identical and interchangeable). Introduced in 2015, it powers thousands of cryptocurrencies and DeFi protocols.
Core Functions:
totalSupply(): Returns total token supply
balanceOf(address): Returns balance of an address
transfer(address, amount): Transfers tokens to recipient
approve(spender, amount): Allows spender to withdraw from your account
transferFrom(from, to, amount): Transfers tokens on behalf of owner
allowance(owner, spender): Returns remaining allowance
Use Cases:
Governance tokens (UNI, AAVE), stablecoins (USDC, DAI), utility tokens, reward tokens, and any scenario requiring fungible assets.
Security Considerations:
Check for reentrancy vulnerabilities in transfer functions
Validate allowance amounts to prevent unlimited approvals
Use SafeMath or Solidity 0.8+ to prevent overflow/underflow
Implement pausable functionality for emergency stops
2. ERC-721: Non-Fungible Token (NFT) Standard
ERC-721 revolutionized digital ownership by introducing non-fungible tokens where each token is unique and has distinct properties. This standard powers the NFT ecosystem including art, gaming assets, real estate, and identity.
Key Functions:
ownerOf(tokenId): Returns owner of specific token
safeTransferFrom(from, to, tokenId): Safely transfers NFT with receiver validation
approve(address, tokenId): Approves address to transfer specific NFT
setApprovalForAll(operator, approved): Approves operator for all tokens
tokenURI(tokenId): Returns metadata URI for token
Metadata Standards:
ERC-721 tokens typically point to off-chain metadata (JSON) stored on IPFS or Arweave containing name, description, image, and attributes. This keeps gas costs reasonable while enabling rich media.
3. ERC-1155: Multi-Token Standard
ERC-1155 combines the best of ERC-20 and ERC-721, allowing a single contract to manage both fungible and non-fungible tokens. This is ideal for gaming (weapons, currencies, unique items) and reduces gas costs significantly.
Advantages:
Batch Operations: Transfer multiple token types in one transaction
Gas Efficiency: 90% gas savings compared to deploying separate ERC-20/721 contracts
Atomic Swaps: Trade multiple assets in single transaction
Mixed Fungibility: ID 1 could be fungible (1000 gold coins), ID 2 non-fungible (unique sword)
4. ERC-4337: Account Abstraction
ERC-4337 enables smart contract wallets without protocol changes, allowing for gasless transactions, social recovery, and multi-sig functionality at the account level.
Key Benefits:
Users can pay gas fees in any token, not just ETH
Social recovery: Recover wallet with trusted contacts
Batch transactions: Multiple operations in one signature
Sponsored transactions: Apps can pay gas for users
5. ERC-2981: NFT Royalty Standard
ERC-2981 provides a standardized way to handle royalty payments for NFTs, ensuring creators receive a percentage of secondary sales across all marketplaces.
Implementation Best Practices
For ERC-20 Tokens:
Use OpenZeppelin's audited implementations as base
Implement pausable and ownable patterns
Add events for all state changes
Consider ERC-20 extensions: Burnable, Mintable, Snapshot
For ERC-721 NFTs:
Use SafeERC721 receiver checks
Store metadata on IPFS for permanence
Implement enumerable extension for token discovery
Add reveal mechanisms for mint collections
For ERC-1155:
Plan your ID structure carefully (fungible vs non-fungible ranges)
Use batch functions to maximize gas savings
Implement proper access controls per token type
Choosing the Right Standard
Use ERC-20 when: Creating currencies, governance tokens, or any fungible asset
Use ERC-721 when: Each item is unique (art, collectibles, domain names, real estate)
Use ERC-1155 when: You have multiple token types (gaming ecosystems, marketplace platforms)
Use ERC-4337 when: Building user-friendly dApps requiring gasless transactions or social recovery
The Future of Token Standards
The Ethereum community continues evolving these standards. ERC-6551 (Token Bound Accounts) lets NFTs own assets, ERC-5192 (Soulbound Tokens) creates non-transferable credentials, and ERC-4626 standardizes yield-bearing vaults. Understanding these foundational standards is crucial for any Web3 developer building on EVM chains.
