{"id":3613,"date":"2022-12-14T11:23:22","date_gmt":"2022-12-14T11:23:22","guid":{"rendered":"https:\/\/metaschool.so\/articles\/?p=3613"},"modified":"2023-01-13T11:01:18","modified_gmt":"2023-01-13T11:01:18","slug":"erc-4626-token-standard","status":"publish","type":"post","link":"https:\/\/metaschool.so\/articles\/erc-4626-token-standard\/","title":{"rendered":"What is the ERC-4626 token standard?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_56_1 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/metaschool.so\/articles\/erc-4626-token-standard\/#Characteristics_of_the_token_standard\" title=\"Characteristics of the token standard\">Characteristics of the token standard<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/metaschool.so\/articles\/erc-4626-token-standard\/#Features_of_ERC-4626\" title=\"Features of ERC-4626\">Features of ERC-4626<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/metaschool.so\/articles\/erc-4626-token-standard\/#Benefits_of_ERC-4626\" title=\"Benefits of ERC-4626\">Benefits of ERC-4626<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/metaschool.so\/articles\/erc-4626-token-standard\/#1_Improved_security\" title=\"1. Improved security\">1. Improved security<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/metaschool.so\/articles\/erc-4626-token-standard\/#2_Transparency\" title=\"2. Transparency\">2. Transparency<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/metaschool.so\/articles\/erc-4626-token-standard\/#3_Simplified_codebase\" title=\"3. Simplified codebase\">3. Simplified codebase<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/metaschool.so\/articles\/erc-4626-token-standard\/#4_Easier_token_creation\" title=\"4. Easier token creation\">4. Easier token creation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/metaschool.so\/articles\/erc-4626-token-standard\/#5_Increased_liquidity\" title=\"5. Increased liquidity\">5. Increased liquidity<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/metaschool.so\/articles\/erc-4626-token-standard\/#Comparison_with_other_token_standards\" title=\"Comparison with other token standards\">Comparison with other token standards<\/a><\/li><\/ul><\/nav><\/div>\n\n<p>ERC-4626 token standard is an open source token standard designed to make it easier to interact with, manage, store, and trade tokens on the <a href=\"https:\/\/metaschool.so\/blockchain\/ethereum\" target=\"_blank\" rel=\"noreferrer noopener\">Ethereum blockchain<\/a>. It was created in 2019 by the Ethereum Foundation and is based on the <a href=\"https:\/\/metaschool.so\/articles\/erc-20-token\/\">ERC-20 token standard.<\/a><\/p>\n\n\n\n<p>The purpose behind it was to provide a standard interface for interacting with tokens, allowing developers to create applications that can interact with any token that conforms to the standard. It was approved by the <a href=\"https:\/\/eips.ethereum.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">Ethereum Improvement Proposal (EIP)<\/a> process and is now a widely adopted token standard.<\/p>\n\n\n\n<p>ERC-4626 enables users to tokenize real-world assets such as digital art, gaming items, and collectibles. It provides a standard interface to interact with tokens, allowing developers to <a href=\"https:\/\/metaschool.so\/courses?ref=Articles&amp;utm_source=Blog_Organic\" target=\"_blank\" rel=\"noreferrer noopener\">create web3 applications<\/a> that can interact with any token that conforms to the standard.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"characteristics-of-the-token-standard\"><span class=\"ez-toc-section\" id=\"Characteristics_of_the_token_standard\"><\/span>Characteristics of the token standard<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The ERC-4626 token standard is an open source token standard that provides interoperability between tokens, allowing tokens to be used together in applications.<\/p>\n\n\n\n<p>\u2022 It provides a standard interface for interacting with tokens, allowing developers to create applications that can interact with any token that conforms to the standard.<\/p>\n\n\n\n<p>\u2022 It enables users to tokenize real-world assets such as digital art, gaming items, and collectibles.<\/p>\n\n\n\n<p>\u2022 It provides built-in support for token transfers between users, as well as token burning and minting.<\/p>\n\n\n\n<p><strong>Check this out too \ud83d\udc47\ud83c\udffc<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"nv-iframe-embed\"><iframe loading=\"lazy\" title=\"Create your Ethereum ERC20 token | Metaschool\" width=\"1200\" height=\"675\" src=\"https:\/\/www.youtube.com\/embed\/HN3e9fJNv0w?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"features-of-erc-4626\"><span class=\"ez-toc-section\" id=\"Features_of_ERC-4626\"><\/span>Features of ERC-4626<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The ERC-4626 token standard provides a wide range of features to facilitate tokenization of real-world assets. These features include:<\/p>\n\n\n\n<p><strong>Token transfers<\/strong> allow users to transfer tokens between accounts.<\/p>\n\n\n\n<p><strong>Token burning<\/strong> lets users destroy tokens and permanently remove them from circulation.<\/p>\n\n\n\n<p><strong>Token minting<\/strong> enables users to create new tokens and add them to circulation.<\/p>\n\n\n\n<p><strong>Token freezing<\/strong> allows users to temporarily freeze tokens, preventing them from being transferred or used.<\/p>\n\n\n\n<p><strong>Token vesting<\/strong> enables users to limit the amount of tokens that can be transferred or used by a certain account.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"benefits-of-erc-4626\"><span class=\"ez-toc-section\" id=\"Benefits_of_ERC-4626\"><\/span>Benefits of ERC-4626<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The ERC-4626 token standard offers a wide range of benefits to users. These include:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"1-improved-security\"><span class=\"ez-toc-section\" id=\"1_Improved_security\"><\/span>1. Improved security<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The token standard provides stronger security for token holders by making it harder for malicious actors to steal their tokens. This is done by requiring tokens to be stored in a smart contract wallet, making it more difficult for hackers to access them.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"2-transparency\"><span class=\"ez-toc-section\" id=\"2_Transparency\"><\/span>2. Transparency<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It provides greater transparency for token holders by providing them with more information about the token, such as its total supply, total circulating supply, and total locked supply. This helps investors make better decisions when buying and selling tokens.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"3-simplified-codebase\"><span class=\"ez-toc-section\" id=\"3_Simplified_codebase\"><\/span>3. Simplified codebase<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The token standard simplifies the codebase of the token, making it easier for developers to build and maintain applications using the token. This makes the token more user-friendly and reduces development time.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"4-easier-token-creation\"><span class=\"ez-toc-section\" id=\"4_Easier_token_creation\"><\/span>4. Easier token creation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The ERC-4626 token standard makes it easier for developers to create their own tokens. It offers a simplified codebase and a range of options for token holders to customize their tokens.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"5-increased-liquidity\"><span class=\"ez-toc-section\" id=\"5_Increased_liquidity\"><\/span>5. Increased liquidity<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Lastly, the standard makes it easier for tokens to be traded on exchanges, increasing the liquidity of the token. This makes it easier for token holders to convert their tokens into other currencies and vice versa.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"comparison-with-other-token-standards\"><span class=\"ez-toc-section\" id=\"Comparison_with_other_token_standards\"><\/span>Comparison with other token standards<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>ERC-4626 token standard compares favorably to other token standards such as ERC-20 and <a href=\"https:\/\/metaschool.so\/articles\/erc-721-tokens\/\">ERC-721<\/a>. The recently released standard that is designed to bridge the gap between the ERC20 and ERC721 token standards combines the features of both standards, allowing developers to create tokens that are both <a href=\"https:\/\/metaschool.so\/articles\/fungible-token-meaning\/\">fungible<\/a> and <a href=\"https:\/\/metaschool.so\/articles\/what-are-nfts\/\">non-fungible<\/a>. <\/p>\n\n\n\n<p>This means that developers can <a href=\"https:\/\/metaschool.so\/tokens?ref=Articles&amp;utm_source=Blog_Organic\">create tokens<\/a> that represent interchangeable digital assets, such as currencies, as well as unique digital assets, such as artwork or digital collectibles. This standard is more complicated to implement compared to the other two, as it requires the use of multiple <a href=\"https:\/\/metaschool.so\/articles\/smart-contract-definition\/\">smart contracts <\/a>to handle the various attributes of the tokens.<\/p>\n\n\n\n<p>Additionally, it provides built-in support for token transfers, burning, and minting, which other token standards do not offer.<\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":3615,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[292,17],"tags":[51,31,301],"class_list":["post-3613","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-answers","category-blockchain","tag-blockchain","tag-ethereum-blockchain","tag-token-standards"],"_links":{"self":[{"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/posts\/3613","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/comments?post=3613"}],"version-history":[{"count":4,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/posts\/3613\/revisions"}],"predecessor-version":[{"id":4728,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/posts\/3613\/revisions\/4728"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/media\/3615"}],"wp:attachment":[{"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/media?parent=3613"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/categories?post=3613"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/metaschool.so\/articles\/wp-json\/wp\/v2\/tags?post=3613"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}