Distinctions Between Using ASA and Application for Tokens & NFTs on Algorand

I would like to explain the differences between using Algorand Standard Assets (ASA) and Algorand Smart Contracts (Applications) for Tokens and NFTs on Algorand.

Algorand Standard Assets (ASA) for Tokens/NFTs:

  • ARC-Standards:
    • Metadata & Information: Adhere to either ARC 3 or ARC 69.
    • Mutability: Follow ARC 19.
    • Burning Mechanism: Either sending it back to the creator or through an Escrow, (e.g., as described in ARC 54).
  • Limitations:
    • ASA doesn’t allow updates to unit numbers, decimals, or URLs natively. Overcome this by integrating ARC20, which mandates creating a blank ASA linked to an Application using the manager’s address.
    • Specialized transfer logic for native ASAs are limited and need to leverage Clawback/Freeze Address and the logic offered by Application (e.g., enforcing royalties, ARC18)
  • Opt-In Requirement: Users need to Opt-In to the asset for interactions. (ARC-12 might be a workaround for that)

Algorand Smart Contracts (Applications) for Tokens/NFTs:

  • Standards: Adhere to one, either ARC72 for NFT or ARC200 for Token.
  • Flexibility: Applications provide significant flexibility in terms of transfer logic, metadata, URL, everything is customizable.
  • Potential Enhancement: While the “Opt-in” feature is missing, we can consider introducing an “Allow” method. This would enable an owner to grant permission to an Application to use their address.

Conclusion: While ASAs offer a streamlined method for asset creation and management, they come with certain constraints. In contrast, Applications provide broader flexibility. Your choice should depend on the specific requirements of your project.


Sure, and you should not forget about limitations of ARC200 tokens…

  • They will be used to scam people (smart contract can take users money without him noticing it)
  • Tokens are not directly on the user’s account, so he may loose it (accounting apps must be aware of all arc200 tokens out there)
  • No wallets or apps are at the moment using it, and because the ASAs are supperior and more secure, the addoption will be quite difficult. Also most important tokens such as USDC, USDT are the ASAs, and people are already learned to opt in to the token if they want to receive it
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Layer one assets:
-Easily create through batch transactions using Python or js sdk
-Easily move through batch transactions using Python or js sdk
-Easily read through batch transactions using Python or js sdk
-Easily destroy through batch transactions using Python or js sdk
-Full transaction history for each ASA
-Transactions when buying and selling are easy to read and digest vs an application call making it almost impossible to scam people unknowingly