ERC777 (Ethereum)
Features of the ERC777 token standard
Last updated
Features of the ERC777 token standard
Last updated
This feature is coming soon to the FlexSmart platform! Until then, you can always click here to talk with a Smart Contract Creation Expert who can help with creation and implementation of ERC777 tokens.
Ethereum’s industry-standard ERC20 token was a groundbreaking innovation when it was released in 2015. It is still the dominant--almost the only--framework that is used to mint fungible tokens since Ethereum’s blockchain is so well entrenched in the marketplace. If you haven’t read our ERC20 and ERC20 Advanced Features articles do that first, as the ERC777 token spec builds directly on those standards.
In the traditional realm of software development, security has been a concern since the early days of the trade. As such it is generally well-understood by the developers that work in that world, and sensational hacker exploits (which have become a whole category of movies!) brought awareness of that never ending war into the imagination of the public over the decades. These concerns are largely the result of vulnerabilities that arise in the centralized storage of code. Attack the server which holds the code, and you get access and control over the code that is loaded there.
The modern blockchain is quite different. There is no central server anywhere that houses programming and data for its operations. Rather, these resources are distributed to many thousands of “nodes” that independently verify the legitimacy of anything sent to them, establishing a consensus as to what constitutes the truth of that information. Indeed, this “consensus protocol” is the very heart of the blockchain itself.
This does not make the blockchain bulletproof, but the developers of the technology were very aware of security issues from the start. By and large the ERC20 token standard has proven quite robust and reliable. But much more is known about the real-world functioning of the blockchain ecosystem now--and the variety of threats leveled at it--and the new ERC777 standard is designed to withstand any attempt at malicious interference with its operations.
ERC777 tokens are completely backward compatible with the ERC20 standard, and do not break existing contracts in any way. Developers using the new standard must follow an explicit protocol governing how ERC20-originated interactions are handled by ERC777 smart contracts however, and the instructions to this effect are comprehensive and unambiguous so as to engender no disruption to the blockchain under any circumstances.
There were three other motivations for the new standard as well.:
In recent years the popularity of the Ethereum blockchain has gradually brought about higher gas fees, so the new token type has made a major change in the way basic transactions are handled. Where before the process of moving currency involved two separate function calls (approve and transferFrom), the ERC777 standard can accomplish the same thing in a single maneuver, cutting gas consumption in half.
The new standard also implements a system of operators and hooks, which act more precisely and intelligently to accomplish the business of smart contracts.
Operators are defined as addresses that move tokens. While this seems intuitively plain, the new standard allows address holders to designate other addresses as operators, abstracting the relationship between them for greater flexibility of execution and lower gas fees.
Hooks are special commands that redirect processing to another piece of code “on the fly”. They are implemented using a hook registry established by the ERC1820 specification which allows any address to register other addresses where their hooks are defined in contracts. This system was very carefully groomed for backward compatibility issues and security concerns.
The last motivation for the new standard concerns the lifecycle of tokens. Having a token’s lifecycle clearly defined is especially important when value is derived from scarcity. In the ERC777 specification the mint, transfer and burn processes are visible and can be audited for accuracy from inception to extinction of a coin. This mitigates concerns that arose with the ERC20 spec, which could produce situations where the total supply of a token did not match the sum of its individual transactions.
Tip: Not sure where to start? In the near future, you will be able to use FlexSmart's platform to generate your own ERC777 token. Until then, click here to talk with a Smart Contract Creation Expert who can assist you with ERC777 token creation and implementation.