HTS token vs ERC-20 on Hedera

(1) What is the difference between HTS and ERC-20 on Hedera?

HTS tokens are the most prominent tokens on the Hedera network, as they are the native assets. The Hedera Token Service API enables you to configure, mint, and manage native fungible and non-fungible tokens on the Hedera network, with programmability using Hedera Smart Contracts.

ERC-20 tokens on Hedera are a novelty. Ever since the JSON-PRC relay was released, the Hedera network has been EVM-compatible. This means that projects on EVM-compatible chains can use their code with minimal changes and deploy it on Hedera. This also means that projects can deploy tokens on Hedera that use the ERC-20 standard. These tokens are deployed on Hedera and live on Hedera!

Let us have a closer look at the similarities & differences between HTS and ERC-20 tokens on Hedera:

Interface:
The HTS tokens mimic the user experience and functionality of the ERC-20 token interface (details are explained in HIP-218). They can be accessed both through the normal Hedera Token Service API and the Smart Contract Service through the use of precompiling contracts (HIP-206 and HIP-514), where ERC-20 tokens are native to the EVM (Hedera Smart Contract Service).

Gas Cost:
The creation of HTS tokens is generally more expensive than the creation of ERC-20s. Due to recent updates to the Hedera Fee schedule, however, transfers and other interactions with HTS tokens are now cheaper compared to ERC-20s.

Interaction Required prior to holding the asset?
Another difference is that the HTS tokens require some form of user interaction prior to receiving the tokens, such as “association”, while ERC-20 tokens do not.

Programmable:
When it comes to programmability, HTS tokens are limited. They support a set of functions exposed by the HTS precompile and if dApps build functionality, they need to manipulate the HTS assets through separate contracts. ERC-20s are fully programmable, meaning that they can have logic other than being a fungible token (example for this are the LP tokens — they are fungible tokens representing user positions and the AMM logic for swapping assets at the same time).

Ecosystem Support:
Lastly, HTS tokens have strong ecosystem support (wallets/explorers, etc) compared to the extremely limited support of ERC-20s. As HeliSwap is a new DEX on Hedera, this support is crucial in driving volumes to the platform and to facilitate a broad adoption. But as mentioned before, HeliSwap also supports the ERC-20s on Hedera — the following will explain how and when we use each:

(2) HeliSwap and how we leverage HTS and ERC-20 on Hedera:

HeliSwap gets to enjoy the best of both worlds. It uses both HTS and ERC-20s, finding the balance and correct use case for both of them.

$HELI:
The $HELI token will be deployed on the Hedera ecosystem using the previously explained HTS (Hedera Token Service). This makes the token native to the Hedera network and allows us to leverage some of the advantages mentioned above. The token will serve as the governance token behind the DAO module of HeliSwap, for community incentives, liquidity provision, and staking. The superior ecosystem support for HTS tokens within the Hedera network makes the choice of using HTS for HELI the more sensible design.

For more information on $HELI, check out the tokenomics and join our Telegram and Discord to be with us right when it launches.

HeliSwap LP Tokens:
When you provide liquidity on the HeliSwap platform, you are rewarded with LP tokens that you can then stake in rewarding yield farming campaigns. Those LP Tokens are ERC-20s issued on the Hedera network and exist within the Hedera Smart Contract service. Since ERC-20s are fully programmable, there is no need to modify the already battle-tested implementation of Uniswap. Using HTS for LP tokens would require the rewriting of the core logic of the AMM — a cumbersome process.

Note: When engaging with the platform, you may not see the LP tokens listed in your wallet yet, since they are ERC-20s and we are working on the integration. To see them, navigate to Pools>My Positions

In case you have questions feel free to join our TG or Discord and ask the admins or moderators directly.

• Telegram: https://t.me/heliswap
• Twitter: https://twitter.com/HeliSwap_DEX
• Discord: discord.gg/wVrkMwBKsm
• Email: contact@heliswap.io

About HeliSwap

HeliSwap is bringing DeFi to Hedera by launching its first DEX and DAO to unlock the power of Ethereum in the ecosystem, supporting swaps between HTS, ERC20s and HBAR in a cost-effective and permissionless way.

HTS token vs ERC-20 on Hedera
The following article will explain what ERC-20 on Hedera is, how it compares to HTS tokens and why HeliSwap uses HTS for $HELI.

Defi, Hedera, DEX, Yield Farming, Cryptocurrency, ERC-20, HTS tokens

https://medium.com/@heliswap/hts-token-vs-erc-20-on-hedera-de5e629d7e2c

‍