Getting Comfortable with Token Standards
An in-depth comparison between TRC10 and TRC20, and how they relate to ICOs
Token nomenclature can get confusing, and it can be hard to keep up with the seemingly ever-evolving standards. In this TRON focused post, I’ll be giving you a technical overview of both the TRC10 and TRC20 tokens, as well as their purpose in relation to ICOs. By the end, you should have a much deeper understanding of not just these two types of TRX tokens, but how cryptocurrency tokens and smart contracts work in general.
You may have never heard of TRC10 tokens before, but they have been available since the launch of the TRON mainnet. Since the more recent TVM launch, the name has been introduced to distinguish them from their new TRC20 cousin.
TRC10 is widely supported, and if you currently have any kind of TRX token, chances are it’s a TRC10 token. That’s because this standard makes it incredibly easy to do an ICO (creating your own custom TRC10 token). It requires no programming knowledge of any kind. In fact, all that’s requires is having 1024 TRX in your wallet, and going through a few simple steps on the TronScan page.
This makes it a perfect initial token to create in order judge interest in your project. Another major benefit is that sending TRC10 tokens is free in most cases, only costing bandwidth (obtained by holding TRX and freezing it).
With the launch of the TVM, the TRON protocol enabled support for Ethereum Smart Contracts, enabling developers to start porting their Ethereum contracts to TRON. Tokens on the Ethereum network are Smart Contracts based on the ERC20 Token Standard. This standard defines the rules that a Token should conform to. This way, wallets don’t have to handle each token differently.
Smart Contracts provide endless possibilities, and a TRC20 token can implement extra logic which isn’t possible with standard TRC10 tokens. A few key differences are that transferring a TCX20 token consumes both Bandwidth and Energy. The token may also be transferred in fractions, like sending a Satoshi.
This enables ICOs to have numerous custom rules and rewards for users, such as stretch goals. In short, TRC20 is more complicated, harder to set up, and not as widely supported yet — but it is much more powerful and customizable.
Migrating from TRC10 to TRC20
Currently, there is no clear migration path for converting TRC10 tokens to TRC20, because TRC10 is not supported in smart contracts yet. It requires custom code to read TRC10 transactions and trade it with TRC20 tokens — meaning there is no clear-cut solution.
At a later stage, TRON may provide the tools to simplify this process.
Which one do I need when starting an ICO?
When starting an ICO there are several things to consider when choosing between the use of TRC10 or TRC20 tokens.
The ease of creating TRC10 tokens helps when you just want to run a prototype and check if there is any interest for your idea before investing in hiring a programmer for deploying a TRC20 token. Starting a TRC10 token doesn’t require any programming knowledge but does not provide the flexibility of smart contracts logic. TRC10 ICO’s are supported by most wallets and users will be able to buy your token during the ICO period from the wallet they already know.
The downside is that the supply of TRC10 tokens can’t be increased after the token has been created. Tokens can be burned by sending them to the TRON burn address.
In some cases you want your ICO to have more complex distribution rules, or you need your token to be able to be sent in fractions. In these cases, the flexibility of TRC20 is a better option. Deploying a TRC20 token requires knowledge of deploying smart contracts, which is not very straightforward with the currently available tools.
If you can manage this, however, smart contracts allow you to set different rules, for examples set a bonus period where users participating in your ICO receive more tokens if they buy early. Smart contracts also allow you to mint extra tokens at a later time, solving the limitation issue faced when using TRC10.
That’s it! It’s up to you which token standard you choose to use should you want to do an ICO, as each has its own benefits and shortcomings. I hope this post has shed some light on the topic and given you a clearer picture of what using either of these token types entails.
Note: The TRON Team has informed us that the nomenclature for the network token standards has been updated to TRC10 and TRC20.
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