What is ERC-20?

ERC-20 (Ethereum Request for Comments 20) is a technical standard for creating and implementing tokens on the Ethereum blockchain. Introduced in 2015, it defines a common set of rules that all Ethereum tokens must follow, ensuring compatibility with wallets, exchanges, and other services.

How ERC-20 Works

The ERC-20 standard defines six mandatory functions:

  1. totalSupply: Total token supply
  2. balanceOf: Check address balance
  3. transfer: Send tokens to address
  4. transferFrom: Send tokens on behalf of another
  5. approve: Authorize spending limit
  6. allowance: Check approved spending amount

Why ERC-20 Matters

Before ERC-20:

  • Each token had unique implementation
  • Wallets needed custom support
  • Exchange integration was difficult

After ERC-20:

  • Standardized token creation
  • Universal wallet compatibility
  • Easy exchange listing
  • Interoperability between dApps
  • USDT: Tether stablecoin
  • USDC: USD Coin
  • LINK: Chainlink
  • UNI: Uniswap governance token
  • SHIB: Shiba Inu

ERC-20 vs Other Standards

  • ERC-721: Non-fungible tokens (NFTs)
  • ERC-1155: Multi-token standard
  • BEP-20: Binance Smart Chain equivalent

Trading ERC-20 Tokens

ERC-20 tokens are widely available on:

Note: Withdrawing ERC-20 tokens requires ETH for gas fees.