## Why are token standards important in Web3?

Token standards are not just dry technical rules; they are the foundation for the entire blockchain ecosystem to operate seamlessly. They define how digital assets communicate, interact, and are stored across different blockchains. Understanding token standards will help you grasp how DeFi, NFTs, and a multitude of other decentralized applications function.

Each blockchain has its own token standards, customized according to the needs and technical characteristics of the network. This allows tokens to be compatible with wallets, exchanges, and applications on the same platform without encountering issues.

## ERC-20: The token standard governing Ethereum

ERC-20 ( Ethereum Request for Comments 20) is the most widely used token standard on the Ethereum blockchain. This is a set of rules that helps developers implement token smart contracts in a standardized way, ensuring compatibility with hundreds of DeFi applications, DEXs, and wallet reserves on the Ethereum network.

The strength of ERC-20 lies in its ability to standardize. Once compliant with this standard, tokens can be automatically integrated into any interface without the need to change the code.

## ERC-721: The Standard That Opens the Door for NFTs

ERC-721 is a significant milestone in the history of digital tokens, allowing the creation of non-fungible digital assets (NFT). Unlike ERC-20 (tokens that can be divided and are identical), ERC-721 creates unique, indivisible assets.

Thanks to this standard, digital artworks, collections, game items, and virtual real estate can be created, owned, and traded on the blockchain. Each NFT carries authenticity and exclusivity, verified by the blockchain record.

## BEP-20: Token standard of BNB Chain

BEP-20 is the main token standard in the BNB Smart Chain ecosystem (BSC). It plays a similar role to ERC-20 but is optimized for the BNB Chain network. BEP-20 tokens can seamlessly interact with a wide range of DeFi applications and DEX on the BSC network.

The reason BEP-20 attracts millions of users is its extremely low transaction fees and fast confirmation speed. This makes it a favorite choice for both the user community and blockchain projects.

## BEP-2: Token Standard of BNB Beacon Chain

BEP-2 is the technical standard for issuing tokens on the BNB Beacon Chain. It defines the set of rules that tokens must follow to operate within this network. BEP-2 ensures consistency and compatibility within the BNB Beacon Chain ecosystem.

## SPL: Solana's token standard

SPL provides a set of rules and protocols for tokens operating on the Solana network. Any token that complies with the SPL standard can interact with Solana wallets, smart contracts, and the entire Solana ecosystem.

SPL tokens, including the native SOL, are highly compatible with DeFi and NFT applications on this network.

## Looking wider: Why do we need multiple token standards?

Each blockchain has its own characteristics regarding speed, cost, and consensus mechanisms. Therefore, a token standard cannot be "one-size-fits-all". A standard designed for Ethereum may not be effective on Solana, and vice versa.

The diversity of token standards is essentially the diversity in how different blockchains balance decentralization, security, and scalability. Understanding each standard will help you choose the right blockchain for your needs.