What are ERC-20 Tokens?
ERC-20 tokens are a standard type of token built on the Ethereum blockchain. The term 'ERC' stands for "Ethereum Request for Comments," and '20' is the unique identifier for this proposal. Introduced in 2015, the ERC-20 standard outlines a set of rules and functions that developers must follow to create their own tokens.
These tokens are fungible, meaning each token is interchangeable with another token of the same type, making them suitable for applications like digital currencies, utility tokens, and even digital assets. When a token adheres to the ERC-20 standard, it can easily be exchanged and interacted with various decentralized applications (dApps) and wallets within the Ethereum ecosystem.
Some common functions defined in the ERC-20 standard include transfer, balanceOf, and approve. By utilizing these functions, developers can manage token transfers, inquire about balances, and set allowances for spending tokens on behalf of another user.
Examples of popular ERC-20 tokens include USDT (Tether), LINK (Chainlink), and BAT (Basic Attention Token). The flexibility and efficiency of ERC-20 tokens have made them a vital part of the growing cryptocurrency landscape and the DeFi (Decentralized Finance) movement.