🚨 Time is Running Out: Reserve Your Spot in the Lucky Draw & Claim Rewards! START NOW
Learn to gain real rewards

Learn to gain real rewards

Collect Bits, boost your Degree and gain actual rewards!

Video Courses
Video Courses
Scale your career with online video courses. Dive into your learning adventure!
Crypto Terms:  Letter E
Jun 19, 2023 |
updated Apr 02, 2024

What is ERC-223?

ERC-223 Meaning:
ERC-223 - an Ethereum-based token powered by smart contracts. It allows secure transfer of tokens into a digital wallet.
2 minutes

Let's find out ERC-223 meaning, definition in crypto, what is ERC-223, and all other detailed facts.

ERC-223 token is the expansion of the ERC-20 protocol. It was developed by an Ethereum community member known by the Reddit username “Dexaran” to fix a bug in ERC-20 tokens. ERC-223 tokens are powered by smart contracts. They allow users to transfer their tokens into digital wallets securely.

ERC-223 is one of many Ethereum-based token standards. Each standard offers different functionality and utility. Some of the most popular Ethereum tokens are ERC-20, ERC-721, and ERC-1155.

ERC-20 is the most common type of Ethereum token. It is considered to be fungible and has a lot of versatility. However, some of its design flaws can lead to tokens being lost if the users send them to a smart contract instead of an ordinary crypto wallet. According to some statistics, over $3 million ERC-20 tokens have been lost by accident.

ERC-223 was developed to fix this issue. Users can opt to transfer tokens to smart contracts and wallets that function the same way. They are more efficient and faster than ERC-20 tokens.

ERC-223 acts as an extension of the ERC-20 token as it maintains the original functionality and improves on some of the issues. This standard particularly improves transactions involving smart contracts.

One of the transfer parameters confirms that the destination of the tokens is a smart contract. It operates using a Fallback function, allowing the tokens to be returned to the sender’s account and then transferred to the smart contract. This prevents the loss of tokens as it includes smart contracts in the transaction procedure.

Some of the benefits of using ERC-223 over ERC-20 are:

  • The use of automated smart contracts allows transactions to be completed smoothly and seamlessly;
  • The transaction details remain transparent;
  • The token is decentralized, so all transactions are completed without an intermediary;
  • The wait times and gas fees of the transaction are reduced;
  • Investors are able to receive instant liquidity and high return of investment (ROI) as means of passive income;
  • Tokens can be transferred into a smart contract with just one transaction, thus avoiding blockchain bloating;
  • ERC-223 comes with multi-level security features which prevent hacking or malicious attacks. The security features include HTTP authentication, end-to-end encryption, and escrow protection;
  • Token transactions proceed similarly to Ether transactions, so there is no confusion within the Ethereum ecosystem.