ERC-20 vs eERC
Comparing traditional ERC-20 tokens with eERC in the Avalanche ecosystem.
In the previous section, we learned what kind of privacy eERC offers on Avalanche.
Now, let’s compare it directly to ERC-20, the most widely used fungible token standard in the EVM ecosystem.
Key Differences
| Feature | ERC-20 | eERC (Encrypted ERC) |
|---|---|---|
| Balance Visibility | Public: anyone can see wallet balances on-chain. | Private: balances are encrypted, visible only to the holder and authorized auditors. |
| Transaction Amount Visibility | Public: amounts are visible in every transfer. | Private: transfer amounts are encrypted and hidden from the public. |
| Privacy Technology | None: all data is transparent. | Zero-knowledge proofs (zk-SNARKs) + homomorphic encryption. |
| Compliance Options | Requires custom solutions for compliance and auditability. | Built-in Auditability Module allows selective decryption for authorized auditors. |
| Blockchain Compatibility | Works on any EVM-compatible chain. | Works on any EVM-compatible chain, including Avalanche C-Chain Mainnet, Fuji (Testnet), and custom L1s. |
| Gas Efficiency | Very efficient for transfers and approvals. | Slightly higher cost due to encryption and proof verification, but optimized for Avalanche’s low fees. |
| Modes Available | Single implementation. | Standalone Mode and Converter Mode for different privacy needs. |
| Total Supply Visibility | Public by default. | Concealed in Standalone Mode (optional in Converter Mode). |
| Use Cases | Public tokens, open DeFi, governance tokens. | Confidential DeFi, enterprise payments, private RWA, regulated financial use. |
Summary
While ERC-20 remains the foundation for most tokens in the EVM ecosystem, it offers no privacy features.
eERC, on the other hand, is designed for scenarios where confidentiality, compliance, and selective transparency are required, making it ideal for enterprise, regulated markets, and advanced DeFi protocols on Avalanche.
In the next section, we will explore the Technology Behind eERC, understanding the cryptographic tools, on-chain components, and modes of operation that make this privacy possible.
Is this guide helpful?
