What you Need to Know About the new Ethereum Token Standard ERC-4626
Ethereum has been facing a lot of scalability and performance issues in its actual state. Some intermittence and high gas fees are some examples of things that users and developers alike must overcome.
This calls for some drastic changes inside its structure; one of them is the proposal of the new token standard ERC-4626, which could help things get more interesting.
What is ERC-4626?
The proposal was first published on 4th January by Joey Santoro, co-founder of Fei protocol. ERC-4626 is something like a “tokenized vault standard”; you can create standards for yield-bearing tokens so they can be built far more easily than before.
But there’s more: developers will be able to create shared interfaces for tokens stored in these vaults so the time needed to conclude projects could be shorter. In short, things can become faster and cheaper for everyone.
Santoro was invited to a podcast at Linum Labs. He stated:
“It’s just an interface for depositing and withdrawing the token from any kind of strategy that handles a single token.”
According to him, these strategies could help DeFi to “explode” (positively, of course) since its implementation grants benefits to users and developers.
In short, the protocol could bring the following benefits to Ethereum:
Flexible and easier integrations of tokens
Even more security for users
Time-saving solutions for developers
Check Santoro’s tweet:
“ERC-4626 standardizes this paradigm of depositing and withdrawing from a vault denominated in a single token. This makes it incredibly easy for aggregators and plugins, which now only need to implement a single interface rather than dozens of adapters.”
The developer defines its project as a “DeFi Lego” since it could be easily implemented and it’s cross-compatible with other technologies.
For starters, Santoro added that TRIBE (the native token of Fei protocol) is going to use the new standard extensively.
The bottom line
We are surely hoping that the protocol can be as helpful as it sounds for users and developers alike. Ethereum needs some drastic changes to withstand most of its competitors.
If everything continues to run smoothly, we could even see the birth of Ethereum 2.0 later this year. Fingers crossed!