The ERC-20 standard has seeped into almost every corner of the crypto ecosystem. A large number of popular tokens, such as EOS, TRON, VeChain, Maker, BNB, Uniswap, etc., are actually tokens those work under ERC-20 standard.

KEY features

  • ERC-20 is a standard used for creating and issuing smart contracts on the Ethereum blockchain.
  • Smart contracts can then be used to create smart property or crypto assets that people can invest in.

What Is ERC-20?

ERC-20 has emerged as the technical standard. It is used for all smart contracts on the Ethereum blockchain for token creation and implementation and provides a list of rules that all Ethereum-based tokens must follow. The ERC-20 code is opened-sourced.The main mission of developing the updated ERC standard was to simplify interactions with the ETH based wallets, exchanges and smart contracts. ERC-20 tokens are blockchain-based assets that have value and can be sent and received on the Ethereum network.

Every ERC-20 has several required features for developers that must be implemented. The main elements are:

  • totalSupply: a function that outlines the total supply of a token.
  • balanceOf: shows how many tokens a particular address has.
  • transfer: transfers ownership of a token to another user.
  • As of May 2021, there are 400,601 token contracts, according to a dynamic list from Ethereum data provider- Etherscan.
  • Fungible- each unit is interchangeable with another.
  • Flexible- they can be used as in-game currency, in referral programs, as digital collectibles, or even in order to represent pieces of fine art and property rights.
  • Popular- there is a plethora of exchanges, wallets, and smart contracts that are already compatible with newly-launched tokens.
  • Scalability- an attempt to make a transaction at peak times results in high fees and delays.
  • Scams- it takes minimal effort to create a simple ERC-20 token, that means that anyone can do it — for good purposes or for bad ones. As such, you should be careful with what you’re investing in.

ERC-20, ERC-1155, ERC-223, ERC-721 — what’s the difference?

ERC-20 is the first and the most popular Ethereum token standard.
Some of the less common standards are the ones used in non-fungible tokens (NFTs).
The ERC-721 standard, for instance, was used for the immensely popular CryptoKitties DApp. Such contract provides an API for users to mint their own non-fungible tokens and to encode metadata(images, descriptions, etc.).
The ERC-1155 standard can be considered as an improvement of both standards ERC-721 and ERC-20. It is a standard that supports both fungible and non-fungible tokens in the same contract.
Other standards such as ERC-223 or ERC-621 aim to improve usability. The former implements safeguards to prevent accidental token transfers. The latter adds extra functions for increasing and decreasing token supply.

The most convenient platform to trade, store, invest and manage your crypto assets.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store