> For the complete documentation index, see [llms.txt](https://stylus-1.gitbook.io/stylusguide/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://stylus-1.gitbook.io/stylusguide/5.-creating-your-own-token-token-contract/introduction-to-tokens-and-standards.md).

# Introduction to Tokens and Standards

## Understanding Tokens and ERC Standards

### What are Tokens?

Tokens are digital assets created and managed on a blockchain. They can represent various assets or utilities, such as currency, property, or even access rights. Tokens can be fungible or non-fungible:

#### Fungible Tokens

These are interchangeable and identical to each other. The most common standard for fungible tokens on Ethereum is the ERC-20 standard. Examples include cryptocurrencies like DAI or USDC.

#### Non-Fungible Tokens (NFTs)

These are unique and cannot be exchanged on a one-to-one basis. Each token has distinct properties and metadata. The ERC-721 and ERC-1155 standards are used for NFTs. Examples include digital art and collectibles.

### Overview of ERC Standards

#### ERC-20 Standard

ERC-20 is a technical standard used for fungible tokens on the Ethereum blockchain. It defines a common list of rules that all Ethereum tokens must follow, allowing developers to create interoperable tokens.

**Key Functions of ERC-20:**

* **totalSupply**: Returns the total supply of the token.
* **balanceOf**: Returns the account balance of another account with address owner.
* **transfer**: Transfers a number of tokens to another address.
* **approve**: Allows another account to withdraw a certain number of tokens, often for spending by smart contracts.
* **transferFrom**: Transfers tokens from one address to another using an allowance.
* **allowance**: Returns the number of tokens allowed to be spent by another account.

#### ERC-721 Standard

ERC-721 is a standard for creating non-fungible tokens (NFTs). Each token has unique characteristics and is represented by a unique ID.

#### ERC-1155 Standard

ERC-1155 is a multi-token standard that allows for the creation of both fungible and non-fungible tokens within the same smart contract.

These standards ensure that tokens created on the Ethereum blockchain can be used across various dApps and platforms without compatibility issues.