Token Standard

Definition ∞ A token standard is a set of rules and specifications that define how a token operates on a specific blockchain. These standards ensure that tokens are compatible with wallets, exchanges, and decentralized applications built on that particular blockchain. Adherence to a token standard facilitates interoperability and simplifies the development and integration of new digital assets.
Context ∞ Token standards, such as ERC-20 for fungible tokens on Ethereum, are foundational elements of blockchain ecosystems. Current discussions often center on the development of new standards to support diverse token functionalities, including non-fungible tokens (NFTs) and security tokens. Future advancements will likely address cross-chain token standard compatibility and the creation of more sophisticated standards for complex digital asset arrangements.