ERC20

ERC-20 is a technical standard on the Ethereum blockchain for fungible tokens. It provides a common set of rules that allow different tokens to interact with wallets, exchanges, and smart contracts. The standard, officially EIP-20, was proposed in 2015 by Fabian Vogelsteller and has become the de facto standard for fungible tokens on Ethereum.

A token contract that implements ERC-20 must implement six functions: totalSupply(), balanceOf(address), transfer(address, uint256), approve(address, uint256), allowance(address, address), and transferFrom(address, address, uint256). It must also emit two events: Transfer and Approval. Tokens commonly expose optional metadata such as name, symbol, and decimals, with decimals indicating the token’s precision. These functions and events enable basic token transfers, balance checks, and delegated spending by smart contracts.

Because ERC-20 defines a predictable interface, tokens can interact with wallets, exchanges, and decentralized applications without bespoke integration. This interoperability has driven widespread token ecosystems and DeFi activity on Ethereum. ERC-20 also has known limitations, notably potential race conditions in the approve/transferFrom pattern, which has led some implementations to expose increaseAllowance and decreaseAllowance functions. Other standards, such as ERC-223 and ERC-777, have proposed improvements, but ERC-20 remains widely used and supported across tooling and platforms.

Examples of widely adopted ERC-20 tokens include DAI, USDC, BAT, and other major stablecoins and project tokens. The standard has underpinned tokenized assets, fundraising, and the broader Ethereum token economy.