ERC (Ethereum Request for Comments) is a standard for smart contracts that run on the Ethereum blockchain. These smart contracts are self-executing contracts in which the buyer-seller agreement conditions directly translate into lines of code.
They are for various applications, including supply chain management, voting systems, financial transactions, real estate, and tokenized assets in which individuals can invest.
1. Contract Code
To create an ERC smart contract, you must first write the contract code using a programming language such as Solidity. This code will define the contract’s terms and conditions and any essential logic for contract execution.
The Ethereum blockchain compiles and deploys the code, turning it into a self-executing contract that is publicly accessible and immutable.
Users can interact with the contract by sending transactions which trigger the contract’s code to execute and fulfil the agreed-upon terms. Blockchain records the result of contract execution, providing a transparent and verifiable transaction record.
3. Transparent and Rigid
One of the key benefits of using ERC smart contracts is their transparency and immutability. The Ethereum blockchain prevents the alteration or deletion of a contract once it gets linked to the blockchain. This ensures that all parties involved in the contract can trust the terms of the agreement.
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Smart contracts can automate various tasks, including financial transactions, supply chain management, and voting systems. Once the contract terms are final, the contract will automatically execute and enforce the terms of the agreement without the need for any manual intervention.
This can assist in reducing the chance of errors or misunderstandings while also making the contract execution process faster and more efficient.
ERC-20 is the most widely used standard for smart contracts that involves the exchange of tokens. It specifies the requirements for a token to identify an ERC-20 token. Besides that, it allows the creation of new tokens for linking it with current Ethereum applications.
ERC-721 is a standard for non-fungible tokens, which are tokens that represent unique assets such as artwork or collectables. These tokens are functional in online marketplaces for buying and selling like traditional physical assets.
ERC-1155 is a new standard for creating fungible and non-fungible tokens in a single smart contract. This can be more efficient than using separate contracts for each type of token.
8. Remove Mediator
In certain transactions, smart contracts can minimise the need for mediators such as lawyers or brokers, thereby leading to reduced costs and faster processing times.
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9. Prevent Corruption
Smart contracts enforce regulatory compliance while reducing the risk of fraud or corruption. Smart contracts are frequently associated with decentralised finance (Defi) apps and blockchain-based financial services.
ERC standards develop through a community-driven process with proposals submitted and reviewed by the Ethereum community before acceptance and implementation.
Overall, ERC smart contracts can completely transform how we do business and trade value. They provide a secure and efficient way to automate and manage complex agreements and processes on the Ethereum platform.
With their automated and enforced contract conditions, ERC contracts help you decrease costs and boost productivity in various businesses.
As the use of blockchain technology continues to grow, we can expect to see them becoming increasingly common in a wide range of applications.