Ethereum ERC-standards and their business use-cases

Julian Richter

Head of Sales & Business Development, Tangany

Tangany is a regulated white-label custodian for digital assets and amongst other protocols highly focussed on the smart-contract blockchain Ethereum. For this ecosystem we offer a custody service, a node infrastructure and a lot of exciting features, like the Ethereum Gas Tank. Ethereum offers an enlarged scope of different customized smart contracts and Tangany supports all of them via a universal smart contract API — developed inhouse in Germany. That means the Tangany custody solution is able to communicate with every smart contract deployed on the Ethereum network.

Next to the most common standard ERC-20 which is mostly used for fungible Utility Tokens (e.g. Initial Coin Offerings / ICOs/STO/Security Tokens), it supports moreover every possible business case like

  • Non-fungible Tokens (NFTs in the gaming industry),

  • Security Tokens (Crowdfunding with securities) and

  • Digital Identity (own the access to your digital identity).

In this article, we want to highlight three novel use cases next to the ERC-20 standard, all based on Ethereum. Moreover we share also valuable insights about the token standard of Tokeny, it is called T-REX.

ERC-20 — the most famous ERC standard

Since 2015 the ERC-20 standard was known as the most significant on Ethereum. ERC-20 has emerged as the technical standard and it is used for all smart contracts on the Ethereum blockchain for token implementation. It provides a list of rules that all Ethereum-based tokens must follow. ERC-20 tokens are blockchain-based assets that have value and can be sent and received. The primary difference is that instead of running on their own blockchain, ERC-20 tokens are issued on the Ethereum network. The Blockchain hype during the year 2017 and 2018 was driven mostly through the issuance of a lot of different ERC-20 tokens to raise funds for new Blockchain projects. But this standard is still used in 2020 and an important instrument for the Blockchain and Ethereum ecosystem. It is also widely supported by crypto exchanges and other service providers.

Non-fungible Token (NFT) standards ERC-721 and ERC-1155

Non-fungible Tokens (NFTs) are famously gaining popularity in the collectable and gaming ecosystem, and it is one of the hyped sectors in the blockchain and crypto industry. The use cases for NFTs stretch far beyond gaming and collectables. Developers all over the globe are creating entire virtual worlds by using the ERC-721 and ERC-1155 smart contracts and we still are at the early when it comes to the mass adoption. Moreover, NFTs can be used in a wide range of different sectors, such as art, music, fashion, IoT and a lot more.

The ERC-721 standard is currently most used for any kind of collectables and crypto games to tokenize unique individual items and assets. It provides basic functionality to transfer and track the ownership of NFTs.

The ERC1155 multi-token standard allows managing fungible, semi-fungible and non-fungible tokens, often used in the gaming sector. There it has great application since such games have fungible elements (like life/energy), but also non-fungible elements like weapons and other collectables that all differ from one another.

Security Tokens standards ERC-1400 and ERC-1404

The ERC-1400 standard is specifically designed for Security Tokens, these tokens are real securities and represent any kind of real-world asset on the blockchain. The standard allows, for instance, restricted transfers, the adding of transfer information, document library management and forced transfers. This can be achieved by combining various ERC standards, which each fulfils another aspect of the needed Security Token functionality. Therefore it has a broad range of functionalities that enable a legally confirm deployment of Security Token.

The ERC-1404 is an extension of ERC-20 standard and it allows the issuance of Security Tokens with transfer restrictions to fulfil compliance requirements. For example, it allows the implementation of a whitelist. So the issuer can selectively control who is able to buy and own the token. All token holders (investors) need to run an onboarding process with a KYC and AML check. Furthermore, it allows for human-readable messages to be implemented in case of a token transfer being reverted.

Security Tokens standard T-REX

Interms of functionality, the T-REX (from Tokeny) ranks as the most advanced standard to tokenize assets on the Ethereum public blockchain. Based on the ERC-20 standard, it supplements it with more than 100 functions to enforce compliance and manage control for the issuer, agents and investors.

The T-REX standard allows securities issuers and their agents benefit from a high level of control over digital securities. At any time, issuers and authorized agents can perform management operations such as creating or destroying securities, making transfers, blocking positions, pausing transfer activity, authorizing or revoking Investors, etc. These operations can be performed one-by-one or by batch to allow for the reduction of gas fees.

Digital Identity standard ERC-725

The ERC-725 standard is proposed for Blockchain-based identity developed by Fabian Vogelsteller, the creator of the famous ERC-20 standard. ERC-725 describes proxy smart contracts and multiple keys and different smart contracts can be controlled with it. Identity smart contracts can describe machines, objects, groups and individuals.

Why is self-sovereign identity so important? Users should be able to own and manage their digital identity instead of ceding ownership of identity to centralized organizations. In the last years, we have seen the risks and negative effects of having a centralized identity with damaging leaks and forbidden selling of user data. A portable, open standard for identities will enable decentralized governance and reputation. Every individual should be able to take and use their identity across different apps and platforms.

You want to find out more about the different Ethereum token standards, please check out the following websites:


The Ethereum ecosystem and the different smart contract standards are evolving on a constant basis and a lot of new business cases arise. In this article three different use cases — Non-fungible Tokens, Security Tokens and Digital Identity — were highlighted and evaluated more in detail. All of these use cases could have a big potential when it comes to Blockchain mass adoption in the coming years.

With its regulated and highly secure custody service, Tangany supports all of the novel use cases based on Ethereum (also the T-REX standard) and provides an extensive wallet infrastructure which can be easily implemented into the client's infrastructure via our smart API.

If you want to learn more about it, please reach out to Tangany via the websiteLinkedIn or e-mail (


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