Blockchain Developer Certification Practice

Which standard do fungible tokens typically follow?

1. ERC-20 or ERC-777 standards.

2. ERC-721 standard.

3. ERC-1155 standard.

4. ERC-223 standard.

The correct answer is: ERC-20 or ERC-777 standards.

Fungible tokens typically follow the ERC-20 or ERC-777 standards because these standards are specifically designed for creating and managing tokens that are interchangeable. Fungible tokens are identical and can be exchanged on a one-to-one basis; for example, one unit of a cryptocurrency like Ethereum is equivalent to another unit of the same cryptocurrency, similar to currencies like dollars or euros. The ERC-20 standard provides a basic framework for fungible tokens on the Ethereum blockchain, defining a common set of rules that all tokens can adhere to, such as how tokens can be transferred and how users can access data regarding the tokens. This standard encourages interoperability between different projects and platforms, enabling fungible tokens to be easily traded and utilized across various decentralized applications. The ERC-777 standard builds upon the ERC-20 standard by introducing advanced features like hooks for a more flexible transfer process and enhanced operator functionality, which also aligns with the concept of fungible tokens but with added capabilities. In contrast, the ERC-721 standard is for non-fungible tokens (NFTs), which are unique and not interchangeable with one another, as each token represents a distinct asset. The ERC-1155 standard allows for the creation of both fungible and non-fungible tokens within