ERC-777 is a tradable token standard spun out from ERC-20 to enable a new way to engage with a token contract while staying backward compatible.
In simpler words, the ERC-777 tokenization standard refers to Ethereum's blockchain protocol that specifies the type of tokens compatible with ETH.
It facilitates complicated token trade interactions and assists the removal of ambiguity around decimals, minting, and burning. It utilizes a distinctively effective feature called a hook.
When tokens are delivered to a computer-based analytical contract, it activates a hook mechanism that streamlines how accounts and contracts communicate when receiving tokens. Furthermore, ERC-777 tokens are significantly less likely to get stuck in a contract, which is traditionally seen as a problem with ERC-20 tokens.
ERC777, like ERC20, is a standard for generating tokens on the Ethereum Blockchain. Hooks are programmed into the standard. If you transfer ETH to a smart contract, it will be alerted about the incoming ETH through the hooks, a feature that ERC20 tokens don’t have. The following are the benefits of this standard:
Despite the fact that ERC-777 had some early security problems that have already been resolved, it may have certain drawbacks, just like any other token. This is the reason, updated versions, such as ERC-820, have already been introduced.
We can transmit tokens to any Ethereum address, which essentially implies that we can send tokens to contracts that do not support them, thereby locking them forever.
What appears to be a problem is that, even if the tokens may be manually moved, it appears to be difficult to determine which tokens originated from whom and who sent them back.
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