ERC-20
What Is ERC-20
ERC-20 is a widely recognized technical standard for creating and managing tokens on the Ethereum blockchain. Short for "Ethereum Request for Comment 20," it was introduced in 2015 by Fabian Vogelsteller. This standard defines a common set of rules that Ethereum-based tokens must adhere to, facilitating seamless interaction with wallets, exchanges, and decentralized applications (dApps). As the most widely adopted token standard in the cryptocurrency space, ERC-20 has played a pivotal role in shaping the Ethereum ecosystem and has significantly contributed to the broader development of blockchain technology.
The ERC-20 standard specifies six mandatory functions that all compliant tokens must implement. These functions allow users to check balances, transfer tokens between accounts, and authorize third parties to manage tokens on their behalf. By enforcing these fundamental rules, the standard ensures compatibility across the Ethereum network, which has been critical to the growth of decentralized finance (DeFi) and other blockchain innovations.
One of the key advantages of ERC-20 is that it simplifies the token creation process. Before this standard, developers had to write custom code for each new token, a task that was both time-consuming and error-prone. ERC-20 streamlines this process by providing a predefined template, reducing complexity and minimizing risks. This simplicity has led to the creation of thousands of ERC-20 tokens, representing a variety of assets, projects, and utilities, and driving the rapid expansion of the Ethereum ecosystem.