Understanding Token Standards to Prevent Lost Funds in Crypto Transfers

Imagine planning to send 100 USDT to a friend. You transfer it, but then hear: "Where's my money?" The issue is that you've used the BEP-20 network, while your friend provided an ERC-20 address. This is similar to sending a parcel via CDEK when the recipient expects it through the Russian Post. Tokens get stuck because the networks are different and incompatible. To understand this, it's essential to grasp token standards. **What is a token standard?** It's a set of rules dictating how tokens are created, transferred, and used. Think of it as a file format; if you send a document in an unsupported format, the recipient can't open it. **ERC-20: The pioneer and most common** ERC-20 is a token standard on the Ethereum network. It was the first and remains the most popular, with thousands of tokens issued under it—ranging from USDT to meme coins. Almost all wallets, exchanges, and DeFi projects support ERC-20. However, it has downsides: the network often congests, and transaction fees (gas) are high. **BEP-20: A fast and cheap alternative** BEP-20 is similar to ERC-20 but operates on the BNB Chain network. Transactions are faster and cheaper than in ERC-20, but the network is less decentralized—a significant drawback for some. **TRC-20: Low fees on Tron** TRC-20 is the token standard on the Tron network, offering minimal fees and high speed. It’s ideal for simple transfers of USDT and other tokens. However, compared to Ethereum and Binance Smart Chain, Tron has fewer integrations with DeFi platforms. **Why is it crucial to know these standards?** Tokens like USDT exist in multiple versions across different networks—Ethereum, Binance Smart Chain, Tron, etc. Each operates under its own standard and network. Sending tokens to an incompatible network results in stuck or lost funds. This isn't a blockchain bug but a characteristic of how these systems work. Always check the network before sending tokens to avoid issues.