// GLOSSARY -- BLOCKCHAIN & CRYPTO FUNDAMENTALS

What is Token Standard?

1 min read Updated

A token standard is a specification defining how tokens behave on a blockchain — including required functions, events, and interfaces that ensure interoperability across wallets, exchanges, and DeFi protocols.

WHY IT MATTERS

Token standards are what make the crypto ecosystem interoperable. Because USDC, UNI, and LINK all follow ERC-20, every wallet, DEX, and lending protocol works with all of them. Standards eliminate the need for custom integration per token.

Major standards: ERC-20 (fungible tokens), ERC-721 (NFTs), ERC-1155 (multi-token), and ERC-4626 (tokenized vaults). Each defines the interface that contracts must implement.

New standards emerge to solve new problems: ERC-4337 for account abstraction, ERC-6551 for token-bound accounts, and various proposals for improved token functionality.

FREQUENTLY ASKED QUESTIONS

Why do standards matter?
Interoperability. A DEX doesn't need custom code for each token — if it follows ERC-20, it works. This composability is what makes DeFi possible.
Can tokens follow multiple standards?
Yes — ERC-1155 tokens can be both fungible and non-fungible. Some tokens implement ERC-20 extensions (ERC-2612 for permits). Standards are composable.
Who creates token standards?
Anyone can propose an ERC through the EIP process. Standards are adopted through community consensus — if enough projects implement it, it becomes the standard.

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