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What are token standards?

4 min read -July 03, 2024 by Phung Ly

What are token standards?

What are token standards?

Token standards are a set of regulations and guidelines established that a specific type of token on the blockchain network will operate. These standards clearly define how tokens are created, managed, transferred, and perform other functions on the blockchain network.

Let’s explore some of the token standards with ATOK!

1. How do token standards work?

Token standards operate by establishing rules and standard protocols that tokens must adhere to. Here is how token standards typically work:

1.1 Creating tokens

The standards define how to create new tokens on the blockchain, including data structure, supply quantity, and other properties.

1.2 Transferring tokens

Defining how tokens can be transferred between wallet addresses on the blockchain safely and efficiently.

1.3 Storing tokens

Determining how to store and manage tokens in different types of wallets, ensuring security and convenience for users.

1.4 Token transactions

Regulating how tokens can participate in transactions on the blockchain, including transaction confirmation processes and the validity of transactions.

1.5 Interacting with smart contracts

Token standards guide how tokens can interact with smart contracts on the blockchain, enabling the execution of complex functions and automated condition checks.

The Token Standards Work

The Token Standards Work

2. Common crypto token standard examples

2.1 ERC-721 - Non-Fungible Token Standard

ERC-721 token, also known as Non-Fungible Token (NFT), is a standard token on the Ethereum blockchain. The uniqueness of ERC-721 tokens lies in the fact that each token created is unique, making NFTs a popular tool for representing unique digital assets.

NFTs allow these assets to be guaranteed unique and verifiable in origin, creating a new way to own and trade digital assets.

ERC-721 token -  Non-Fungible Token (NFT)

ERC-721 token - Non-Fungible Token (NFT)

2.2 BEP-20

The BEP-20 standard defines specific rules that a token must adhere to on the Binance Smart Chain. Tokens must have the ability to convert, transfer, and store securely on the Binance Smart Chain network. This ensures compatibility among tokens on the same platform, enabling seamless interaction and operation.

M2E token in the ATOK ecosystem is also known to adhere to the BEP-20 standard (BSC).

What is the M2E token?
BEP-20 standard (BSC)

BEP-20 standard (BSC)

2.3 TRC-20

The token standard on the TRON network is commonly known through the stablecoin USDT. The TRC-20 standard is the token standard on the TRON blockchain network. Similar to the ERC-20 standard on Ethereum and BEP-20 on Binance Smart Chain. The TRC-20 standard defines rules and standards for issuing and managing tokens on the TRON blockchain network.

ERC-20 standard on Ethereum

ERC-20 standard on Ethereum

3. Why are token standards important?

Token standards are important in the blockchain and cryptocurrency space for various reasons:

3.1 Interoperability

Token standards ensure tokens created on a specific blockchain network adhere to predetermined rules and specifications. This compatibility enables tokens to seamlessly interact with wallets, exchanges, and other decentralized applications (dApps) on the same network, making it easy to transfer and utilize tokens.

3.2 Security

Following token standards helps developers create tokens that align with best security practices. Adhering to established standards reduces the risk of vulnerabilities, bugs, and potential exploits in the token code, leading to a secure environment for token holders and users.

3.3 Ease of Development

Token standards provide developers with a structured framework and guidelines for token creation and deployment. This standardized approach simplifies the token development process, saving time and resources by utilizing existing frameworks and libraries.

3.4 Ecosystem Growth

Consistent token standards drive innovation and promote growth within the blockchain ecosystem. Developers, businesses, and users can engage with various tokens, develop new applications, and contribute to the expansion and diversity of the blockchain industry.

4. Sum Up

In conclusion, token standards play a crucial role in promoting interoperability, security, ease of development, user confidence, and ecosystem growth within the blockchain and cryptocurrency space.

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Read the ATOK Blog more:
Understanding CEX (Centralized Exchange): A Future Path For $M2E
Token Vs Coin: What Are The Differences?