ERC, short for Ethereum Request for Comment, comes in many forms, including registries, package formats, libraries, and token standards. Since Ethereum is an open-source protocol, anyone with knowledge of Solidity can submit their own ERC. However, not every new ERC version gets approved, as it is the original creator’s responsibility to explain their ERC properly to the community and garner support.
Several well-known ERC types include ERC-20, ERC-777, and ERC-721. ERC-20 is one of the most common ERC types and what most tokens on Ethereum use. ERC-777, meanwhile, aims to improve upon the ERC-20 token functionality, but is less common and also comes with additional risks, such as more susceptibility to malicious attacks. ERC-721 is the standard used for non-fungible tokens (NFTs).
Benefits include:
- ERC tokens help developers by giving them a base of proven code — rather than from scratch — when building projects.
- As token standards, the ERC group allows for faster deployment of projects because it follows a certain template (i.e., standard).
- ERC functionality allows smart contract applications to have oracles built on top of them, creating a more robust and easier-to-digest interface.
