The most common token standard today is the Ethereum Request for Comment or ERC.
In order to fully understand what a token standard actually is, you'll need to get some background knowledge on what exactly a smart contract standard is. A smart contract standard essentially describes the rules that the smart contract has to comply with in order to actually utilize the underlying blockchain network, and the standards are application-level to blockchains that are built for smart contracts as well as other decentralized applications or DApps. The smart contract standard can include token standards, name registries as well as a library or package formats, and a lot more.
By defining the standard, a smart contract has to obey the requirements in order to actually enable basic functions such as the creation of tokens or the performing of transactions.
Smart contract standards play an important role in the network due to the fact that they essentially define the rules of utilizing the blockchain network — a good standard can make the communication among different smart contracts within the same blockchain network efficient. The boom of smart contracts, as well as their interoperability, can also help the development of the entirety of the blockchain ecosystem.
Now, the token standard is the subsidiary of the smart contract standard. For the blockchain that supports the smart contracts, the token standard is often included to tell people how to create, issue as well as deploy new tokens which are based on their underlying blockchain.
Currently, the most commonly used blockchain when it comes to building smart contracts is Ethereum and it has developed different kinds of standards for supporting various smart contracts.
The most common token standard today is the Ethereum Request for Comment or ERC, and this can be ERC-20, ERC-721, ERC-777 and ERC 1155, to name a few.