ERC20 (Ethereum Request for Comment 20) is the foundational token standard for creating fungible tokens on the Ethereum blockchain. Proposed in 2015 by Fabian Vogelsteller, ERC20 established a common set of rules that all Ethereum-based tokens must follow, enabling seamless compatibility between tokens, wallets, and decentralized applications.
How ERC20 Works
An ERC20 token is a smart contract deployed on Ethereum that implements six mandatory functions: totalSupply, balanceOf, transfer, transferFrom, approve, and allowance. These functions create a universal language that wallets and exchanges can use to interact with any ERC20 token without custom integration work.
ERC20 Address Format
All Ethereum addresses, including those used for ERC20 tokens, begin with "0x" followed by 40 hexadecimal characters (for example: 0xbd7e3…). Never send ERC20 tokens to a TRC20 address starting with "T" — the funds will be unrecoverable.
Major ERC20 Tokens
USDT ERC20: Tether's most established version, widely accepted across DeFi and exchanges.
USDC: USD Coin, a major competing stablecoin running on ERC20.
DAI: MakerDAO's decentralized stablecoin, ERC20-based.
UNI, AAVE, LINK: Major DeFi governance and utility tokens, all ERC20 standard.
Why ERC20 Became the Dominant Standard
Ethereum's first-mover advantage in smart contracts, combined with ERC20's elegant simplicity, created a self-reinforcing ecosystem. Thousands of tokens, hundreds of DeFi protocols, and virtually every major crypto exchange support ERC20 natively. This network effect makes ERC20 the de facto global standard for tokenized assets.
Kevin Martin
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Jessica Brown
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