The Chinese project Nervos has introduced its own standard for creating tokens – Simple User Defined Token (SUDT) – as an alternative to the ERC-20 standard.
Nervos Director of Product Development Cipher Wang said that the new standard was created in honor of the anniversary of the launch of the Lina mainnet, and now developers can create new cryptocurrencies based on the Nervos blockchain. SUDT is designed to compete with the ERC-20 standard, especially in the decentralized finance (DeFi) industry.
Nervos management has stated that SUDT has several key advantages over the ERC-20 standard. So, to use the new ERC-20 tokens, developers must re-deploy smart contracts in the Ethereum chain, which entails additional technical efforts and an increase in the cost of gas.
Although ERC-20 provides clear guidance on the interface of tokens, this standard does not provide guidance on how to launch them. This indicates a lack of standardization for ERC-20 tokens, while SUDT defines the rules for the token interface and their implementation.
There are two benefits to this approach, according to Nervos management. First, developers won’t have to redeploy new smart contracts when issuing tokens. Secondly, thanks to standardization, each token will be created in a certain way, which will reduce the likelihood of bugs. Wang said:
“DeFi has a white-listing concept. For example, the Maker and Compound lending protocols only select certain assets as collateral. This is due to the fact that unknown ERC-20 tokens may contain errors that are likely to lead to hacks. ”
He added that Nervos wants to avoid such a whitelist in its ecosystem by creating a stricter token standard. In addition, the launch of SUDT tokens will be much cheaper than ERC-20.
With the DeFi hype, it costs thousands of dollars to deploy smart contracts. However, using the Nervos blockchain, developers will not need to launch a new smart contract, and issuing tokens will be no different from a simple transaction worth a few cents.
To demonstrate the capabilities of SUDT, Nervos used the Portal Wallet cryptocurrency wallet. The creators of Nervos tried to buy coffee from Starbucks using the COFFEE token of the SUDT standard. Nervos co-founder Jan Xie said the firm will build additional tools to expand the use of SUDT.
In addition, last fall, it became known that Nervos is collaborating with the Huobi cryptocurrency exchange, helping it create its own blockchain Huobi Chain.
