What Is ERC20?
ERC-20 is a technical standard for tokens on the Ethereum blockchain, first proposed in 2015 by developer Fabian Vogelsteller. The acronym stands for "Ethereum Request for Comments" (ERC), with "20" as the proposal number. Unlike executable code, ERC-20 functions as a guideline, defining how tokens should behave and interact within Ethereum's ecosystem.
Why ERC-20 Matters
- Uniformity: It establishes rules for token transfers, balance queries, and third-party spending approvals, ensuring compatibility across wallets, exchanges, and dApps.
- Developer-Friendly: Before ERC-20, creating tokens required complex custom code. Now, developers can launch tokens quickly by adhering to the standard.
- ICO Boom: The 2017 Initial Coin Offering (ICO) surge relied heavily on ERC-20 tokens, enabling projects to raise funds and build communities effortlessly.
👉 Discover how ERC-20 tokens power decentralized finance
Key Features of ERC-20 Tokens
- Transferability: Tokens move seamlessly between addresses.
- Interoperability: Works with MetaMask, Uniswap, and other Ethereum-based tools.
- Standardized Functions: Includes
balanceOf,transfer, andapprovemethods.
Limitations
- Gas Fees: ERC-20 transactions can be costly during network congestion.
- Functionality: Newer standards (e.g., ERC-721 for NFTs) address its lack of advanced features.
FAQs About ERC-20
Q: Is ERC-20 only for Ethereum?
A: Yes—it’s native to Ethereum, though other blockchains have adopted similar standards.
Q: How do I store ERC-20 tokens?
A: Use Ethereum-compatible wallets like MetaMask or Trust Wallet.
Q: Can ERC-20 tokens be mined?
A: No. They’re pre-minted during token creation.
👉 Explore top ERC-20 tokens in 2024
Conclusion
ERC-20 revolutionized tokenization by simplifying development and fostering ecosystem growth. While newer standards emerge, its legacy as Ethereum’s foundational token protocol remains unmatched. For blockchain newcomers, understanding ERC-20 is a critical step toward mastering decentralized technologies.