ERC-20 vs ERC-721 vs ERC-1155: Ethereum Token Standards Compared

ERC-20, ERC-721, and ERC-1155 are the three most widely used Ethereum token standards, distinguished by whether they represent interchangeable (fungible) assets, unique (non-fungible) assets, or a flexible combination of both types within a single contract. Choosing the right one depends entirely on what a project is actually trying to represent on-chain.

ERC-20: Fungible Tokens

ERC-20 is the standard for assets where every unit is identical and interchangeable — currencies, governance tokens, stablecoins, and most utility tokens. It tracks ownership through simple aggregate balances per address, with functions like transfer, approve, and balanceOf forming the backbone of nearly all fungible token interactions across DeFi.

Best suited for: stablecoins, governance tokens, reward tokens, wrapped assets, liquidity pool shares.

ERC-721: Non-Fungible Tokens

ERC-721 represents assets where each individual token is unique and tracked by a distinct token ID, rather than an aggregate balance. Each token can carry its own metadata, and ownership is tracked per token ID rather than per quantity.

Best suited for: digital art, collectible series, domain names (ENS), unique event tickets, one-of-a-kind in-game items.

ERC-1155: The Multi-Token Standard

ERC-1155 was designed to address a practical limitation of using ERC-721 for large collections: deploying a separate ERC-721 contract (or minting many individual token IDs) for every asset type can be gas-inefficient, especially for projects that need many different item types, some fungible and some not, within the same ecosystem.

ERC-1155 allows a single contract to manage multiple token types simultaneously, where each token ID can represent either:

• A fungible-style asset (like an in-game currency or a stack of identical items), where balances are tracked as quantities.
• A non-fungible-style asset (a unique item), where the balance is effectively either 0 or 1.

Key advantages of ERC-1155 include:

• Batch transfers — moving multiple token types in a single transaction, reducing gas costs compared to separate ERC-20 or ERC-721 transfers.
• Reduced contract deployment overhead — one contract can house an entire catalog of item types instead of needing many separate deployments.
• Flexibility — a single ecosystem (like a game) can represent both its fungible in-game currency and its unique collectible items under one contract.

Side-by-Side Comparison

Feature	ERC-20	ERC-721	ERC-1155
Fungibility	Fully fungible	Fully non-fungible	Both, per token ID
Ownership tracking	Aggregate balance	Per unique token ID	Per token ID, with quantity
Batch transfers	Not native	Not native	Native support
Gas efficiency for many item types	N/A (single asset type)	Lower for large collections	Higher, due to batching
Typical use case	Currencies, governance	Art, collectibles, domains	Gaming items, mixed collections
Metadata per unit	Usually none	Often rich metadata per token	Rich metadata per token type

How Developers Actually Choose

In practice, the decision usually comes down to a few questions:

• Is the asset interchangeable? If yes, ERC-20 is almost always the right and simplest choice.
• Is the asset unique and does the project only need one type of unique asset? ERC-721 is typically simpler to integrate with existing NFT marketplaces and tooling, since it's the more widely supported unique-asset standard historically.
• Does the project need many different asset types — some fungible, some unique — managed together, or does it need efficient batch operations? ERC-1155 tends to be the better fit, which is why it's especially popular in blockchain gaming, where a single game might need currency, resources, and unique items all at once.

Marketplace and wallet support is also a practical factor: while ERC-1155 has become widely supported across major NFT marketplaces, ERC-721 still has the deepest and most mature tooling specifically built around single, unique collectibles.

Risks Common to All Three

Regardless of standard, tokens are only as trustworthy as the contract code behind them. Standards define an interface, not a guarantee of good behavior — a contract can technically implement ERC-20 or ERC-721 functions while still containing malicious logic, such as hidden owner privileges to freeze transfers or mint unlimited supply. Reviewing contract source code, audit history, and reputation matters more than which standard a token happens to use. See our overview of common DeFi scams for red flags to watch for.

Bottom Line

ERC-20 handles fungible assets, ERC-721 handles unique one-of-a-kind assets, and ERC-1155 offers a flexible, gas-efficient middle ground for projects needing both types — or many types — under a single contract. None of the three standards guarantees a token's safety or legitimacy on its own; that still depends on the underlying contract code and its issuer. Browse live token and protocol data across standards on MrDeFi's DeFi page.