What Are Token Standards, Really?
With tens of thousands of cryptocurrencies in circulation, you’d be forgiven for thinking each one is built from scratch. In reality, most tokens follow a small set of shared rules known as token standards.
A token standard is a technical blueprint. It defines how a token behaves on a blockchain, including how it’s transferred, how balances are tracked, and how other apps interact with it. Think of it like USB. You don’t worry whether your mouse will work on a new laptop because the standard takes care of that. Token standards do the same for wallets, exchanges, and decentralized apps.
Without them, every new token would require custom integration. Crypto wouldn’t scale.
Why Token Standards Matter
Interoperability
Standards make tokens instantly compatible with existing infrastructure. When a token follows a known standard, wallets and exchanges already understand how to handle it. That’s why USDT, which uses the ERC-20 standard, works seamlessly on MetaMask, Uniswap, and major centralized exchanges without extra development work.
Composability
DeFi is often described as “Money Legos,” and for good reason. Developers can stack protocols together because they know exactly how a standard token behaves. Lending platforms, DEXs, and yield strategies can all plug into the same tokens without surprises.
Efficiency and security
Standards save time and reduce risk. Developers don’t need to reinvent basic functions like transfers or balance checks. Instead, they rely on battle-tested code libraries, which lowers the chance of bugs and speeds up launches.
The Most Common Ethereum Token Standards
Ethereum was the first major programmable blockchain, and its standards shaped the industry. These same rules are now used across EVM-compatible networks like Polygon, Arbitrum, and Avalanche.
ERC-20: Fungible tokens
Introduced in 2015, ERC-20 is the default standard for fungible tokens, meaning every unit is interchangeable. One token is equal in value and function to another of the same type.
Typical uses include stablecoins like USDC and USDT, governance tokens such as UNI, and utility tokens. Core features include checking total supply and transferring tokens between addresses.
ERC-721: Non-fungible tokens (NFTs)
ERC-721 made NFTs possible. Each token is unique and identified by a specific token ID. Unlike ERC-20 tokens, no two ERC-721 tokens are the same.
This standard is used for digital art, collectibles, gaming assets, certificates, and even on-chain identity records.
ERC-1155: The multi-token standard
ERC-1155 combines fungible and non-fungible tokens into a single contract. It’s especially popular in gaming.
A game can issue gold coins (fungible), batches of identical weapons (semi-fungible), and one-of-a-kind items, all under one standard. It also supports batch transfers, which reduces gas fees.
Token Standards Beyond Ethereum
BNB Smart Chain: BEP-20
BEP-20 closely mirrors ERC-20 but is optimized for BNB Chain’s faster, cheaper transactions. It also supports pegged assets, which represent tokens from other chains.
Solana: SPL tokens
Solana uses a different model. Instead of deploying a new smart contract for each token, all tokens live under a single Token Program. New tokens are created as accounts within it. This design enables high throughput and parallel processing. SPL supports both fungible tokens and NFTs without separate standards.
Bitcoin: BRC-20 and Runes
Bitcoin wasn’t built for tokens, but that changed with Ordinals in 2023.
BRC-20 is an experimental way to issue fungible tokens using text inscriptions on Bitcoin. Runes followed as a more efficient alternative with less on-chain data. Both are still evolving and carry more limitations than smart contract-based systems.
Bridging the Gap Between Chains
Token standards don’t travel well across blockchains. An ERC-20 token on Ethereum can’t natively exist on Solana.
Wrapped tokens
Historically, this problem was solved with wrapping. Assets are locked on one chain and reissued on another, like Wrapped Bitcoin (WBTC) on Ethereum. While effective, bridges have been frequent targets for exploits.
Omnichain tokens
Newer approaches use secure messaging systems instead of locked vaults. Protocols such as LayerZero and Chainlink CCIP support omnichain fungible tokens that move across networks more natively, reducing reliance on centralized custody.
The Bigger Picture
Token standards are the quiet infrastructure behind crypto’s growth. They’re why your wallet works, why DeFi scales, and why new projects can launch quickly.
As the space matures, standards are becoming more flexible and interconnected. Hybrid models and omnichain designs are pushing Web3 toward a future where blockchains don’t feel so isolated.
If you want to go deeper, see related BlockLore guides on ERC-20 tokens, NFT standards, and cross-chain bridges for a more hands-on breakdown.
