xERC20 (aka ERC-7281) is a new token standard that fixes the security and liquidity issues that bridged tokens face today.
Bridge your token to any chain without slippage, enjoy seamless fungibility with canonical bridges, and fine-tune risk settings, all while retaining control of your token contracts.
What is xERC20?
Why do we need a standard?
Fragmented liquidity: When tokens are bridged between chains, each bridge creates its own version of the token on the destination chain. These tokens are not fungible with one another. This fragments liquidity and creates a horrible user experience.
Bad security: When bridges create their own version of a token on new chains, they deploy the token contract. Not only does the token issuer lose control of the token contract, but those tokens are also locked with that bridge forever.
Each bridge mints its own version of a token, dividing liquidity and removing control for the token issuers.
Fungible Liquidity
Through Full Ownership
With the xERC20 standard, token issuers deploy and control their own native xERC20 tokens on each chain, rather than using bridge-controlled ones. Bridges can then be given the right to mint tokens from that contract with specified rate limits.
As a result, users always receive the same "official" token when bridging, bridges no longer need liquidity, and token issuers remain in control of their token contracts.
All whitelisted bridges mint the same version of crosschain tokens, so these are fungible with each other!
How does it work?
Just like turning ETH into WETH, xERC20 uses a "Lockbox" (an immutable contract) that wraps tokens 1:1 for xERC20.
Token issuers then set minting limits for each bridge based on their trust in its security. For example, a native chain bridge might have unlimited minting, while a third-party bridge could be limited in the number of tokens they can mint daily.
Important note: users do not need to know about this wrapping, as their experience can be completely abstracted from these internal steps.
xERC20 Benefits
Crosschain Sovereignty
Token issuers maintain control on all chains, choosing trusted bridges without being permanently tied to one ecosystem or bridge.
Granular Security Control
Token issuers can gain more control over their tokens' security, mitigating risks and enhancing user trust.
Perfect Pricing
Contrary to what happens with today’s bridges, xERC20 tokens move across chains without slippage, ensuring better predictability for users.
Scalability
In a future with over 1,000 rollups and chains, tracking token versions isn't practical. xERC20 uniquely scales liquidity in this landscape.
Perfect Fungibility
xERC20 solves the fungibility problems that tokens face today. Create a single token on each chain, regardless of the bridge used.
Public Good
xERC20 is an Open Standard built by the Ethereum community - not owned nor controlled by a specific protocol.
Comparison
Why should I choose the xERC20 over other standards?