ERC-20 Token
ERC-20 Token is a fungible token standard on the Ethereum blockchain. It defines rules for creating, transferring, and managing tokens uniformly.
What Is a ERC-20 Token?
A ERC-20 Token is a fungible token standard on the Ethereum blockchain. It sets uniform rules for creating, issuing, and managing tokens. Developers deploy ERC-20 tokens as smart contracts to represent assets like cryptocurrencies, stablecoins, or governance tokens.
ERC-20 works through a smart contract interface with six required functions: totalSupply(), balanceOf(address), transfer(address,uint256), transferFrom(address,address,uint256), approve(address,uint256), and allowance(address,address). Three events—Transfer, Approval, and optionally Approval—track changes. Wallets query balanceOf to show holdings. Transfers update sender and receiver balances atomically via the Ethereum Virtual Machine (EVM).
ERC-20 matters because it enables seamless interoperability. Exchanges list ERC-20 tokens easily. Wallets support them natively, reducing integration errors and enhancing security. It powers over 500,000 tokens, including USDT and DAI, driving DeFi liquidity and adoption.
Key characteristics include fungibility—all tokens equal—divisibility up to 18 decimals, and transferability to any Ethereum address. For example, 1.5 USDT equals 1.5 USDT anywhere. Extensions like ERC-20 Permit add gasless approvals for better user experience.
A token is a digital asset on a blockchain that represents value, ownership, utility, or access rights. Examples include ERC-20 tokens on Ethereum.
Read full definitionEthereum is a decentralized blockchain platform that enables smart contracts and decentralized applications (dApps). Its native cryptocurrency is Ether (ETH).
Read full definitionA DAO (Decentralized Autonomous Organization) is a blockchain-based entity governed by smart contracts and token holder votes, enabling decentralized decision-making without central authority.
Read full definitionInteroperability in blockchain refers to the ability of different blockchain networks to communicate and exchange data or value seamlessly, enabling cross-chain functionality.
Read full definitionA stablecoin is a cryptocurrency designed to maintain a stable value, typically pegged to a fiat currency like the US dollar or backed by reserves.
Read full definitionDeFi (Decentralized Finance) refers to a set of financial services, such as lending and trading, built on blockchain technology without traditional intermediaries like banks.
Read full definitionReal-World Examples
Example 1: Traders use ERC-20 tokens like USDT on exchanges. They deposit USDT to their Binance wallet. Then, they swap it for ETH via a trading pair. The transfer function handles the atomic balance update.
Example 2: In DeFi, users lend DAI on Aave. They approve the protocol via approve. Aave pulls DAI using transferFrom. Borrowers receive DAI and pay interest in the same token.
Example 3: Governance with UNI tokens. Holders check their balance with balanceOf. They delegate votes on Uniswap proposals. The Transfer event logs stake movements.
Example 4: Wallets display ERC-20 holdings. MetaMask queries totalSupply and balanceOf(your_address) for SHIB. Users send 100 SHIB to a friend, triggering a Transfer event.
A stablecoin is a cryptocurrency designed to maintain a stable value, typically pegged to a fiat currency like the US dollar or backed by reserves.
Read full definitionIn cryptocurrency, a swap is the direct exchange of one token for another on a blockchain, often via decentralized exchanges (DEXs) without intermediaries.
Read full definitionEthereum is a decentralized blockchain platform that enables smart contracts and decentralized applications (dApps). Its native cryptocurrency is Ether (ETH).
Read full definitionDeFi (Decentralized Finance) refers to a set of financial services, such as lending and trading, built on blockchain technology without traditional intermediaries like banks.
Read full definitionA lending protocol is a DeFi smart contract platform on blockchain where users lend crypto to earn interest and borrow assets using collateral.
Read full definitionA token is a digital asset on a blockchain that represents value, ownership, utility, or access rights. Examples include ERC-20 tokens on Ethereum.
Read full definitionA DAO (Decentralized Autonomous Organization) is a blockchain-based entity governed by smart contracts and token holder votes, enabling decentralized decision-making without central authority.
Read full definitionA meme coin is a cryptocurrency inspired by internet memes, driven by social media hype and community enthusiasm rather than technical utility. Examples include Dogecoin (DOGE) and Shiba Inu (SHIB).
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