What is ERC-20?
ERC-20 is a technical standard used for smart contracts on the Ethereum blockchain for implementing tokens. This standard defines a common list of rules that all Ethereum tokens must adhere to, enabling seamless interaction between various tokens and the platforms that utilize them. The "ERC" stands for Ethereum Request for Comments, and "20" is the unique proposal identifier.
The main advantage of ERC-20 tokens is their interoperability, allowing developers to easily incorporate them into decentralized applications (dApps), exchanges, and wallets. By adhering to this standard, token creators benefit from a well-established framework, facilitating the growth of the cryptocurrency ecosystem.
Key functions of ERC-20 tokens include totalSupply (provides the total number of tokens), balanceOf (checks the token balance of an address), transfer (facilitates the transfer of tokens), and allowance (manages the tokens spent by a third party).
This token standard has led to a significant increase in Initial Coin Offerings (ICOs) and tokenized assets, making ERC-20 one of the most widely adopted token standards in the blockchain space.