ERC-223
In short: ERC-223 is an Ethereum token standard, backed by smart contracts, that was proposed to let users transfer tokens securely to wallets and other addresses.
ERC-223 is an Ethereum token standard, backed by smart contracts, that was proposed to let users transfer tokens securely to wallets and other addresses. Its main goal is to stop tokens from being lost when they are sent to a contract that cannot handle them.
Why it matters
With the widely used ERC-20 standard, a plain transfer to a smart contract does not notify that contract. If the contract was not built to accept tokens, the tokens can end up stuck there for good. ERC-223 changes this. When tokens are sent to a contract, the token contract calls a special receiving function on the destination. If that function is missing, the transfer fails and the tokens stay with the sender. Transfers to ordinary wallet addresses work just like normal transfers. ERC-223 also lets a user pay a contract in one step instead of the two-step approve-and-transfer flow. Even so, ERC-20 remains far more common, so most tokens you meet in wallets and on exchanges do not use ERC-223.
Example
A user accidentally sends tokens to the address of a contract that has nothing to do with tokens. With a basic ERC-20 token, the transfer succeeds and the tokens are effectively lost. With an ERC-223 token, the contract has no receiving function, so the transaction is rejected. The user keeps the tokens and loses only the network fee.