ETH

New Standard Token for Ethereum? ERC-4626 Primed to Innovate DeFi

by Anirudh Tiwari

January 11, 2022

chain

The new token standard is a sign that the DeFi ecosystem is continuously innovating and looking to solve problems on blockchains.

Yield Bearing Tokens Could Be DeFi’s Future

There has been a brand new proposal for the token standard, known as ERC-4626, which is spreading optimism in the Decentralized Finance (DeFi) market.

Ethereum Request for Comment (ERC)- 4626 is a token standard that has been introduced by the co-founder of Fei protocol, Joey Santoro, via a Twitter post on January 4. Yield-bearing vaults on the Ethereum network. It is an interface for Santoro has mentioned that this new token standard will:

  • Save time for developers
  • Allows for rapid innovation
  • Provide safety and assurance for the token’s users
  • Enables flexible integrations
“ERC4626 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,” explained Santoro in a tweet.
Source: Fei Protocol Website
“DeFi is all about composability, wrap/unwrap, deposit/withdraw, or whatever you want to call it,” added Santoro in a statement to The Defiant's Owen Fernau on January 6. “Things are being plugged into each other in many different ways. ERC-4626 is a unified plug for connecting tokens to services through these vaults.”

Santoro has added that the TRIBE will use ERC-4626 extensively. TRIBE is the native token of the Fei Protocol. The proposal has received several positive responses on Twitter from users that have praised Santoro for his “high-level thinking” and how this would push the DeFi community forward.


What is Fei Protocol?

Fei is a decentralized, scalable, stablecoin protocol based on the Ethereum network. As per the protocol’s whitepaper, the protocol’s main aim is to maintain a liquid market for ETH/FEI to trade closely to the ETH/USD trading pair. It achieves this using a stability mechanism called direct incentives like dynamic mint rewards and burn penalties on the DEX trade volume in order to maintain the peg.

Find more about Fei Protocol here:

Website | Twitter | Telegram | Discord | Medium | Github | Documentation | Whitepaper

Don’t forget to download the BSC News mobile application on iOS and Android to keep up with all the latest news for Binance Smart Chain and crypto! Check out the DeFi Direct Linktree for all the access links!

Author

Anirudh Tiwari

Anirudh is a cryptocurrency analyst and writer who specializes in derivatives, DeFi, regulations and CBDCs. He has a Master’s degree in Finance. Before delving into crypto, he worked with a leading U.S. based investment bank. Apart from work, he is a music connoisseur and likes to play the drums. His largest holdings in crypto are Ethereum, Cardano, and Polkadot.

;