Glossary: ERC-20
ERC-20 is Ethereum’s standard interface for fungible tokens. It defines common functions for balances, transfers, and approvals; it does not guarantee a token’s value or safety.
What is ERC20?
ERC-20 is an Ethereum standard for fungible tokens. It defines common functions and events for balances, transfers, and approvals, making tokens easier for wallets and apps to support; the standard does not guarantee value, security, or honest behavior.
ERC-20 Explained
ERC-20 is a rulebook for making tokens on Ethereum.
These tokens are like regular coins or dollars. One token is the same as another token from the same project.
For example, one USDC token is meant to work like any other USDC token, just like one $1 bill has the same value as another $1 bill.
Because ERC-20 tokens follow the same rules, wallets, exchanges, and apps can support many different tokens more easily.
What ERC-20 Means For
Audience | Use Case |
|---|---|
Token issuers and protocols | Create fungible tokens for governance, payments, rewards, or utility within an ecosystem. |
Developers | Build apps, wallets, exchanges, or smart contracts that can interact with standard Ethereum tokens. |
Crypto users and investors | Understand how common Ethereum-based tokens work, move, and trade across wallets and apps. |
Examples
A stablecoin project issues USDC as an ERC-20 token so users can send, receive, and trade it across Ethereum apps.
A DeFi protocol creates an ERC-20 governance token that lets holders vote on protocol decisions.
A crypto app rewards users with an ERC-20 token for completing actions such as staking, referring friends, or providing liquidity.
A decentralized exchange supports ERC-20 tokens because they follow a shared standard for balances, transfers, and approvals.
Related reading
Explore Tokens, Token Balances, Stablecoins, and Application Binary Interface (ABI).
FAQs
What does ERC-20 mean?
ERC-20 is an Ethereum standard for creating fungible tokens.
Is ERC-20 the same as Ethereum?
No. Ethereum is the blockchain. ERC-20 is a token standard used on Ethereum.
How is ERC-20 different from ERC-721?
ERC-20 tokens are interchangeable. ERC-721 tokens are unique and used for NFTs.
What are ERC-20 tokens used for?
They are used for stablecoins, governance tokens, rewards, payments, and DeFi assets.
Can ERC-20 tokens be traded?
Yes. ERC-20 tokens can be transferred, traded, and used across compatible Ethereum apps.
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