Differences in token standards between the top 10 blockchains and what they do

Token standards are rules and protocols that determine how tokens function on a blockchain. Different blockchains have their own token standards to ensure interoperability, security and efficiency. Here are some of the key token standards in the top 10 blockchains Turing complete environments Ethereum, Solana, BNB and XRP:

Ethereum token standards

Ethereum has developed many token standards to facilitate the creation and management of digital assets. These standards ensure that tokens are interoperable with various decentralized applications and services within the Ethereum ecosystem.

1. CER-20: The ERC-20 standard is the most used to create fungible tokens on the Ethereum blockchain. These tokens are interchangeable with each other, making them suitable for currencies, staking tokens, and utility tokens. ERC-20 tokens follow a set of rules that include how tokens can be transferred, how transactions are approved, and how users can access data on a token.
2. ERC-721: This standard is used to create unique, non-interchangeable NFTs. ERC-721 tokens are commonly used for digital art, collectibles, and other unique assets. Each token has a unique identifier, which distinguishes it from other tokens.
3. ERC-777: The ERC-777 standard improves on ERC-20 by allowing more complex interactions, such as sending tokens to a contract and notifying the contract in a single transaction. It also includes features for increased privacy and security, addressing some of the limitations of the ERC-20.
4. ERC-1155: This multi-token standard allows you to create fungible and non-fungible tokens within a single contract. The ERC-1155 supports batch transfers, which can reduce transaction costs and network congestion. This standard is beneficial for applications that require management of multiple token types.
5. ERC-4626: Designed for tokenized deposits, ERC-4626 optimizes and unifies the technical parameters of yield deposits. This standard aims to simplify the creation and management of deposits that generate returns on deposited assets.

6. DN-404: DN-404, or “Divisible NFT-404”, is an experimental standard designed to address the limitations of ERC-404 by improving the efficiency, scalability, and interoperability of tokenized assets. DN-404 uses a bifurcated approach with base ERC-20 tokens representing fractions of NFTs and mirror ERC-721 tokens representing actual NFTs. This design improves transaction throughput, reduces costs, and facilitates cross-chain transactions.

Solana Token Standard

Solanaknown for its high-speed, low-cost transactions, it has developed its own set of token standards to support its growing ecosystem of decentralized applications and digital assets.

1. SPL (Solana Program Library): The SPL token standard is used for fungible and non-fungible Solana blockchain tokens. Unlike Ethereum, which has separate standards for different token types, SPL uses a unified approach where differences are defined at the token creation stage. This standard ensures that SPL tokens are interoperable with Solana wallets and smart contracts.
2. Token-2022: An enhancement to the SPL standard, Token-2022 introduces new features such as interest-bearing tokens and improved transfer capabilities. This standard aims to provide greater flexibility and advanced functionality for developers and users on the Solana blockchain.

BNB (Binance Smart Chain) token standard.

Binance Smart Chain (BSC) has developed token standards to support its ecosystem of decentralized applications and services. These standards are designed to be compatible with Ethereum’s ERC standards, facilitating cross-chain interoperability.

1. BEP-2: The BEP-2 standard is used for tokens on the original Binance Beacon Chain, mainly for the native BNB coin and other tokens on the Binance decentralized exchange. BEP-2 tokens follow a set of rules that ensure they can be easily traded and managed on Binance Chain. This chain is currently under construction sunset.
2. BEP-20: This standard is used on BSC and is compatible with the Ethereum ERC-20 standard. BEP-20 allows you to create various types of tokens, including utility tokens, stablecoins, and more. BEP-20 tokens can be easily exchanged for BEP-2 tokens, providing flexibility and interoperability within the Binance ecosystem.

XRP Ledger Token Standard

THE XRP Ledger, designed for fast and efficient cross-border payments, has its own standards for creating and managing tokens.

1. XRP: The native token of the XRP Ledger, XRP is used for transactions and as a bridge currency for cross-border payments. Unlike other token standards, XRP itself does not follow a specific token standard like ERC-20 but is an integral part of the XRP Ledger’s operations.
2. XLS (XRP ledger standard): These standards describe the specifications and protocols for creating and managing tokens on the XRP Ledger. XLS standards ensure interoperability and compatibility within the XRP ecosystem, facilitating the creation of various types of tokens, including fungible and non-fungible tokens.

Key differences

• Interoperability and ecosystem: Ethereum ERC standards are highly specialized and have a broad ecosystem, making them suitable for various applications but often involving increased complexity and gas costs. Solana’s SPL standard is more unified and offers lower transaction fees and faster settlement times, which is beneficial for high-yield applications. BNB’s BEP standards are designed to be compatible with Ethereum’s ERC standards, facilitating cross-chain interoperability. The XRP Ledger XLS standards focus on ensuring interoperability within the XRP ecosystem.
• Transaction costs and speed: Ethereum is known for higher transaction costs and slower processing times, especially during network congestion. Thanks to its unique consensus mechanisms, Solana offers significantly lower fees and faster transactions. BNB Smart Chain also offers lower transaction costs than Ethereum, while XRP Ledger is optimized for fast and efficient cross-border payments.
• Token types and flexibility: Ethereum offers a variety of token standards for different use cases, including fungible tokens (ERC-20), non-fungible tokens (ERC-721), multi-tokens (ERC-1155), and hybrid tokens (DN-404) . Solana’s SPL standard combines fungible and non-fungible token functionality within a single protocol. BNB’s BEP-20 standard extends the functionality of ERC-20, while XRP Ledger’s XLS standards provide a framework for fungible and non-fungible tokens.

Each token standard plays a crucial role in their respective blockchain ecosystems, enabling the standardized and interoperable creation, management and transfer of digital assets.

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