ICO token sale: Understanding Ethereum token standards

An insight into 3 most popular Ethereum token standards
If you are familiar with cryptocurrency and ICO, you are more likely to have an idea about tokens. For those who are new to this domain, a token is a special type of virtual currency that serves as a transaction unit. These virtual currencies reside on a blockchain developed using the standard template, such as Ethereum, EOS, Cardano, Tezos, and more, allowing users to create their own tokens.

Token creation has opened the door to new fundraising opportunities, empowering start-ups and even enterprises with innovative ideas to raise required money to fund their projects. These tokens are benefiting investors as much as they are favoring businesses. As tokens follow the limited supply-demand principle, their value rises in the future, resulting in significant profits for the investors.

Out of the different token creation platforms aforementioned, Ethereum is the most dominant because of its benefits like faster block creation time, smart contract creation, etc. The Ethereum platform has different standards for token creation and it can be helpful to get a grasp of these standards, especially if you are planning to enter into the token market, either as a company for fundraising or as an investor to participate in ICO token sale.


Launched in 2015, the ERC20 standard comprises certain set of rules to be deployed by a particular Ethereum based token. ERC20 tokens are a special form of smart contracts that use Ethereum’s blockchain.

Before the release of ERC20, a specific implementation standard was required to develop and launch tokens on the Ethereum platform, which involved considerable time and efforts of the coders. Thanks to Ethereum’s smart contract standards and more efficient protocol, the entire process has become easier.

The introduction of ERC20 standard brought a remarkable revolution in the crypto market and paved the way for a myriad ICO projects worldwide.


The ERC-223 standard was created to address the shortcomings of ERC-20 standard. For example, ERC-223 improved the efficiency of transferring tokens, as the standard requires only half the gas compared to ERC-20 tokens. Gas is the unit to measure the amount of computational effort needed for the implementation of particular functions within the Ethereum network.

ERC-223 focuses on security, resolving another critical bug of ERC-20, by using the ‘transfer’ function to prompt an error for every invalid transfer. This terminates the transaction, preventing the loss of funds that likely occurs in case of ERC-20 standard when the tokens are mistakenly sent to the wrong smart contract address.


The main aspect that differentiates ERC-721 from other Ethereum standards is its ability to create non-fungible tokens that can have different values when they are exchanged within the same ecosystem. This allows tokenization of traditional real-world assets like real estate, historical items, artwork, and more.

The ERC-721 standard was launched to permit anyone to create unique tokens on the Ethereum platform; each ERC-721 token is one of its kind.

Other ERC token standards

The Ethereum platform has many other standards like ERC-777, ERC-820, ERC-827, ERC-884, ERC-948, and more. Each one of these comes with its own features, pros and cons.

The token creation standard can make or break the ICO project. Whether you want to create your own token, or want to take part in ICO token sale, considering token standard is extremely essential to ensure that your money is going into the right project.

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