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Blockchain Protocols

Dive deep into the technical standards and protocols that define how blockchain networks operate, from token standards to consensus mechanisms.

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Ethereum

Ethereum Protocols

Ethereum's ERC standards form the backbone of decentralized applications, enabling everything from NFTs to decentralized finance. Explore ZK upgrades and L2 evolution.

ERC-20: Fungible Token Standard

The foundational standard for creating interchangeable tokens on Ethereum. ERC-20 defines a common interface for tokens, enabling seamless integration across wallets, exchanges, and dApps.

Key Functions:

  • totalSupply() - Returns the total token supply
  • balanceOf(address) - Returns account balance
  • transfer(address, uint256) - Transfers tokens
  • approve(address, uint256) - Approves spending
  • transferFrom(address, address, uint256) - Transfers from approved account

ERC-20 powers millions of tokens including stablecoins like USDC and governance tokens like UNI.

ERC-721: Non-Fungible Token Standard

The standard for unique, indivisible tokens representing ownership of digital or physical assets. Each ERC-721 token has a unique identifier and metadata.

Key Functions:

  • ownerOf(uint256 tokenId) - Returns token owner
  • transferFrom(address, address, uint256) - Transfers token
  • approve(address, uint256) - Approves transfer
  • getApproved(uint256) - Returns approved address
  • setApprovalForAll(address, bool) - Sets operator approval

ERC-721 is the foundation of NFTs, used in projects like CryptoPunks, Bored Ape Yacht Club, and digital art platforms.

ERC-1155: Multi-Token Standard

A versatile standard that allows a single contract to manage multiple token types, both fungible and non-fungible, efficiently reducing gas costs.

Key Functions:

  • balanceOf(address, uint256) - Returns balance of specific token
  • balanceOfBatch(address[], uint256[]) - Batch balance query
  • safeTransferFrom(address, address, uint256, uint256, bytes) - Safe transfer
  • safeBatchTransferFrom(...) - Batch transfer
  • setApprovalForAll(address, bool) - Sets operator approval

ERC-1155 is used in gaming and collectibles, allowing efficient management of multiple assets in a single transaction.

ERC-165: Interface Detection

A lightweight standard for detecting which interfaces a contract implements, enabling safe interoperability between token standards and tooling.

Key Function:

  • supportsInterface(bytes4) - Checks interface support

ERC-165 is widely used by ERC-721 and ERC-1155 to advertise supported capabilities.

ERC-777: Advanced Token Standard

An ERC-20 compatible standard that adds hooks for send/receive events, enabling richer token logic and safer interactions.

Key Features:

  • Operator system: Delegated transfers
  • Send/receive hooks: `tokensToSend`, `tokensReceived`
  • Backwards compatible: ERC-20 methods supported

ERC-777 enables more composable token behavior for DeFi and complex contracts.

ERC-4626: Tokenized Vaults

A standard for yield-bearing vaults that exposes consistent deposit, withdraw, and accounting functions for DeFi protocols.

Key Functions:

  • deposit(uint256, address) - Deposit assets
  • withdraw(uint256, address, address) - Withdraw assets
  • convertToShares(uint256) - Asset/share math

ERC-4626 improves integration across lending, staking, and yield strategies.

ERC-2981: NFT Royalties

Standardizes royalty information for NFTs, allowing marketplaces to retrieve creator royalty data on secondary sales.

Key Function:

  • royaltyInfo(uint256, uint256) - Returns receiver and amount

ERC-2981 improves creator monetization consistency across NFT platforms.

ERC-4907: NFT Rentals

Introduces “user” and “expires” roles for NFTs, enabling time-bound rentals without transferring ownership.

Key Features:

  • User role: Temporary access control
  • Expiration: Automatic access revocation

ERC-4907 supports gaming, memberships, and subscription access models.

EIP-712: Typed Structured Data

A standard for signing typed data, improving security and readability for off-chain signatures and meta-transactions.

Used For:

  • Permit flows: Gasless approvals
  • Meta-transactions: Relayed execution
  • Clear signing: Human-readable payloads

EIP-712 is a core building block for modern wallet UX and DeFi apps.

EIP-1559: Fee Market

Introduces base fees and fee burning to stabilize gas pricing and improve fee predictability for users.

Key Concepts:

  • Base fee: Algorithmic pricing
  • Priority tip: Incentive for miners/validators
  • Fee burn: Reduces supply over time

EIP-1559 redefined Ethereum’s transaction fee mechanism and economics.

ERC-3643: Token for Fundraising

A comprehensive standard for security tokens, incorporating compliance features, identity verification, and regulatory requirements for tokenized securities.

Key Components:

  • Token Contract: Manages token supply and transfers
  • Identity Registry: Verifies investor identities
  • Compliance Module: Enforces transfer restrictions
  • Claim Topics Registry: Defines required claims for investors
  • Trusted Issuers Registry: Manages authorized claim issuers

ERC-3643 enables compliant token offerings, bridging traditional finance with blockchain technology.

Quick Check

Which standard powers fungible tokens?

ERC-20 defines the interface for fungible tokens.

What does EIP-1559 change?

It introduces base fees, tips, and fee burning for more predictable gas pricing.

Interactive

Mini Simulators

Rollup Cost Simulator

Adjust batch size to see how rollups reduce per-transaction cost.

400
L1 Cost: $5.00
Est. L2 Cost: $0.013

Custody vs Non-Custody

Compare security tradeoffs between custodial and self-custody models.

Custodial wallets simplify onboarding but rely on a trusted third party.
Solana

Solana Protocols

Solana's high-performance architecture relies on innovative protocols for scalability, security, and developer experience. It leans on parallel execution and account-based concurrency.

SPL Token Standard

Solana's equivalent to ERC-20, SPL (Solana Program Library) tokens enable the creation of fungible and non-fungible tokens on the Solana blockchain.

Key Features:

  • Token Program: Core program for token operations
  • Associated Token Accounts: Automatic account creation
  • Token Metadata: Rich metadata for tokens
  • Token Extensions: Advanced features like confidential transfers

SPL tokens power DeFi protocols, NFTs, and gaming applications on Solana, benefiting from the network's high throughput.

Metaplex Token Metadata

The de facto NFT metadata standard on Solana, defining creators, royalties, collections, and verification primitives.

Key Capabilities:

  • Creators: Verified creator lists
  • Royalties: On-chain royalty data
  • Collections: Verified grouping of assets

Metaplex is core to Solana NFT marketplaces and creator tooling.

Token-2022 Extensions

An extended SPL token program that adds configurable features such as transfer fees, confidential transfers, and non-transferable tokens.

Extensions:

  • Transfer fees: Built-in fee logic
  • Confidential transfers: Privacy by design
  • Non-transferable: Soulbound-like tokens

Token-2022 unlocks advanced compliance and product design on Solana.

Program Derived Addresses

Deterministic addresses controlled by programs rather than private keys. PDAs enable complex program logic and cross-program invocations.

Key Characteristics:

  • Deterministic: Generated from program ID and seeds
  • Program-controlled: No private key exists
  • Cross-program calls: Enable composability
  • Data storage: Store program state securely

PDAs are fundamental to Solana's programming model, enabling features like escrow accounts and decentralized exchanges.

Sealevel Parallel Runtime

Solana’s execution environment that runs non-conflicting transactions in parallel, powering high throughput and low latency.

Core Ideas:

  • Parallel execution: Account-based concurrency
  • Pipeline: Optimized transaction scheduling
  • Composability: Cross-program invocations

Sealevel is central to Solana’s performance advantage for real-time apps.

Tower BFT Consensus

Solana's Proof-of-Stake consensus mechanism, optimized for high throughput and low latency through leader rotation and stake-weighted voting.

Key Components:

  • Leader Schedule: Deterministic leader rotation
  • Stake-weighted voting: Validator influence based on stake
  • Tower BFT: Optimistic confirmation protocol
  • Slashing: Penalties for malicious behavior

Tower BFT enables Solana to process 65,000+ transactions per second while maintaining decentralization.

Quick Check

What does SPL standardize?

Token creation and transfer primitives on Solana.

Why are PDAs important?

They let programs control deterministic addresses without private keys.

Bitcoin

Bitcoin Protocols

While Bitcoin lacks formal "standards" like ERCs, it has evolved through Bitcoin Improvement Proposals (BIPs) and protocol upgrades.

Segregated Witness (SegWit)

A protocol upgrade that separates transaction signatures from transaction data, enabling second-layer solutions and fixing transaction malleability.

Key Benefits:

  • Scalability: Increases block capacity
  • Lightning Network: Enables off-chain transactions
  • Transaction Malleability Fix: Prevents txid changes
  • Script upgrades: Foundation for future improvements

SegWit (BIP 141) was activated in 2017 and paved the way for Bitcoin's layer-2 ecosystem.

Taproot & Schnorr Signatures

A major upgrade introducing Schnorr signatures and Taproot, improving privacy, efficiency, and enabling advanced smart contract functionality.

Key Features:

  • Schnorr Signatures: More efficient and private signing
  • Taproot: Hides complex scripts behind single keys
  • MAST: Merklelized Abstract Syntax Trees
  • Privacy: Enhanced transaction privacy

Taproot (BIP 340-342) was activated in November 2021, bringing Bitcoin closer to advanced smart contract capabilities.

BIP-32/39/44: HD Wallet Standards

Defines hierarchical deterministic wallets, mnemonic seed phrases, and standardized derivation paths for secure key management.

Key Benefits:

  • Single seed: Infinite addresses
  • Recovery phrases: Human-readable backups
  • Standard paths: Consistent wallet behavior

These standards power most modern Bitcoin and multi-chain wallets.

PSBT (BIP-174): Partially Signed Transactions

A standard format for constructing and sharing transactions between wallets before final signing.

Use Cases:

  • Multisig flows: Multiple signers
  • Hardware wallets: Offline signing
  • Wallet interoperability: Safer coordination

PSBT improves security and compatibility in complex signing workflows.

Lightning Network

A layer-2 protocol for instant, low-fee Bitcoin payments using payment channels and routed HTLCs.

Core Concepts:

  • Payment channels: Off-chain settlement
  • HTLCs: Trustless routing
  • Instant payments: Low-latency UX

Lightning extends Bitcoin into micropayments and real-time commerce.

Miniscript

A policy language that makes Bitcoin scripts easier to analyze, compose, and securely implement.

Why It Matters:

  • Composable policies: Safer scripts
  • Static analysis: Predictable spending
  • Wallet support: Standardized complex outputs

Miniscript improves security for multisig and advanced spending conditions.

Ordinals Protocol

A protocol for creating and tracking NFTs on Bitcoin by inscribing data directly onto satoshis, the smallest unit of Bitcoin.

How it Works:

  • Inscriptions: Data inscribed on individual satoshis
  • Ordinals: Numbering system for satoshis
  • Recursive Inscriptions: References to other inscriptions
  • Metadata: Content type and attributes

Ordinals have sparked renewed interest in Bitcoin's capabilities beyond simple value transfer, creating a new ecosystem of digital artifacts.

Quick Check

What did SegWit fix?

Transaction malleability and block capacity constraints.

What does Lightning enable?

Instant, low-fee payments via off-chain channels.

Other Protocols

Other Relevant Protocols

Emerging standards and protocols shaping the future of blockchain interoperability and functionality, including MPC and privacy layers.

ERC-4337: Account Abstraction

Enables smart contract wallets with features like gasless transactions, batched operations, and social recovery.

IBC: Inter-Blockchain Communication

A standard for secure, trust-minimized messaging and asset transfers between Cosmos-based chains.

XCM: Cross-Consensus Messaging

Polkadot’s messaging format for cross-chain instructions between parachains and relay chains.

Cross-Chain Protocols

Bridge frameworks and messaging layers that enable assets and data to move safely between different networks.

OP Stack: Optimistic Rollups

A modular rollup framework for building Ethereum L2s with shared security and tooling.

ZK-Rollups

Layer-2 protocols that scale Ethereum using zero-knowledge proofs for validity.

EIP-4844: Proto-Danksharding

Introduces blob-carrying transactions to reduce rollup data costs and improve scalability.

DeFi Standards

Protocols like Uniswap V3, Compound, and Aave that standardize decentralized finance operations.

CCIP: Cross-Chain Interoperability

A secure messaging and token transfer protocol for cross-chain applications.

Layer 2 Protocols

Rollups, state channels, and shared sequencers that scale throughput and reduce costs.

DID & Verifiable Credentials

Identity standards that enable portable, user-controlled credentials across apps and chains.

Tendermint / CometBFT

A proven BFT consensus protocol powering many Cosmos SDK chains.

Avalanche Subnets

Application-specific subnets with configurable virtual machines and validator sets.

NEAR Sharding

Dynamic sharding design that scales throughput while keeping low-latency finality.

Quick Check

What does IBC do?

It enables secure messaging and asset transfers between chains.

Why are L2s important?

They scale throughput while lowering costs on base layers.