The Ethereum blockchain protocol that specifies the types of tokens that can operate compatibly with ETH is ERC-777. The ERC-777 is a more advanced token standard on the Ethereum network that was designed as a development of the ERC-20 token standard.
The addition of new security features and functionality characterizes ERC 777. As a token standard on the Ethereum network, ERC-777 is of particular interest due to its full compatibility with decentralized exchanges and its focused development goals.
To understand what ERC 777 is, its history and purpose, its benefits and advantages, and its main features, check out the full review below!
What is ERC 777?
Quoting coinmarketcap.com, ERC-777 is a token standard for creating token equivalents on the Ethereum network. This standard can fully integrate with existing decentralized exchanges.
In simpler terms, ERC-777 is the Ethereum blockchain protocol that governs the types of tokens that can operate compatibly with ETH.
History and Purpose of ERC-777
Jordi Baylina, Jacques Dafflon, and Thomas Shababi proposed ERC-777 in November 2017 as a new token standard on the Ethereum platform.
They aimed to improve the ERC-20 standard by introducing more features while ensuring backward compatibility with existing ERC-20 applications.
Benefits and Advantages of ERC-777
ERC 777 simplifies interactions in complex token trades and helps resolve ambiguities around decimals, minting, and burning. ERC-777 uses a highly efficient feature known as a hook.
When tokens are delivered to a computer-based analytics contract, the hook mechanism is activated, thus simplifying the interaction between the account and the contract when receiving tokens. Additionally, tokens are less likely to get trapped in the contract with ERC-777 tokens, which is an improvement over the problems commonly associated with ERC-20 tokens.
Main Features of ERC-777
The following are some of the advantages or benefits provided by the ERC-777 standard, among others:
- ERC-777 implements a new standard, ERC-820, which enables the registration of metadata for contracts to provide basic introspection capabilities. This approach enables backward compatibility as well as the extension of additional functionality. Contracts in the ERC-777 standard interact similarly to contracts in the ERC-20 standard.
- When tokens are sent to a computer-based analytics contract, activation of the hook mechanism eases the interaction between the account and the contract during the token acceptance process.
Get to Know ERC 777 Improvements Over ERC 20
Quoting ethereum.org, ERC-777 brings further improvements compared to ERC-20, among others:
Hooks are functions described in the smart contract code. Hooks are called when tokens are sent or received through the contract, allowing the smart contract to respond to incoming or outgoing token events.
Hooks are registered and identified using the ERC-1820 standard. The following are some of the benefits of hooks, namely:
- Hooks allow sending tokens to a contract and notifying the contract in a single transaction, unlike ERC-20, which requires multiple calls (approve/transferFrom) to achieve this.
- Contracts that have not registered hooks cannot communicate properly with ERC-777. If the sending contract uses a hook and the receiving contract has not registered a hook, the transaction will be aborted, thus preventing accidental transfers to non-ERC-777 smart contracts.
- Hooks can also reject transactions.
Conclusion
In conclusion, ERC-777 exhibits some important advantages as a more advanced token standard on Ethereum. Among these are enhanced security features and functionality compared to previous token standards such as ERC-20.
Furthermore, to fully understand the future development potential of tokens, it is important to delve further into the innovative features introduced by ERC-777. That way, we can take full advantage of the opportunities offered by the evolution of this token standard within the Ethereum blockchain ecosystem.
For additional information, you can also read other interesting articles about the difference between ERC 721 vs ERC 1155 and ERC 404 in the best article collection from INDODAX Academy, and you can also read crypto terms in the Academy glossary.
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Invest in Ethereum on INDODAX
Well, now you understand what ERC 777 is, its history and purpose, its benefits and advantages, to its main features.
Furthermore, to invest crypto assets in Ethereum at INDODAX, you should check the Ethereum price today on the INDODAX Market.
The following are the steps to buy Ethereum on INDODAX:
- Login to your INDODAX account.
- Make a deposit if your balance is still empty.
- Open the marketplace and find Ethereum.
- After that, find the sales column and enter the desired Ethereum price and the available balance. You can choose the instant or limit method.
- Alternatively, you can place a sell order at the desired price immediately after you have Ethereum. Be sure to pay attention to the previous price movements.
As a disclaimer, it is important to understand the risks associated with crypto trading, given its high volatility, before making any transactions.
The decision to buy Ethereum is entirely the user’s responsibility. In addition, be sure to research before making an investment decision.
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