Chinese public blockchain Nervos has launched a new token standard for use in a branch of blockchain-based finance to compete with Ethereum’s popular ERC-20 standard used in developing smart contracts.
Why it matters: With the launch of the new token standard, Hangzhou-based Nervos continues its decentralized finance (Defi) push, enabling many assets to be traded on its network.
- Defi is a blockchain-based experimental form of finance which aims to give users full control of their assets.
- Nervos’s Simple User-Defined Token (SUDT) will give “full ownership and control” of the token to the user, the company said. Creators cannot modify or seize tokens without user consent.
“The launch of the SUDT standard is a significant milestone in the progression of DeFi on Nervos.”—Kevin Wang, Nervos co-founder
Details: Developers can use SUDT to issue their own tokens on Nervos’s network. SUDT defines the implementation of tokens in smart contracts, guides their distribution on the network, and secures them on Nervos’s Layer 1 blockchain, Nervos said in a statement.
- Before the new standard, only Nervos Network tokens, traded as CKB, could be used in decentralized applications built on Nervos’s network.
- One team of developers, Portal Wallet, launched a coffee token using SUDT. Each one of the coffee tokens can be converted to one cup of coffee at Starbucks.
Context: There are many token standards in blockchain. The most popular is ERC-20, an Ethereum-based standard that is widely used for smart contract development.
- Nervos has been all-in on Defi before the Defi craze took over China’s blockchain ecosystem. In a blog post in its official Medium account in a year ago, it identified Defi as a major use case for the Nervos Network.
- Nervos is one of the few public blockchains available on the Blockchain Services Network, a global “internet of blockchains” supported by the Chinese government.
- Founded in 2018, Nervos is a proof of work public blockchain. It has received $100 million in funding from some of China’s best-known blockchain funds like Wanxiang Blockchain and Hashkey Capital, according to startup data platform Crunchbase.