Ethereum's innovation has been fueled not just by smart contracts but also by token standards—defined interfaces that let developers build interoperable assets. These standards govern how tokens behave, transfer, and interact with wallets and dApps.
In this post, we'll break down four core Ethereum token standards: ERC-20, ERC-1155, ERC-6909, and ERC-7281. Whether you're a developer, investor, or curious observer, understanding these standards helps decode how the Web3 economy operates.
ERC-20: The Fungible Token Blueprint
Launched in 2015, ERC-20 is the original token standard for Ethereum. It defines a set of functions for fungible tokens—tokens that are identical and interchangeable, like currency.
Key Features:
- Each token contract represents one asset type
- Functions:
transfer,approve,transferFrom,balanceOf,totalSupply - Widespread adoption in DeFi, DAOs, and ICOs
Use Cases:
- Stablecoins (e.g., USDC, DAI)
- Governance tokens (e.g., UNI, AAVE)
- Wrapped assets (e.g., WBTC)
Limitations:
- No batch operations
- One contract = one asset
- Not suitable for NFTs or multi-token systems
ERC-1155: Multi-Asset, Multi-Use
Introduced by Enjin in 2018, ERC-1155 is a multi-token standard that allows a single contract to represent multiple token types—both fungible and non-fungible.
Key Features:
- Supports batch operations
- Combines NFTs and fungibles in one contract
- Efficient minting and transferring of multiple assets
Use Cases:
- Gaming (e.g., weapons, armor, currency in one contract)
- Digital collectibles
- Metaverse economies
Trade-offs:
- More complex to implement
- Requires
safeTransferFromandonERC1155Receivedcallbacks for safe interactions
ERC-6909: The Lean Multi-Token Standard
ERC-6909 is a newer, lightweight alternative to ERC-1155, ideal for DeFi protocols that need to represent multiple fungible asset types efficiently.
Key Features:
- Minimal interface for managing multiple token types
- No mandatory callbacks
- Built-in per-token allowances (vs. global approvals only in 1155)
- More gas-efficient than both ERC-20 and ERC-1155
Use Cases:
- Vault shares
- LP tokens (e.g., used in Uniswap v4 PoolManager)
- Tokenized funds with multiple classes
Why It Matters:
ERC-6909 offers a simpler, developer-friendly way to manage fungible assets at scale—without the operational overhead of ERC-1155.
ERC-7281: Cross-Chain Token Identity
ERC-7281 introduces a standardized interface for identifying tokens across chains by embedding the chainId into the token's interface.
Why it matters:
As multichain ecosystems grow, ambiguity in token identity becomes a major problem. For example, USDC on Ethereum L1 and USDC on Arbitrum may be totally different tokens. ERC-7281 helps prevent confusion, spoofing, and misrepresentation in dApps, bridges, and explorers.
Key Features:
- Adds
chainId()function to token interfaces - Extends
symbol(),name(), anddecimals()with optionalchainId-aware context - Helps wallets and protocols differentiate tokens across L1s, L2s, and sidechains
- Aids in bridge security and cross-chain composability
Use Cases:
- Cross-chain token registries
- Safe bridging and token routing
- dApps displaying accurate token info across chains
Compatibility:
ERC-7281 is complementary to ERC-20, ERC-1155, and even ERC-6909. It doesn't replace them—it enhances them by giving tokens global uniqueness.
Updated Comparison Table
| Feature | ERC-20 | ERC-1155 | ERC-6909 | ERC-7281 |
|---|---|---|---|---|
| Token Types | 1 Fungible | Many (Fungible + NFTs) | Many (Fungible) | Any (extension) |
| Batch Operations | ❌ | ✅ | ❌ | N/A |
| Transfer Callbacks | ❌ | ✅ | ❌ | N/A |
| NFT Support | ❌ | ✅ | ❌ | ❌ (enhancement) |
| Approval Model | Per-address | Global operator | Global + Per-ID | N/A |
| Cross-Chain Awareness | ❌ | ❌ | ❌ | ✅ via chainId() |
| Gas Efficiency | Medium | High | Highest | Depends on base |
| Usage | Tokens | Games, NFTs | DeFi vaults | Wallets, bridges |
Final Thoughts
Each Ethereum token standard serves a specific purpose:
- ERC-20 is perfect for simple fungible assets.
- ERC-1155 shines in multi-asset and NFT-rich environments like games.
- ERC-6909 introduces a powerful, efficient pattern for multi-token DeFi applications.
- ERC-7281 provides crucial cross-chain identity and uniqueness for tokens across the ecosystem.
The evolution of these standards reflects Ethereum's versatility—and the growing demands of developers to build faster, leaner, and more composable financial infrastructure.
If you're building dApps, wallets, or protocols, choosing the right token standard isn't just a technical decision—it's a product design choice. Pick wisely.