Start with the interface, not the token. On Ethereum, many development standards are essentially agreements about how a token's smart contract behaves and how it interacts with the wider ecosystem. That makes the standard a useful first checkpoint when you evaluate a project, but a narrow one: it tells you how a token is built, not whether the business behind it works.
This guide walks through what the documented standards actually cover, then offers a checklist for reading a project's own claims against them.
What a token standard is, and is not
According to Ethereum's developer documentation, many Ethereum development standards focus on token interfaces. Those interfaces define how tokens behave and interact across the ecosystem, which helps smart contracts remain composable. In practice, when a new project issues a token, staying compatible with existing decentralized exchanges and applications depends on following those conventions.
The documentation frames the benefit in developer terms: standards make it easier to build without reinventing the wheel, so tokens work with wallets, exchanges, and DeFi platforms. It also notes that consistency helps across use cases such as gaming and governance, making the network more interconnected.
That is a statement about interoperability, not about value. A compatible token can still have an unclear supply schedule, weak governance, or a business model that does not generate revenue. The standard is the plumbing.
The three standards most readers will encounter
The source documentation highlights three popular standards on Ethereum. The table below restates them without adding interpretation.
| Standard | What the documentation says it is | Examples given |
|---|---|---|
| ERC-20 | A standard interface for fungible (interchangeable) tokens | Voting tokens, staking tokens, virtual currencies |
| ERC-721 | A standard interface for non-fungible tokens | A deed for artwork, a song |
| ERC-1155 | Allows more efficient trades and bundling of transactions, saving costs | Utility tokens such as $BNB or $BAT, and non-fungible tokens like CryptoPunks |
Two details are worth pausing on. First, the ERC-20 examples include voting and staking tokens, which signals how often governance and staking designs sit on a fungible interface. Second, ERC-1155 is described as supporting both utility tokens and non-fungible tokens in one standard, which is why it appears in mixed-asset designs.
A verification checklist
The documentation references several practitioner resources without endorsing outcomes. It points to a Token Integration Checklist from Trail of Bits, OpenZeppelin's Tokens documentation, and a paper titled "The Dangers of Token integration" from OpenZeppelin. It also links a checklist of things to consider when interacting with tokens, an annotated walk-through of the OpenZeppelin ERC-20 contract implementation, and guidance on transfers and approval of ERC-20 tokens from a Solidity smart contract.
Those references suggest a reasonable reading order for a non-developer. Use them as prompts for questions, not as a substitute for a technical audit.
- Name the standard. Ask the project to state which interface it implements. "ERC-20" and "ERC-721" are different claims with different behaviors; a project that blurs them is worth a follow-up.
- Match the standard to the asset. If the token is described as interchangeable, ERC-20 is the documented fungible interface. If it is a unique deed or collectible, ERC-721 is the documented non-fungible interface.
- Check mixed or bundled claims. ERC-1155 is documented as allowing more efficient trades and bundling of transactions, saving costs, and as supporting both utility tokens and non-fungible tokens. If a project uses it, ask which of those capabilities it actually relies on.
- Look for the contract implementation. The documentation points to a line-by-line walk-through of the OpenZeppelin ERC-20 contract and to guidance on transfers and approvals from a Solidity contract. Public implementations are easier to compare than prose descriptions.
- Read integration risk material. The Trail of Bits checklist and OpenZeppelin's warnings about token integration are about interacting with tokens, a different question from whether a token is a good business.
- Separate compatibility from economics. A token that works with wallets, exchanges, and DeFi platforms has cleared an interoperability bar. Nothing in the documented material speaks to revenue, supply, or demand.
A short worked example
Suppose a project says it is issuing "an ERC-20 governance token also used for staking." The documented ERC-20 description lists voting tokens and staking tokens as fungible examples, so the standard claim is at least internally coherent with the source. That check confirms the category, not the design.
The next questions are outside the standard's scope: how voting power is counted, what staking does, and whether the token has any link to company revenue. A hypothetical project that raises outside capital before a token launch would still need separate disclosure on those points; the funding event itself is not evidence about the token, and nothing in the documentation links financing to token value. Treat any such link as a claim to be sourced, not assumed.
What the source does not say
The documentation does not state that any standard makes a token valuable, nor does it compare standards on security or economic outcomes. It does not publish a filing date, a review process, or adoption statistics for each standard. It does not say which projects use which standard beyond the named examples, and it does not state that ERC-1155 is superior for every use case.
It also does not equate a standard with a token's economics, and it offers no view on fundraising, valuation, or returns. The external resources it names are referenced as material to consult, not as endorsements of any project. Finally, the source does not describe token standards on other networks, so a checklist built from it applies to Ethereum.
The honest summary: the standard tells you what interface a token follows and whether it can plug into wallets and exchanges. Everything a reader usually cares about most, from governance to revenue, has to be verified separately.