Use ERC-20 when every unit is identical (money, shares of one class, fund units). Use ERC-721 when every item is unique (a title, a document, a specific asset). Use ERC-1155 when you need many asset types — fungible, non-fungible or both — in one contract with batch operations. For regulated securities, add a compliance layer such as ERC-3643 (ERC-20-based) or ERC-7943 (works with all three).
Key takeaways
- Fungibility is the deciding question: identical units → ERC-20; unique items → ERC-721; many classes or mixed → ERC-1155.
- Tooling: all three are universally supported, ERC-20 most deeply in DeFi, ERC-721 in NFT marketplaces.
- Gas: ERC-1155 batch operations win when moving many asset types; ERC-20 is cheapest for a single asset.
- Compliance: none of the three includes investor eligibility — plan it from day one.
Side-by-side comparison
| Criterion | ERC-20 | ERC-721 | ERC-1155 |
|---|---|---|---|
| Asset model | Fungible units | Unique tokens | Many IDs, each fungible or unique |
| Contracts per asset | One per asset | One per collection | One for many assets |
| Balance lookup | balanceOf(owner) |
ownerOf(tokenId) |
balanceOf(owner, id) |
| Batch transfers | No | No | Yes |
| Receiver safety check | No | safeTransferFrom |
Always (hooks) |
| Approvals | Amount per spender | Per token or operator | Operator only |
| Metadata | name/symbol/decimals | tokenURI per token |
uri(id) template |
| DeFi integration | Deepest | Limited | Moderate |
| Typical RWA fit | Stablecoins, fund units, equity class | Titles, e-BLs, certificates | Property portfolios, energy/carbon units, tranches |
Real-world asset examples
ERC-20
- Stablecoins and settlement coins.
- Tokenized money-market fund units.
- A single class of shares in an SPV (often via ERC-3643).
ERC-721
- Electronic bill of lading — one NFT per document. See our e-BL case study.
- A property title record or a loan agreement.
- Certificates of origin or authenticity.
ERC-1155
- A portfolio of buildings, each its own token class — see our real estate case study.
- Energy units minted per watt-hour — see our electricity case study.
- Carbon credits by vintage and project.
Decision questions
- Are units interchangeable? Yes → ERC-20 or ERC-1155. No → ERC-721 or ERC-1155.
- How many distinct assets? One → ERC-20/721. Many with shared rules → ERC-1155.
- Do you need DeFi composability? Strongly → ERC-20 (or ERC-4626 vault shares).
- Is it a regulated security? Add ERC-3643 or ERC-7943.
- Will items need fractional ownership? ERC-1155 (supply > 1) or an ERC-721 + ERC-20 structure.
Hybrid designs we use
- Title NFT + fractional shares: ERC-721 represents the asset record; ERC-3643 shares represent investor economics.
- ERC-1155 portfolio with compliance hooks: one contract, one ID per asset, transfer checks enforced in the update hook.
- ERC-20 settlement coin + ERC-1155 assets: the coin pays for and distributes income on asset tokens.
Gas and operations: a practical view
Exact gas costs vary by implementation and chain, but the operational pattern is consistent:
| Operation | ERC-20 | ERC-721 | ERC-1155 |
|---|---|---|---|
| Deploy one new asset | New contract | New contract or new token ID | New token ID in existing contract |
| Send 5 different assets to one investor | 5 transactions (5 contracts) | 5 transfers | 1 batch transfer |
| Check portfolio balances | Many calls | Many calls / indexer | balanceOfBatch |
| Mint 10,000 identical units | One call | 10,000 tokens (impractical) | One call per ID |
| Distribute income across 20 assets | 20 distributions | Per-NFT | Per-ID with one claim |
For portfolios, ERC-1155’s savings compound quickly; for a single liquid instrument, ERC-20’s simplicity and ecosystem win.
Developer experience and ecosystem
- ERC-20: every wallet, exchange, custodian and DeFi protocol supports it; accounting systems understand it.
- ERC-721: universal NFT marketplace support; well-understood ownership semantics.
- ERC-1155: strong wallet and marketplace support; custodial and DeFi support is narrower — verify with partners.
A note on compliance layers
All three can be made compliant:
- ERC-20 → ERC-3643, ERC-1404 or ERC-7943 (fungible).
- ERC-721 → ERC-7943 (non-fungible) or custom hooks.
- ERC-1155 → ERC-7943 (multi-token), ERC-7518 or custom hooks.
Frequently asked questions
For one asset, ERC-20 transfers are cheapest. For moving many asset types together, ERC-1155 batch transfers are more efficient.
Technically it can represent both, but ERC-20 has deeper DeFi support and ERC-721 broader NFT tooling, so specialist standards are often still preferred.
ERC-1155 for portfolios, ERC-3643 for regulated SPV shares, and ERC-721 for title records. See our real estate guide.
The interfaces are mature; security depends on implementation quality, audits and key management.
For a single fungible token, ERC-20. For collectibles or unique items, ERC-721. For games or multi-asset platforms, ERC-1155.
Yes, through migration contracts, but it disrupts holders and integrations — choose carefully up front.
NUVZ is the RWA and Web3 engineering brand of ESS ENN Associates (est. 1993). Our team has designed and shipped tokenization platforms for real estate, education loans, solar PPAs, energy, carbon credits, bank deposits and trade documents. About us · Case studies
This article is for general information only and is not legal, tax or investment advice. Token standards evolve — always confirm the current status of an ERC at eips.ethereum.org and take advice from qualified counsel in each jurisdiction before issuing tokens.
