So, You're ready to launch your blockchain project, but then it hits you that "Which token standard do I even use?"
Choosing between ERC-20, ERC-721, and ERC-1155 isn't just a technical checkbox. Pick the right one, and you'll save thousands in gas fees. Pick the wrong one? You'll learn some expensive lessons.
Let me break this down in plain English.
ERC-20: Your Digital Dollar
ERC-20 is all about fungibility—fancy word for "interchangeable." Just like your $20 bill equals my $20 bill, one USDT always equals another USDT.
When to use ERC-20:
- Stablecoins (USDT, DAI)
- DeFi and governance tokens (UNI, AAVE)
- Utility tokens for dApp access
- Supply chain tracking of bulk goods
Every token is identical, divisible, and universally supported by wallets and exchanges. Simple, battle-tested, and perfect for anything that acts like money.
The trade-off? Gas fees add up with multiple transfers, and you can't represent unique items.
ERC-721: Where Every Token Is Unique
Remember the NFT boom with CryptoPunks and Bored Apes? That's ERC-721—the standard that made non-fungible tokens possible.
When to use ERC-721:
- Digital art and collectibles
- Virtual real estate (Decentraland)
- Domain names and digital IDs
- Luxury goods authentication
Each token has its own ID, metadata, and ownership history. Perfect when uniqueness and provenance matter most.
The catch? Higher gas fees because each token needs separate handling. Minting 1,000 NFTs = 1,000 individual transactions.
ERC-1155: The Game-Changer
Here's where things get interesting. ERC-1155 handles fungible, non-fungible, AND semi-fungible tokens—all in one smart contract.
Created by Enjin in 2018, this standard is like a Swiss Army knife. It supports batch operations, meaning you can send 100 different tokens in ONE transaction.
When to use ERC-1155:
- Gaming ecosystems - Manage coins, weapons, and potions in one contract
- Large airdrops - Distribute multiple tokens to thousands of users efficiently
- Limited editions - Mint 10,000 identical items without 10,000 separate transactions
- Complex marketplaces - Mix different asset types seamlessly
The magic? Studies show ERC-1155 can reduce gas costs by up to 97% compared to other standards. For a game with 50 item types and 10,000 total items, you're looking at a dozen transactions instead of 10,000.
Quick Decision Guide
Choose ERC-20 if you're creating currency, governance tokens, or anything where every unit is identical. Maximum compatibility, simple implementation.
Choose ERC-721 if uniqueness is your selling point—rare collectibles, digital art, or unique assets where provenance matters more than gas costs.
Choose ERC-1155 if you're building at scale, need multiple asset types, or want serious gas savings. It's the go-to for modern games, marketplaces, and complex dApps.
The Gas Fee Reality Check
Imagine launching a game with 10,000 items:
- ERC-721: 10,000 separate transactions, astronomical gas fees
- ERC-20: Need 50 different contracts for 50 item types
- ERC-1155: One contract, batch operations, 97% gas savings
For blockchain startups watching their budget, those savings aren't just nice—they're survival.
The Bottom Line
There's no "best" standard but only the best one for YOUR project.
ERC-20 is your workhorse for financial apps. ERC-721 is your showcase for unique collectibles. ERC-1155 is your efficiency powerhouse for multi-asset ecosystems. In 2025, new projects are gravitating toward ERC-1155 for its flexibility and cost savings. But don't just follow trends—choose based on what your users need and what your project actually does.
Pro tip: Always use OpenZeppelin libraries. They provide audited, battle-tested implementations that save you from security nightmares.
Ready to build something amazing? Now you know exactly which standard to choose.
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