What Is ERC-20?
ERC-20 refers to a token standard that is used explicitly for Fungible tokens that have an Ethereum base. It is a standard for a specific type of digital tokens that may adopt different names. It is usually for smart contract implementation and covers a set of rules that all platforms based on Ethereum should follow.
The popular cryptocurrency and blockchain system referred to as Ethereum is based on tokens, which can be bought, sold, or traded. On the Ethereum platform, ERC-20 has emerged as one of the most significant tokens and has assumed the position of the technical standard used for the vast majority of smart contracts on the Ethereum blockchain, especially for the implementation of tokens. Several popular digital currencies, including Maker (MKR), Augur (REP), OmiseGO (OMG), and Basic Attention Token (BAT), use the ERC-20 standard to run. Aside from this, ERC-20 determines a set of rules that all tokens based on the Ethereum blockchain must follow. The ERC-20 tokens are assets based on the Ethereum blockchain, and as such, they have values that can be sent and received much like other cryptocurrencies like bitcoin, Litecoin. Still, they differ in that while the others run on their blockchain, tokens on the ERC-20 platform are issued on the Ethereum network.
Individuals who intend to purchase digital currencies issued as ERC-20 tokens need to have wallets that are compatible with the token. Also, the methods by which tokens are transferred and how users can access data regarding a particular token are quite similar for each ERC-20 token. Usually, creating an ERC-20 contract requires strict adherence to a total of 9 rules, with six being mandatory and the other three being optional. The necessary standards include: ‘allowance,’ ‘approve,’ ‘transfer from, ‘transfer,’ ‘balance, and ‘total supply while the optional ones include: ‘token name,’ ‘decimal’ and ‘symbol.’ They are technical terminologies that can be looked up.
An individual who is looking to use the Ethereum blockchain can use the ERC-20 token standards, which offer high liquidity and reduce risk in smart contracts.« Back to Glossary Index