Why A New Token Standard on Ethereum?
Ethereum is the world computer with token standards like ERC-20, ERC-777, ERC-721, ERC-1155, ERC-4626, ERC-1155, and now D/Bond’s ERC-3475
Ethereum built to be the world’s computer
You might have heard of token standards. They make building decentralised applications — most of which run on Ethereum — easier.
Imagine Ethereum as the world computer: a perfect and universal machine that is accessible from anywhere by anybody. A platform that lets you carry out all tasks, including trades, contractual agreements, and payments. And it always gives the same results to everybody.
The Ethereum network lets developers build — independently or collaboratively — using Application Programming Interfaces (APIs). These APIs handle everything that happens on-chain. They make up the mechanism that integrates different protocols. APIs facilitate the borrowing, lending, and collateralisation of assets. Developers use them to simplify how they interface with their users through a process called abstraction — where complexity is managed to bring out developers’ ingenuity to separate an idea from generalised concepts.
The process kickstarts the building of complex applications that are integrated broadly using APIs for users across borders, timezones, and geopolitics to interact with simplified world-changing ideas.
APIs also help with the transfer of assets and building investments that are composable — combining two components to create something better.
ERC-721 for Non-Fungible Tokens (or NFTs)
Token Standards on Ethereum
One of the ways that composability manifests on the Ethereum network is through token standards. A token standard is a piece of code that makes all tokens of a particular kind conform to an API template. Token standards allow any improvement(s) to be tied to existing infrastructure. In short, they make the build-up of new ideas and adding value possible in the Ethereum — world computer — ecosystem.
The most basic token standards are ERC-20 tokens. They constitute the vast majority of tokens today including fiat-backed stablecoins. There are ERC-721 tokens known mainly as Non-Fungible Tokens (or NFTs). They represent unique digital rights ownership of works like collectible arts.
There are also ERC-1155 tokens that combine properties of both ERC-20 and ERC-721 tokens, creating unique properties for the gaming industry. The ERC-4626 is a new addition for yield farming and aggregation, while the rarely-used ERC-777 token standard enables developers to attach code when transacted.
Each token type brought about by a new Ethereum Improvement Proposal (EIP) — along with its core protocol specifications, APIs, and a contract standard — makes the Ethereum network more sophisticated. Each new standard comes with more functionality as well as increased value.
New ERC-3475 Expands Ethereum
D/Bond’s ERC-3475 is the latest token standard to expand Ethereum. The new standard has joined the race to solve a universal problem, the lack of tradable derivatives and bonds on the blockchain. ERC-3475 comes with characteristics that make storing additional metadata possible.
D/Bond shows how decentralised bonds could open a whole new universe of possibilities for many across the globe.