Crypto Glossary

ERC-223

ERC-223 is an Ethereum token standard that is powered by smart contracts that enable users to securely transfer tokens to a digital wallet.

What Is ERC-223?

ERC-223 is an expansion of the ERC-20 protocol, and was created as a solution to the ERC-20 bug by an Ethereum developer whose Reddit username is ''Dexaran''. 

ERC stands for "Ethereum Request for Comment". The ERC 223 token platform is powered by smart contracts and enables users to securely transfer tokens to a digital wallet.

The fact that Ethereum has established tokenization standards simplifies the process. Depending on what the application is intended to do, different types can be tokenized using different standards.

Some popular Ethereum tokens include the ERC-20, ERC-721, and ERC-777 standards.

While the ERC-20 standard is extremely useful, it is far from ideal. For example, one particularly egregious design flaw in ERC-20 allowed tokens to be lost when people sent them to a smart contract by mistake using the same process they would use to send tokens to an ordinary wallet

Unfortunately, this has already resulted in the loss of more than $3 million in ERC-20 tokens.

This design flaw is addressed by ERC-223, which allows users to transfer tokens to smart contracts and wallets that perform the same function. Furthermore, ERC-223 tokens outperform ERC-20 tokens in terms of efficiency by requiring only one step rather than two for transactions. 

ERC-223 retains all of the original functionality while addressing the aforementioned bugs. The new standard introduces enhancements and capabilities that address some of the most serious ERC-20 issues, particularly when interacting with other smart contracts.

The transfer function of the ERC-223 includes a parameter that makes sure that the destination address is a smart contract. If this is the case, the transaction calls the token Fallback function in the smart contract and that can be returned to the sender's account using this function, after which the tokens are then transferred to the smart contract.

No tokens are lost because the updated transfer function now works for smart contracts as well.

Here are some benefits of the ERC-223 token:

  • The ERC-223 token is powered by automated smart contracts to ensure the smooth flow of transactions.
  • It maintains transparency in user transaction details.
  • It is completely decentralized to eliminate the need for intermediaries such as banks, allowing users to benefit from lower gas fees and wait times.
  • The ERC-223 token development platform allows investors to gain instant liquidity and high ROI as passive income.
  • It allows tokens to be deposited into a contract in a single transaction. This prevents additional blockchain bloating.
  • To counter hacking activities, the ERC 223 token development platform incorporates multi-level security features, such as HTTP authentication, end-to-end encryption, and escrow protection.
  • Token transactions are performed in a manner similar to Ether transactions.

ERC-223 can be thought of as a superset of ERC-20, but only time will tell which token will become the Ethereum ecosystem's ultimate standard.

Be the first to know about Crypto news everyday

Get crypto analysis, news and updates right to your inbox! Sign up here so you don't miss a single newsletter.
people
iosandroid

© 2021 COINCU Financial Group Inc. Address: Road Town, Tortola, British Virgin Islands (BVI).

Email us: [email protected]