ERC-7660 is a blockchain protocol designed to meet the need for a more advanced token management tool in decentralized applications. Its design allows it to enhance ERC20 tokens by automating their linear release through predefined periods via smart contracts. It consists of major features such as token locking, fee collection, low-cost transactions, and lastly, a sorter algorithm.

The primary goal of ERC-7660 is to launch and distribute meme coins more securely, efficiently, and transparently. It is an upgrade on the ERC-20 standard by introducing a consensus period, which enables the linear timed release of tokens over a preset period placed by the issuer. This differs from the ERC20 standard, which instantly deposits tokens for the user.

The ERC-7660 standard sends the tokens within the selected consensus period. For example, if you purchase 1000 tokens with a consensus period of ten days, you will get 100 tokens every day for the next ten days. This adds stability to memecoins, ensuring better control over price volatility and stability.

The Ethereum Foundation backs up the standard and also supports controlled distribution for memecoins like $DICK, giving it greater reach in the crypto ecosystem.

Where Did ERC-7660 Come From?

Meme coins have surged in popularity, promising an equal playing field and quick wealth to users. However, their volatility, driven by the attention economy, often leads to a shorter lifespan for these tokens. Despite this, developers continue to launch new versions, rapidly increasing the number of coins. This proliferation led to the creation of ERC-7660, designed to standardize tokens and mitigate the swift devaluation of meme coins.

The standard was initially proposed in 2022 and formally adopted in 2023. Currently, it has passed the Ethereum Foundation’s pre-examination stage but has not been fully approved and finalized as a token standard.

ERC-7660 was developed by Benchmark Labs, incorporating consensus periods to enrich the ERC repository.

How Does ERC-7660 Work?

ERC-7660 automates the release of tokens over a set period through the use of smart contracts, ensuring token distribution is spread linearly. To ensure that this task is carried out efficiently, the standard applies two major algorithms:

Sorter Algorithm

This Sorter Algorithm improves transaction efficiency by efficiently sorting out the method in which transactions are ordered and handled. By doing so, the algorithm can ensure the swift processing and execution of transactions initiated by the user. The Sorter Algorithm is also in charge of automating token transfers like claim releases and updating vesting information, leading to an efficient transaction execution process.

Low-cost Swap Algorithm

The Low-Cost Swap Algorithm uses a cost-efficient mechanism for token swap that helps reduce transaction fees. It achieves this by greatly reducing the computational resources needed to execute a transaction, which reduces the cost of the initiated transaction. Additionally, the algorithm is in charge of automatically updating token balances during swaps, further cutting down the use of additional computational resources and transaction fees.

Features of ERC-7660

The ERC-7660 protocol is equipped with special features to ensure the smooth execution of its functions. Some of these features include:

Consensus Period

The consensus period is when meme tokens are gradually released to a specific addressing order to create a stable community consensus for Memecoins.

Linear Release Functionality

ERC-7660 uses a linear release structure that automatically releases tokens at predefined intervals, ensuring a steady and consistent unlocking process without human input.

Lock-up Functionality

The protocol also enhances token security through the token locking function, which allows users to lock their tokens for a specified period, preventing arbitrary transfers of tokens. This feature also maintains token stability and integrity during difficult periods by keeping the locked tokens safe until the said period has passed.

Benchmark Labs

The creators of the ERC-7660 proposal ensure the standard stays up to date by enhancing the Sorter and Low-transaction algorithms. These improvements help boost other infrastructures, such as the Benchmark app and cross-chain bridges.

ERC-7660 Ecosystem

At the heart of the ERC-7660 is $BENCH, the protocol’s core experimental token. Issued by benchmark labs, it serves as a payment token in the fair launch and as an underlying asset in PreDex through the use of Bonding Curve pricing.

The protocol also has been used to develop other meme coins like $DICK, a meme coin that had a 5-day consensus period, $BABO, a baboon-themed memecoin that had a 5-day consensus period for distribution, with 50% going for a fair launch, 35% for liquidity, and 15% for airdrop.

Through the use of ERC-7660, Benchmark Labs has also created the Benchmark Pass NFT, which provides two different services (platinum and gold) with different benefits, such as the ability to swap Benchmark Pass for $BENCH whenever the user chooses and access to total Benchmark services like being first in line in future token releases and a 5% token airdrop from current Benchmark fair launch projects.

Use Cases of ERC-7660

ERC-7660 currently has various use cases, and by being backed up by the Ethereum Foundation, it can be implemented with other protocols to give birth to new ideas. Some of its use cases currently include:

Predefined Periods Controlled by Smart Contracts

Through ERC-7660, token release can be automated and released at certain intervals, eradicating the need for manual operation. It achieves this through smart contracts that control the linear release and lock-up function of tokens for specific periods, restricting transfers and enhancing security.

Infrastructure Support

Benchmark Labs supports ERC-7660 with features like a dashboard, launch pads for releasing new projects, and an automated deployment system.

Community Building

With the ERC-7660 protocol, developers can build communities around their created tokens instead of developing new meme coins in hopes of penetrating the market. Fair Launch, supported by Benchmark Pass, allows everyone to participate freely in building the ERC-7660 protocol. With this, developers can offer airdrops and rewards for referrals and tasks, which attracts token holders together.

ERC-7660 vs ERC-721

NFTs (non-fungible tokens) are digital assets built with blockchain technology that prove ownership of unique items such as paintings, music, and collectibles. Memecoins are crypto tokens inspired by internet memes that have attracted significant attention and amassed several followers. The worth of the coin is usually driven by the buzz created by social media platforms and the support from the community.

ERC-721 is a standard used to represent non-fungible tokens (NFTs) on the Ethereum blockchain, while ERC-7660 focuses on automating the linear release of tokens through token distribution and setting special conditions for the release of said tokens.

ERC-721 lays down rules and regulations that a smart contract must follow to manage NFTs. This leads to the creation, transfer, and validation of ownership. Meanwhile, ERC-7660 ensures the stability and life span of meme coins.

ERC-7660 vs ERC-5169

Although they are often confused with one another, smart tokens are very different from memcoins. Smart tokens are embedded with executable programming logic, making each token a mini Dapp of its own. ERC-5169 allows tokens to carry their logic and behavior, transforming them from static digital assets to dynamic entities. It was created to embed executable scripts into tokens, making these tokens capable of executing complex actions only possible through smart contracts.

Meanwhile, the ERC-7660 emphasizes the control of tokens within the Ethereum ecosystem, enabling the management and control of token distribution consistently rather than at once.

Conclusion

ERC-7660 plays a big role in the security, efficiency, and transparency of the distribution of memecoins. Although not fully approved, it has features that help reduce rug pulls and scams under the guise of airdrops of memecoins.