Creating a custom token can open up a world of possibilities, from raising capital and enabling loyalty programs to driving decentralized applications (dApps). However, with various token standards available—like ERC-20, BEP-20, and others—choosing the right one can be challenging. Each standard offers unique features suited to specific blockchain environments, making the decision crucial to the success of your project.
In this article, we’ll walk you through the popular token standards, their features, and how to select the best one for your needs.
Understanding Token Standards: ERC-20, BEP-20, and More
Token standards are sets of rules that define how tokens function on specific blockchains. They ensure compatibility, meaning any token following a particular standard can interact seamlessly with other tokens, applications, and smart contracts on the same blockchain. The most popular standards include:
- ERC-20 (Ethereum)
- BEP-20 (Binance Smart Chain)
- ERC-721 and ERC-1155 (NFTs on Ethereum and Binance Smart Chain)
- TRC-20 (TRON)
- SPL (Solana)
Let’s explore each of these standards and their ideal use cases.
- ERC-20: The Ethereum Standard
Overview
ERC-20 is the standard token type on the Ethereum blockchain and was the first widely adopted standard. ERC-20 tokens are fungible, meaning each token is identical and interchangeable with another. This standard is commonly used for tokens in Initial Coin Offerings (ICOs), utility tokens, governance tokens, and rewards systems.
Benefits
- High Security: The Ethereum network is one of the most secure blockchains.
- Developer Ecosystem: Ethereum has the largest community of developers, ensuring robust support and development tools.
- DeFi Integration: ERC-20 tokens are widely accepted in decentralized finance (DeFi) applications, making them highly versatile.
Drawbacks
- High Gas Fees: The Ethereum network can become expensive, especially during times of high demand.
- Scalability: While Ethereum 2.0 promises improvements, current limitations can affect transaction speeds.
Best For
If your project focuses on DeFi or aims to leverage the largest ecosystem in the blockchain space, ERC-20 is likely the best choice.
- BEP-20: The Binance Smart Chain Equivalent
Overview
BEP-20 is Binance Smart Chain’s equivalent of ERC-20, providing similar functionality but with a few unique advantages. BEP-20 tokens operate on the Binance Smart Chain (BSC), known for its low transaction fees and high-speed processing. BEP-20 is ideal for projects that need fast transactions at a lower cost.
Benefits
- Low Transaction Fees: BEP-20 is designed to be cost-effective, making it ideal for high-frequency transactions.
- Interoperability with Ethereum: BEP-20 tokens can be cross-chained with ERC-20, allowing users to transfer tokens easily between Binance Smart Chain and Ethereum.
- Growing DeFi Ecosystem: BSC is home to a rapidly growing DeFi space with popular dApps like PancakeSwap.
Drawbacks
- Centralization Concerns: BSC is more centralized than Ethereum, with Binance maintaining a higher degree of control over its network.
- Limited Developer Community: Although growing, the BSC developer community is still smaller than Ethereum’s.
Best For
If you need a cost-effective token for DeFi applications, high-frequency transactions, or simply want to leverage Binance’s large user base, BEP-20 is a great choice.
- ERC-721 and ERC-1155: The NFT Standards
Overview
ERC-721 and ERC-1155 are standards for non-fungible tokens (NFTs) on Ethereum. ERC-721 represents unique assets (such as digital art), while ERC-1155 allows both fungible and non-fungible tokens in a single contract, making it highly flexible for gaming and collectibles.
Benefits
- Unique Asset Representation: Perfect for creating unique digital assets or collectibles.
- Ethereum Ecosystem Integration: Since these standards are on Ethereum, they benefit from wide adoption and integration across marketplaces and applications.
Drawbacks
- High Gas Fees: Similar to ERC-20, gas fees can be high on Ethereum.
Best For
Choose ERC-721 or ERC-1155 if your project involves NFTs, such as digital art, collectibles, or gaming assets.
- TRC-20: TRON’s Token Standard
Overview
TRC-20 is TRON’s equivalent of ERC-20. Known for its high speed and low-cost transactions, TRC-20 is ideal for applications that prioritize performance and low fees.
Benefits
- Low Transaction Fees: TRC-20 is known for being very affordable.
- High Transaction Speed: TRON’s high throughput makes it ideal for applications needing quick processing.
Drawbacks
- Limited DeFi Adoption: TRON’s DeFi ecosystem is smaller than Ethereum’s or Binance’s, potentially limiting integrations.
Best For
If you want fast transactions with minimal fees and are open to working in TRON’s ecosystem, TRC-20 may be a good choice.
- SPL: Solana’s Token Standard
Overview
SPL is the token standard for Solana, a blockchain known for high throughput and low transaction fees. SPL tokens are gaining popularity in fast, scalable applications such as DeFi and gaming.
Benefits
- Ultra-fast and Low-cost Transactions: Solana processes transactions quickly and at a fraction of the cost of Ethereum.
- High Scalability: Solana’s architecture supports thousands of transactions per second, making it suitable for high-demand projects.
Drawbacks
- Early-stage Ecosystem: Solana’s ecosystem, while growing, is newer and may not have the same level of support as more established blockchains.
Best For
If your project needs to scale rapidly and can leverage Solana’s fast, low-cost infrastructure, SPL might be your best option.
Which Standard Should You Choose?
To select the right token standard, consider the following:
- Transaction Speed and Cost: If low fees and high transaction speeds are essential, consider BEP-20, TRC-20, or SPL.
- Security and Decentralization: For a more decentralized and secure network, ERC-20 may be best, despite the higher costs.
- Ecosystem and Integration: If you need access to a robust DeFi ecosystem, ERC-20 or BEP-20 would be optimal choices.
- NFT Creation: For unique assets like digital art or collectibles, ERC-721 or ERC-1155 are the most compatible standards.
How DeployTokens.com Can Help
DeployTokens.com makes it simple to create tokens on various blockchains, supporting ERC-20, BEP-20, and other major standards. With an easy-to-use interface and quick deployment process, we ensure you can focus on your project goals rather than getting bogged down by technical details.
Choosing the right token standard is a foundational step in your blockchain journey. With DeployTokens.com, you have the tools and guidance to make the best choice and bring your vision to life.