Ethereum ERCs — What Are They and Which Should You Know?
If you are like me with a non-technical familiarity of blockchain dApps and cryptocurrency, you have probably come across the ERC20 token, Ethereum’s revolutionary driver behind Initial Coin Offerings (ICOs) for blockchain-related startups like Golem, district0x, OmiseGo, and many more. Recently the name ERC721 has become the topic of conversation, typically pertaining to CryptoKitties. From my personal experience investing in ERC20 tokens and experience helping clients to build token platforms at decent, curiosity was piqued after seeing the latter ERC which forced me to ask two questions:
“What exactly is an ERC?”
“Should I be familiar with other ERCs?”
So naturally did some research to find answers to both.
What are ERCs?
To understand ERCs role in the Ethereum ecosystem, it is important to first have familiarity of Ethereum Improvement Proposals (EIPs) which were inspired by Bitcoin Improvement Proposals (BIPs). Like the name states, EIPs are proposals submitted by developers to the Ethereum community and Core developers for new features or improvement of processes and the environment. From there, a successful EIP lives in one of five different statuses — Work in Progress (WIP), Draft, Last Call, Accepted (Core EIPs only), Final. An EIP Editor (one of six, see below) must agree to take the EIP to the next state. Read more documentation on the EIP process and expectations for proposals here.
EIP Editors
· Nick Johnson (@arachnid)
· Casey Detrio (@cdetrio)
· Hudson Jameson (@souptacular)
· Vitalik Buterin (@vbuterin)
· Nick Savers (@nicksavers)
· Martin Becze (@wanderer)
Here’s a list of all EIPs broken by type.
Ethereum Request for Comment (ERCs) live as a subtype of EIPs and are the Ethereum equivalent to RFC (Request for Comments) which were established by the Internet Engineering Task Force (IETF) during the ARPANET days (the Internet’s beginning). ERCs provide application-level standards and conventions, which can include contract standards like token standards, wallet formats, name registries, URI schemes, and library/package formats.
A Protocol Becomes a Standard
While in Draft status, an ERC proposal must be implemented, and the author must feel the EIP to be mature in order to be placed in Last Call status. The protocol is promoted to Final status and made a standard if no material changes or unaddressed complaints arise from Core developers and community members in the Last Call status. According to this list from the Ethereum Foundation, there are 34 ERCs in the Draft status and 8 which have been promoted to Final at the time of this article being published.
5 ERC Type EIPs to Know
Final ERCs
ERC20
Authored by the Ethereum Foundation’s Vitalik Buterin and Fabian Vogelsteller, the most well-known of the ERCs - the EIP 20: ERC20 Token Standard, was created in November of 2015 becoming the widely adopted standard interface for tokens. Since then, hundreds of companies (mostly in the blockchain space) have raised millions of dollars in a matter of minutes by utilizing the standard to create tokens to be used on their respective platforms in the future.
Examples: EOS, 0x, Basic Attention Token (BAT)
ERC721
What is the difference between a Golem Network Token (GNT) and a CryptoKitty? An ERC20 token like GNT is a fungible asset — all tokens are identically the same and there is nothing to differentiate between one GNT and the next — like gold. Meanwhile an ERC721 token like those utilized in CryptoKitties are completely unique — think a trading card or a house. EIP 721 was introduced in January of 2018 and was promoted to Final a few months later in June due to its proven value with dApps like CryptoKitties.
Examples: CryptoKitties, CryptoCup, OxCert
EIP 137: Ethereum Domain Naming Service — Specification
Authored in April of 2016 by the Ethereum Foundation’s Nick Johnson and implemented in March 2017, EIP 137 introduced the world to the ENS Domain service. With the service, anyone with an Ethereum address can receive a unique, word-like identifier for the address. Instead of sending ETH to address 0x2F453… and potentially miscopying the receiving address, a user can simply type decent.ENS into the address bar and it would instantly acknowledge decent’s Ether wallet. Like most new products, ENS domains were a hit when they were first released but the market for the names has since quieted in recent months.
Draft Status
EIP 918: Mineable Token Standard
EIP 918 was introduced earlier in 2018 and provides a protocol for a mineable token. Unlike ERC20s where all tokens are available upon token release, the Mineable Token Standard promotes a proof-of-work (PoW) mechanism just as there is for Bitcoin or Ethereum with a goal of reducing gas rates and control the distribution rate. While this provides a more decentralized manner of releasing tokens in an ICO, PoW has resulted in environmental concerns with the amount of energy mining rigs consume. While renewable energy PoW mining would be the ideal solution in the long run, this option is not avaialble in most reaches of the world on a large scale and this concern may be a factor to whether or not EIP 918 becomes a standard.
Example: 0xBitcoin
EIP 1154: Oracle Interface
One of more recent EIPs in the Draft status, EIP 1154 was authored in June of 2018 by Alan Lu to provide a standard for oracles interacting with Ethereum smart contracts to provide off-chain data as is common for prediction markets like CryptoCup or Augur. Lu argues that while there is many different platforms (ChainLink & Oraclize) a set standard with a unified interface would be of great benefit to the community. EIP 1154 also provides proposals of how to deal with report-resolving transactions via push (state changes to the contract) or pull (updated oracle changes). Do you want to dig deeper into this proposal? Since it is in the Draft status you can by first reading the GitHub in more depth and then comment with any concerns or questions you have with the proposal.
decent’s CTO, Adam Gall, authored a technical dive into oracles on our blog which can be found here.
One of the great things about the transparent nature of blockchain is the Ethereum community’s willingness to add the same level of clearness to the development of thoughts and changes moving forward. Just as you can go into an EIP and comment on changes you would like to see for a specific ERC you can also go back to EIPs that are now standard to read a historical log of all comments and concerns that were addressed prior to the ERC being promoted to Final status.
As time goes on I expect the EIP list to grow and adapt to the state of the community. I highly recommend those that are interested in Ethereum’s future to stay in the loop of the Draft status EIPs and even contribute if you feel yourself to be capable.
