An ERC-20 token is a standard for creating and issuing smart contract-based tokens on the Ethereum blockchain. ERC stands for Ethereum Request for Comments, and 20 is the unique proposal ID that defines this standard.
Key Features of ERC-20 Tokens
ERC-20 tokens follow a set of rules that ensure compatibility across the Ethereum ecosystem, including wallets, exchanges, and dApps.
Core Functions of ERC-20
The ERC-20 standard outlines six mandatory functions and three optional ones:
Mandatory Functions
totalSupply()- Returns the total supply of tokens.
balanceOf(address _owner)- Returns the token balance of a given address.
transfer(address _to, uint256 _value)- Transfers tokens from the sender’s account to another account.
approve(address _spender, uint256 _value)- Allows a specified address to spend a certain number of tokens on the sender’s behalf.
allowance(address _owner, address _spender)- Checks how many tokens an approved spender can withdraw.
transferFrom(address _from, address _to, uint256 _value)- Transfers tokens from one account to another (used in combination with
approve).
- Transfers tokens from one account to another (used in combination with
Optional Functions
name()— Token’s name (e.g., USD Coin).symbol()— Token’s symbol (e.g., USDC).decimals()— Number of decimal places the token supports (common value is 18).
Why ERC-20 Matters
- Interoperability: Since all ERC-20 tokens follow the same rules, they can easily interact with various platforms and wallets.
- Efficiency: Developers can launch tokens quickly without reinventing core functions.
- Security: The standard includes safeguards like
approve()to prevent unintended token loss.
Popular ERC-20 Tokens
- USDT (Tether)
- USDC (USD Coin)
- LINK (Chainlink)
- UNI (Uniswap)
Example Use Case
If you were to create a token called WHEELS for your car themed web store, ERC-20 would provide a reliable framework for issuing and managing it.