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Give me the basics

ERC-223 is a token standard on the Ethereum blockchain. It is an upgrade to the ERC-20 standard and offers improvements such as reduced gas fees and the ability to handle tokens received directly from smart contracts. ERC-223 tokens can also be used for smart contract interactions and can provide enhanced security features. This standard is designed to increase the efficiency and reduce the risk of lost tokens during transactions compared to ERC-20.

In-depth explanation

Ethereum is a decentralized platform for creating decentralized applications, commonly referred to as DApps. These DApps are powered by smart contracts, which are self-executing programs that automatically enforce the terms of an agreement.

One of the key features of Ethereum is the ability to create and trade tokens on the blockchain. ERC-20 is currently the most widely used token standard on Ethereum, allowing for the creation of fungible tokens (tokens that can be exchanged for each other, such as currency).

However, ERC-20 has some limitations, such as the inability to handle tokens received directly from smart contracts and higher gas fees for transactions. To address these issues, the ERC-223 token standard was introduced in 2017 as an upgrade to ERC-20.

ERC-223 offers several improvements over ERC-20. One of the most significant is the ability to handle tokens received directly from smart contracts. In ERC-20, if a smart contract receives a token, it cannot handle it and the token is lost. ERC-223 resolves this issue by allowing smart contracts to interact with tokens directly, avoiding lost tokens and reducing gas fees.

Another key advantage of ERC-223 is its enhanced security features. ERC-20 tokens can be accidentally sent to a smart contract that doesn’t support them, causing the tokens to become stuck and unrecoverable. ERC-223 tokens prevent this by requiring the contract to have a “tokenFallback” function, which checks that the receiving address is able to handle the tokens.

ERC-223 also includes other features such as “transfer” and “transferFrom” functions that provide additional security checks during token transfers, such as checking for sufficient token balances and preventing accidental token transfers to smart contracts.

Finally, ERC-223 also offers gas-saving improvements over ERC-20. With ERC-20, token transfers require two transactions, while ERC-223 only requires one, reducing the overall cost of transactions.

In summary, ERC-223 is an improved token standard for the Ethereum blockchain, providing enhanced security features, the ability to handle tokens received directly from smart contracts, and gas-saving improvements over ERC-20. As the Ethereum ecosystem continues to grow and evolve, ERC-223 is likely to play an increasingly important role in the development of decentralized applications and the token economy.