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When ERC-20 tokens are sent to a smart contract that is not designed to handle ERC-20 tokens, those tokens can be permanently lost. This happens because the receiving contract does not have the functionality to recognize or respond to the incoming tokens, and there’s no mechanism in the ERC-20 standard to notify the receiving contract about the incoming tokens. The main ways this issue takes form is through:
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1. Token transfer mechanism
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- ERC-20 tokens are transferred using the transfer or transferFrom functions
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- When a user sends tokens to a contract address using these functions, the tokens are transferred regardless of whether the receiving contract is designed to handle them
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2. Lack of notification
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- The receiving contract does not receive a notification or callback that tokens have been sent to it
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- If the receiving contract lacks a mechanism to handle tokens (e.g., a fallback function or a dedicated function to manage token reception), the tokens are effectively stuck in the contract’s address
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3. No built-in handling
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- The ERC-20 standard does not include a mandatory function for receiving contracts to implement, leading to a situation where many contracts are unable to manage incoming tokens properly
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@@ -19,10 +19,11 @@ Many Ethereum development standards focus on token interfaces. These standards h
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Here are some of the most popular token standards on Ethereum:
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-[ERC-20](/developers/docs/standards/tokens/erc-20/) - A standard interface for fungible (interchangeable) tokens, like voting tokens, staking tokens or virtual currencies.
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### NFT standards {#nft-standards}
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-[ERC-721](/developers/docs/standards/tokens/erc-721/) - A standard interface for non-fungible tokens, like a deed for artwork or a song.
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-[ERC-777](/developers/docs/standards/tokens/erc-777/) - ERC-777 allows people to build extra functionality on top of tokens such as a mixer contract for improved transaction privacy or an emergency recover function to bail you out if you lose your private keys.
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-[ERC-1155](/developers/docs/standards/tokens/erc-1155/) - ERC-1155 allows for more efficient trades and bundling of transactions – thus saving costs. This token standard allows for creating both utility tokens (such as $BNB or $BAT) and Non-Fungible Tokens like CryptoPunks.
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-[ERC-4626](/developers/docs/standards/tokens/erc-4626/) - A tokenized vault standard designed to optimize and unify the technical parameters of yield-bearing vaults.
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The full list of [ERC](https://eips.ethereum.org/erc) proposals.
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