TFX – What is ERC-20 and TRC-20?

What is a token standard?

A crypto token standard can be interpreted as a set of rules by which all the tokens on that particular standard are governed. To put it simply, it can be seen as a guideline to create, issue and deploy new tokens on a specific blockchain. Let’s look at an example: ERC20 tokens exist on the Ethereum platform and when a token is developed using ERC20, this standard provides an easy way for developers to design and build new tokens associated on the Ethereum blockchain. Each ERC20 tokens will share certain properties which will be governed by the same regulations.

Every blockchain can have its own token standard, sometimes more than one. The most popular types of token standards include ERC-20 (Ethereum) and TRC-20 (TRON blockchain).

How does ERC-20 work?

ERC stands for “Ethereum Request for Comments” and 20 is just the number they assigned to a proposal that would create some structure among tokens. As mentioned above, ERC-20 lays foundational rules about crypto tokens created on Ethereum in order to ensure that they are compatible with each other. The transactions processed using ERC-20 standards are highly effective, fast and globalised, mostly due to the established power of the Ethereum network.

How does TRC-20 work?

Similarly, TRON, which is another widely known blockchain, has TRC-20. TRON network was created with the purpose of being a more efficient clone of the Ethereum network, meaning lower fees and even lower transaction time. The main point is that TRON tokens can be used over the Ethereum network and vice versa, owing to the fact that both networks use the same operating system language. The TRC-20 token standard is commonly used for distributing fresh tokens over the TRON blockchain.

ERC-20 vs TRC-20

There are some basic differences between these two token standards that will help determine which token standard to use when creating a crypto token. ERC type tokens are able to process 20 transactions per second whereas TRC based tokens can process roughly 2000 transactions per second. The average fee is charged around 30 USDT for ERC tokens and it starts from as low as 2 USDT for TRC type tokens. The safety measures are higher in ERC tokens when compared with TRC type tokens. These are just some of the technical differences between both tokens.

We can see that the balance tips towards TRC type tokens when considering the difference in fees between them. The upside of using ERC-20 though is that it can be directly exchanged for any other ERC-20 crypto token but it normally takes more steps to reach the same token when dealing with TRC-20 which can result in longer time and higher costs.