TIP-20 Tokens

Tempo's native stablecoin token standard

Tempo extends the ERC-20 standard used on EVM chains (Ethereum, Base, Arbitrum) with additional features, and enshrines them in protocol as the TIP-20 contract suite. These features are purpose-built for payment use cases at scale.

Predictable Payment Throughput

Tempo has dedicated payment lanes: reserved blockspace for payment transactions (specifically, TIP-20 token transfers) that other applications cannot consume. Payments have guaranteed blockspace reserved at the protocol level and don't compete with other traffic like NFT mints, liquidations, or high-frequency contract calls.

Even if there are extremely popular applications on the chain competing for blockspace, payroll runs or customer disbursements execute predictably. Fees stay low and stable even when other network activity spikes, with a target of one-tenth of a cent per payment transaction. For payment processors, that means no "downtime" from congestion, and predictable economics for high-volume flows.

There is no "noisy neighbor problem" like on traditional blockchains, where blockspace can fill up or cost orders of magnitude more during times of intense activity.

Low, Predictable Fees, in Stables

Transaction fees can be paid directly in USD-denominated stablecoins. This removes the need for volatile gas tokens and lets payment applications operate entirely in the same currency as their underlying flows, ensuring predictable costs and simpler accounting.

For wallets and custodians, this removes the need to hold a balance of new cryptoassets just to facilitate stablecoin payments. Users can pay fees in any USD stablecoin, and validators can receive fees in any USD stablecoin, with the protocol automatically converting between them using onchain liquidity through Tempo's built-in DEX.

Costs are predictable and low: TIP-20 transfers target one-tenth of a cent per transaction. This removes a major barrier for mainstream adoption. Users can interact with Tempo using only the stablecoins they're already familiar with, without needing to understand or manage volatile crypto assets.

For how applications sponsor fees and batch payments, see Tempo Transactions.

Native Reconciliation

Tempo's TIP-20 tokens can natively attach a short memo directly to each transfer. This mirrors traditional payment systems, where every transaction carries context (e.g., an invoice number, a customer ID, a cost center, or a simple reference note) for backend systems to automatically match payments to internal records.

For larger memos, Tempo supports flexible approaches where only a commitment (like a hash or locator) travels onchain while the full data (including PII) lives off-chain. This means finance teams can automatically match payments to invoices and payment processors can embed the structured data their systems need without custom solutions or integration with third-party reconciliation infrastructure.

See stablecoin reconciliation in practice: Global payouts and Tokenized deposits.

Built-in Compliance

Stablecoin (and other regulated asset) issuers operate under regulatory requirements. They need to enforce whitelists (only approved addresses can transact) or blacklists (sanctioned addresses cannot transact).

Tempo provides a shared compliance infrastructure through the TIP-403 Policy Registry. An issuer can thus create a single policy with their compliance rules, and multiple tokens they issue can adopt that policy. When the compliance manager updates the policy, all tokens using it automatically enforce the new rules, unlike traditional blockchains where an issuer must update each contract one-by-one.

Built-in Stable Asset DEX

Tempo includes a native decentralized exchange optimized for stablecoins and tokenized deposits. This means users can pay fees in any USD stablecoin, and validators can receive fees in any USD stablecoin, with the protocol automatically converting between them using onchain liquidity.

When TIP-20 matters

Use TIP-20 when you need:

Predictable throughput for large payment runs without congestion-driven fee spikes.
Stable-denominated fees for simpler unit economics.
Reconciliation metadata to tie onchain transfers to invoices and ERP records.
Shared compliance enforcement across multiple regulated assets.

For basic token functionality without these requirements, standard ERC-20 contracts work on Tempo as they do on any EVM chain.

Use Cases for Custom Stablecoins

Beyond peer-to-peer payments, custom stablecoins built on TIP-20 can be designed for specific treasury, settlement, and foreign exchange use cases:

Corporate Treasury Management

Custom stablecoins can streamline global treasury operations, allowing funds to move instantly between subsidiaries. TIP-20's reward distribution enables reserve income to be shared across business units without complex off-chain accounting.

Cross-border Payments

Stablecoins allow smaller banks and payment providers to participate in cross-border flows without correspondent banking networks. TIP-20's native transfer memos enable reconciliation between stablecoin transactions and existing payment engines that support SWIFT messaging.

Wholesale Settlement and Deposit Tokens

Policy registries enable permissioned stablecoins and deposit tokens for bank-to-bank settlement. Issuers can enforce transfer rules directly at the token level, supporting regulated and wholesale payment systems.

Interest-bearing Stablecoins

TIP-20 simplifies interest-bearing stablecoin issuance with native yield distribution. Issuers can programmatically share yield with users and intermediaries in real time, eliminating manual calculations and off-chain reconciliation.

Non-USD Stablecoins and Onchain FX

A global stablecoin ecosystem requires currencies beyond USD. TIP-20 tokens include an optional currency identifier specifying the fiat currency they represent. Tempo's native DEX will enable onchain foreign exchange between stablecoins.

FAQs

Is TIP-20 compatible with ERC-20 tooling?

TIP-20 extends ERC-20 semantics for payment-scale features while remaining familiar to EVM developers. Most indexers and wallet patterns still apply, but advanced features (memos, policy registry) require TIP-20-aware integrations.

How big can a reconciliation memo be?

TIP-20 supports short onchain memos for common references (invoice ID, customer ID). For larger data, store details offchain and put only a commitment or locator onchain to avoid leaking PII.

How should issuers handle compliance updates?

Use the TIP-403 Policy Registry so multiple tokens can share a policy and inherit updates automatically, rather than updating each token contract individually.