What are the differences between TRC20 and ERC20?

Crypto Assets have developed to date, with thousands of digital Tokens for you to choose from, each with its own advantages and uses. With the development of the Crypto Assets community, its technology and support continue to evolve.

Among the many available Token standards, ERC20 and TRC20 are the two most popular and widely used standards in the encryption industry. But why is that? What are the differences between them?

In this article, we aim to explore the main differences between TRC20 and ERC20, examine how Tokens interact with smart contracts, and discuss their impact on the broader Crypto Assets ecosystem.

Whether you are an experienced trader or new to the world of digital currency, understanding these Token standards will help you use Crypto Assets more effectively.

What is TRC20?

TRC20 is a token standard used for developing and using smart contracts on the Tron blockchain. This protocol is the foundation for many digital tokens within the Tron network, which is known for its high transaction speeds and low fees. Essentially, TRC20 is to the Tron network what ERC20 is to the Ethereum network, facilitating the seamless creation and management of tokens.

The TRC20 standard ensures compatibility among numerous Tokens and decentralized applications developed and run on the Tron blockchain (dApp). It provides developers with a predefined set of rules and functions, such as transferring Tokens, querying Token balances, managing Token supply, and interacting with other Tokens. By adhering to these rules, Tokens can operate efficiently within the Tron ecosystem, enabling complex transactions and ongoing interactions with other smart contracts and Tokens.

TRC20 Tokens are typically run on the TRON Virtual Machine ( TVM ), which operates similarly to the Ethereum Virtual Machine ( EVM ) that we are familiar with. This similarity means that developers who are familiar with the Ethereum Solidity programming language can easily get started creating TRC20 Tokens, as both platforms use the same smart contract language.

This cross-compatibility is a well-known design choice of the Tron ( team. Developers aim to make the Tron blockchain an outstanding alternative to Ethereum, promising to attract developers with lower transaction costs and faster processing speeds.

In the Crypto Assets community, TRC20 encryption Tokens are well-known and widely used for their efficiency, especially favored by investors and traders who prioritize fast transaction speeds and low fees. These features make TRC20 an ideal choice for developers, helping them deploy digital Tokens or create new types of decentralized applications without bearing the high costs of other blockchain networks.

What is ERC20?

ERC20, or "Ethereum Request for Comments 20", is a technical standard used for issuing and managing Tokens on the Ethereum blockchain. It is one of the most widely adopted protocols in the crypto community for creating smart contracts on the Ethereum blockchain network, and it could even be said to be the most popular token protocol.

The ERC20 standard provides a set of rules that all Ethereum-based Tokens must follow, ensuring that different types of tokens can be compatible with a wide range of applications, such as wallets, exchanges, and decentralized applications )dApps(.

This enables Ethereum to provide a complete ecosystem that offers everything needed for crypto enthusiasts to buy, sell, or transfer Tokens, as well as to complete many other crypto-related activities.

Essentially, the ERC20 standard defines a common set of rules that Ethereum Tokens must implement, allowing developers to program how new Tokens operate within the Ethereum ecosystem.

This includes how tokens are transferred between addresses and how to access the data within each Token. By standardizing the approach, ERC20 greatly simplifies the process of integrating new Tokens into existing systems and applications.

The ERC20 Token standard has developed 9 functions to help manage token balances. Developers should include these functions when building smart contracts to generate ERC20 tokens, of which 6 are required and 3 are optional. These functions include:

TotalSupply (required): Returns the total supply of tokens generated by the project;

BalanceOf (required): Returns the account balance held by a specific address;

Transfer (required): Allow one address to transfer Tokens to another address;

Approval (Required): One address can authorize another address to use tokens on its behalf;

TransferFrom (required): Allows one address to receive tokens from another approved address.

Permission (required): Returns an address that can represent another address to spend the Token;

Name (optional): Return the Token's name;

Symbol (optional): Returns the token's logo;

Decimal (optional): Returns the number of decimal places the token can be divided into.

ERC20 Tokens are typically designed to support the creation of complex functionalities such as voting rights and staking mechanisms. Implementing smart contracts using the ERC20 standard enables a decentralized governance system, making ERC20 Tokens crucial participants in the Ethereum ecosystem.

Through the ERC20 protocol, the Ethereum network has developed a complex environment for the encryption industry, giving rise to a wide variety of digital Tokens, each serving different purposes and markets.

TRC20 and ERC20

blockchain network

ERC20 Tokens operate on the Ethereum blockchain, which is known for its powerful smart contract capabilities and widespread applications. The network is supported by the Ethereum Virtual Machine )EVM(, enabling complex contract operations and various decentralized applications )dApp(.

On the other hand, TRC20 Tokens are based on the TRON blockchain, aiming to optimize transaction speed and reduce transaction costs. The TRON blockchain uses the TRON Virtual Machine, which is a more efficient clone of the EVM, designed to be compatible with Ethereum's programming language Solidity, but offers faster processing times.

Transaction speed and fees

One of the main challenges faced by ERC20 Tokens is related to their transaction costs (often referred to as "Gas fees"). These fees can fluctuate and can become quite high during times of network congestion. For example, at the time of writing, the average transaction fee on Ethereum is about $4.5. This affects the number of users choosing to trade ERC20 Tokens.

In addition, Ethereum has also encountered situations where the network was too congested to support all transaction demands, resulting in higher fees and transaction times.

Compared to ERC20, TRC20 Tokens typically offer lower transaction fees and faster processing times. For example, at the time of writing, the network fee for transferring TRC20 Tokens is slightly above 1 dollar. This makes Tron Tokens the preferred choice for users seeking quicker and more economical token transfers, especially in cases of high transaction volume.

Compatibility and adoption rate

ERC20 Tokens have a major advantage: they have a large ecosystem and are supported by numerous wallets and exchanges. This wide compatibility fosters an excellent ecosystem made up of numerous tokens and projects. ERC20 Tokens aggregate thousands of Crypto Assets projects, and the number continues to grow.

While TRC20 Tokens are catching up in terms of ecosystem support, they are often seen as part of a network that is still expanding its coverage and adoption rate. The compatibility of TRC20 with Ethereum's Solidity language helps eliminate the barriers for developers switching between the two platforms.

Use cases and community

The Ethereum community is larger, typically participating in a broader range of decentralized applications, financial solutions, and enterprise blockchain implementations. This diversity helps create a rich environment and promotes innovative use cases for ERC20 Tokens.

On the other hand, TRC20 Tokens are mainly used in applications that require fast and frequent transactions, such as some games and social media platforms developed on the TRON network. The TRON Foundation's focus on media and entertainment aligns with the practical use cases of TRC20.

Address Style

Of course, the addresses of ERC20 and TRC20 Tokens are different. Therefore, ERC20 follows the address format of all Ethereum tokens, starting with "0x".

On the other hand, Tron addresses are slightly different from the addresses of Ethereum-based encryption projects, starting with "T".

Top TRC20 Token

The TRON network hosts various TRC20 Tokens, which have made significant contributions to its ecosystem. Below, we will explore five of the most well-known TRC20 Tokens and discuss their utility, market impact, and unique features.

USDT (Tether on TRON)

USDT is the Tether version based on TRON ), primarily used to provide stability and tackle the volatility of the crypto assets market. USDT is pegged to the US dollar at a 1:1 ratio, offering a stable value store and medium of exchange.

As a TRC20 Token, USDT benefits from TRON's low transaction fees and fast processing times, making it a popular choice for traders who need quick and economical transfers.

BitTorrent (BTT)

BTT is used in the BitTorrent ecosystem, which is one of the largest decentralized networks in the world. It incentivizes users to share bandwidth and resources, thereby improving the overall performance and speed of the network.

The token integrates blockchain technology into a mature peer-to-peer (P2P) file sharing service, enhancing its functionality through a blockchain-driven incentive structure.

WINkLink (WIN)

WIN is the native Token of WINkLink, which is a decentralized oracle network on the TRON ( blockchain. The project aims to provide reliable data-driven support for the execution of smart contracts. It allows developers to connect with each other and link real-world data, as well as connect smart contracts with real-world data-driven connections.

WINk utilizes the TRON blockchain's capabilities to provide a transparent environment, where all transactions are recorded on the blockchain, ensuring the platform's decentralized approach.

JUST (JST)

JST is the governance Token of the JUST platform, which is a decentralized finance ) DeFi ( system based on the TRON blockchain. It can be used to pay interest, participate in governance through voting, and for other functions within the JUST ecosystem.

JST allows users to directly use a range of DeFi products that offer lending, staking, and governance mechanisms, all of which benefit from the low-cost and high-speed characteristics of the TRON network.

5. Sun Newspaper (SUN)

SUN is a social experiment in the construction of the TRON DeFi ecosystem and is the main governance Token of the SUN.io platform, which focuses on decentralized stablecoin exchange, yield mining, lending, and other financial services.

As a governance Token, SUN enables holders to participate in the decision-making process regarding the platform's development, including feature updates and protocol adjustments.

top ERC20 Token

The Ethereum network, with its exceptional smart contract features, has become a fertile ground for numerous ERC20 Tokens. Each token leverages the characteristics of the network to offer unique functions and solutions.

Chainlink (LINK)

Chainlink is a decentralized oracle network that enables smart contracts on Ethereum to securely interact with external data sources, events, and payment methods. It is crucial in bridging the gap between blockchain and off-chain applications.

LINK is the Token of the network, used to pay for services on the network, including data retrieval, formatting, and off-chain computation. It incentivizes data providers to act honestly and ensures the accuracy of the data used by smart contracts.

USDC (USD Coin)

USDC is a stablecoin pegged to the US dollar at a 1:1 ratio, providing crypto assets users with stability, shielding them from the volatility of the crypto assets market. USDC is widely used for trading, saving, and other financial transactions where currency stability is crucial.

As an ERC20 Token, USDC benefits from the security and interoperability of the Ethereum network, allowing it to be easily integrated into wallets, exchanges, and other financial applications.

3.Uniswap (UNI)

Uniswap is one of the most popular and widely used decentralized Crypto Assets exchanges )DEX( in the market and has been a leader in the field for some time. It supports peer-to-peer )P2P( market-making, providing users with a convenient way to trade various Crypto Assets without relying on centralized third parties.

The native token of the Uniswap ecosystem is UNI. UNI can be used for various purposes, including as a governance token (allowing you to participate in the voting process), liquidity mining, and community treasury.

Basic Attention Token (BAT)

BAT is an important component of the blockchain-based digital advertising platform of the Brave browser, developed by Brendan Eich, co-founder of Mozilla and Firefox, aimed at leveraging blockchain technology to enhance the security, efficiency, and assurance of digital advertising.

BAT is the native Token of Brave, a web browser built on the Ethereum network. Users can earn BAT by watching ads and can use the Token to directly support content creators, thus creating a new way to interact with online content and advertising.

Aave (AAVE)

Aave is a decentralized crypto assets platform that allows people to lend and borrow crypto assets. It uses smart contracts to automate the lending process, specifying the allocation of funds, handling of collateral, and collection of fees. Lenders earn interest by depositing digital assets into specially created liquidity pools, while borrowers can use these liquidity pools to take out loans using crypto assets as collateral.

The native Token of the protocol, AAVE, provides holders with platform fee discounts and serves as a governance Token, giving holders a say in the future development of the protocol.

Frequently Asked Questions

Which is better, TRC20 or ERC20?

Both token standards have their pros and cons. TRC20 is faster and cheaper, while ERC20 supports a wider variety of crypto assets. Ultimately, your decision largely depends on your priorities.

Can I convert TRC20 to ERC20?

Yes, you can convert certain specific TRC20 Tokens to ERC20 Tokens. For example, USDT can be used on both token standards.

Are TRC and TRX the same?

No, TRC20 is a token standard based on the Tron blockchain, while TRX is the native token and governance token of the Tron ecosystem.

Are TRC and ERC the same?

No. TRC20 is a Token standard developed based on the Tron blockchain, while ERC20 is a Token standard built on the Ethereum network. Each Token standard has its own characteristics.

How do I know if my USDT is ERC20 or TRC20?

You only need to check the address. TRC20 addresses start with "T", while ERC20 addresses start with "0x", just like any Ethereum-based crypto project.

TRC20 and ERC20 are both token standards, and they have similarities, especially considering that TRON was built as an alternative to Ethereum and uses the same programming language, Solidity, as ETH.

When it comes to comparing the two, you can easily see that Tron tends to be faster and offers lower transaction fees, but no network can surpass Ethereum in terms of the number of crypto assets projects, right?

Therefore, each Token standard has its unique features and potential flaws, but you must carefully formulate a plan to choose the standard that best fits your funds.