This content originally appeared on DEV Community and was authored by Divine Igbinoba
How standardized protocols enable seamless interaction between wallets, dApps, and smart contracts
So far, you've learned the practical skills of blockchain interaction: reading data, sending transactions, and listening for events.
You've even deployed your own Counter contract and successfully modified blockchain state.
But as you venture deeper into decentralized applications (dApps), you'll constantly encounter terms like ERC-20, ERC-721, EIP, and interfaces.
What are these mysterious acronyms, and why are they absolutely crucial for blockchain development?
Today, we're zooming out to understand the fundamental concept that makes the blockchain ecosystem so powerful and interconnected: Blockchain Standards.
What Are Blockchain Standards?
Blockchain standards are agreed-upon sets of rules, conventions, or interfaces that smart contracts and applications adhere to.
They define how certain types of digital assets or functionalities should behave on a blockchain.
Now, imagine if every device manufacturer created their own unique electrical outlet.
You'd need a different adapter for every appliance! Instead, we have standardized plugs and outlets that work universally.
Blockchain Standards Work Similarly...
If every token had its own unique way of handling transfers or checking balances:
- ❌ No wallet could support multiple tokens
- ❌ No decentralized exchange could trade them
- ❌ dApps couldn't interact with each other
- ❌ Users would need different interfaces for every token
Standards solve this by providing universal interfaces for common functionalities.
Why Standards Are Essential for Blockchain
Standards aren't just helpful, they're absolutely vital for the growth and utility of any blockchain ecosystem for the following:
1. Interoperability: The Foundation of DeFi
Standards ensure different smart contracts, wallets, exchanges, and dApps can seamlessly interact with each other.
Example: Because all ERC-20 tokens implement the same
*transfer()*function, MetaMask can send any ERC-20 token, and Uniswap can swap any pair of ERC-20 tokens without custom integration for each one.
2. Composability: "Money Legos"
Standards enable composability, the ability to combine different dApps and protocols like LEGO bricks to build complex applications.
This is the secret sauce behind DeFi innovation.
Example DeFi Flow:
- Deposit USDC into Compound (lending protocol)\
- Receive cUSDC (interest-bearing tokens)\
- Use cUSDC as collateral on MakerDAO\
- Mint DAI stablecoins\
- Trade DAI for ETH on Uniswap\
- Stake ETH in Ethereum 2.0
This entire flow is possible because each protocol adheres to token standards!
3. Developer Efficiency
Developers don't reinvent the wheel for common functionalities. They use:
- Well-tested implementations: Reduced bugs and security risks
- Audited standard code: Battle-tested by the community
- Proven patterns: Faster development cycles
4. Superior User Experience
Standards mean familiarity for users:
- If you know how to send one ERC-20 token, you know how to send them all
- Wallets have consistent interfaces across different tokens
- Reduced learning curve for new dApps
5. Ecosystem Growth Acceleration
By lowering barriers for both developers and users, standards:
- Accelerate innovation
- Increase adoption
- Enable network effects
- Foster creative combinations
How Are Blockchain Standards Created?
On Ethereum, standards originate as Ethereum Improvement Proposals (EIPs) through a democratic, open process:
The EIP Process
- Proposal: Anyone can submit an EIP describing a new feature or standard
- Discussion: Community review and feedback on GitHub and forums
- Refinement: Authors iterate based on feedback
- Review: Technical review by EIP editors
- Final: Community consensus and implementation
EIP Categories
Core EIPs: Protocol-level changes (consensus, networking)
Networking EIPs: DevP2P protocol improvements
Interface EIPs: API/RPC specifications
ERC EIPs: Application-level standards (our focus!)
What is ERC?
ERC stands for Ethereum Request for Comments. They define standard interfaces that ensure interoperability between dApps, wallets, and tokens.
Essential Blockchain Standard Categories
1. Token Standards
Define how different digital assets behave:
🪙 ERC-20 (Fungible Tokens)
- Use Case: Currencies, utility tokens, stablecoins
- Examples: DAI, USDC, LINK, UNI
- Key Feature: Every unit is identical and interchangeable
- Functions:
transfer(),balanceOf(),approve()
🎨 ERC-721 (Non-Fungible Tokens)
- Use Case: Digital art, collectibles, domain names
- Examples: CryptoPunks, Bored Ape Yacht Club, ENS domains
- Key Feature: Each token has a unique ID and properties
- Functions:
ownerOf(),transferFrom(),tokenURI()
⚡ ERC-1155 (Multi-Token Standard)
- Use Case: Gaming assets, complex applications
- Examples: Gaming items, event tickets
- Key Feature: Single contract manages multiple token types
- Benefits: Gas efficiency, batch operations
2. Interface Standards
Enable standardized contract interaction:
🔍 EIP-165 (Interface Detection)
- Purpose: Contracts declare which interfaces they support
- Benefit: Other contracts can query capabilities dynamically
- Example: Check if a contract supports ERC-721 before calling NFT functions
3. Identity & Naming Standards
🌐 ENS (Ethereum Name Service --- EIP-137)
- Purpose: Human-readable names for blockchain addresses
- Example:
vitalik.eth→0xd8dA6BF26964aF9D7eEd9e03E53415D37aA96045 - Benefits: Improved UX, reduced errors, brandable addresses
4. Governance Standards
🗳️ EIP-2612 (Permit Extension for ERC-20)
- Purpose: Gasless token approvals using signatures
- Benefit: Better UX for dApp interactions
- Use Case: Users can approve token spending without separate transactions
Standards in Action with web3.py
You've already benefited from standards in our previous tutorials! When you interact with smart contracts using:
contract = w3.eth.contract(address=CONTRACT_ADDRESS, abi=CONTRACT_ABI)
The ABI (Application Binary Interface) you provide is essentially web3.py's "map" to the contract's functions and events, which are often defined by standards.
ERC-20 Interaction Example
# Standard ERC-20 functions work across ALL ERC-20 tokens
erc20_abi = [...] # Standard ERC-20 ABI
# These functions work whether it's DAI, USDC, LINK, or any ERC-20 token
balance = contract.functions.balanceOf(user_address).call()
name = contract.functions.name().call()
symbol = contract.functions.symbol().call()
decimals = contract.functions.decimals().call()
# Transfer tokens (same function signature for all ERC-20s)
transfer_txn = contract.functions.transfer(to_address, amount).build_transaction({
'from': sender_address,
'nonce': nonce,
'gas': 60000,
'gasPrice': w3.eth.gas_price
})
This standardization means:
- Wallet developers can support thousands of tokens with one implementation
- DEX developers can create universal trading interfaces
- Portfolio trackers can aggregate any ERC-20 tokens
- You as a developer can build applications that work with any compliant token
Standards Enable Innovation
Some groundbreaking innovations made possible by standards:
🔄 Flash Loans (Aave, dYdX)
- Borrow millions instantly, use in complex transactions, repay in same block
- Only possible because of standardized token interfaces
🤖 Yield Farming (Compound, Yearn)
- Automatically move funds between protocols to maximize returns
- Requires standard interfaces for lending/borrowing protocols
📊 Portfolio Management (Zapper, DeBank)
- Track assets across dozens of protocols in one interface
- Possible because protocols follow standard patterns
⚡ MEV (Maximal Extractable Value)
- Sophisticated trading strategies across multiple DEXs
- Relies on predictable, standardized AMM interfaces
Common Misconceptions About Standards
❌ "Standards limit innovation" ✅ Standards provide foundations for innovation, like roads enable transportation
❌ "Standards are optional"✅ While technically optional, network effects make them practically essential
❌ "One standard fits all use cases" ✅ Different standards serve different needs (ERC-20 vs ERC-721 vs ERC-1155)
❌ "Standards never change" ✅ Standards evolve through new EIPs and extensions
Understanding blockchain standards is like learning the grammar of blockchain development.
It empowers you to build applications that aren't isolated islands but integral parts of a vast, interconnected ecosystem.
With this conceptual foundation, you're perfectly prepared for our next tutorial, where we'll put this knowledge into practice.
We'll dive deep into the most widely adopted token standard: ERC-20 tokens.
Key Takeaways
✅ Standards enable interoperability between different blockchain applications
✅ EIPs provide democratic governance for Ethereum standard development
✅ Token standards (ERC-20, ERC-721, ERC-1155) define asset behavior
✅ web3.py benefits from standards through consistent ABIs and functions
Resources for Further Learning
Ethereum Improvement Proposals (EIPs) - Official EIP repository
OpenZeppelin Contracts - Battle-tested standard implementations
Token Lists - Standardized token metadata
Found this deep dive helpful? 👏 Clap if you learnt something new. Share with fellow developers who need to understand blockchain standards.
Questions about specific standards or EIPs? Drop a comment, I love discussing the technical details that make blockchain ecosystems work! 💬
This content originally appeared on DEV Community and was authored by Divine Igbinoba
Divine Igbinoba | Sciencx (2025-07-21T18:37:47+00:00) Part 5: The Backbone of Blockchain Interoperability - Understanding Standards. Retrieved from https://www.scien.cx/2025/07/21/part-5-the-backbone-of-blockchain-interoperability-understanding-standards/
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