ERC-20 is a standard protocol for creating tokens on the Ethereum blockchain, enabling seamless interaction with other Ethereum-based projects.
ERC-20 is a technical standard protocol that defines a set of rules and requirements for creating and managing tokens on the Ethereum blockchain. These tokens are typically used as cryptocurrencies or as digital representations of assets such as gold or real estate.
ERC-20 is the most widely adopted token standard on the Ethereum blockchain, making it the de facto standard for creating new tokens. The protocol specifies six mandatory functions that every ERC-20 token must implement, including functions for transferring tokens, checking account balances, and approving other accounts to spend tokens on behalf of the account holder.
Because ERC-20 tokens are based on the Ethereum blockchain, they can be seamlessly exchanged with other Ethereum-based tokens and projects, such as decentralized exchanges (DEXs) and smart contracts. This interoperability makes it easy for developers to build decentralized applications (dApps) and for users to interact with them using different tokens.
To create an ERC-20 token, developers must write and deploy a smart contract on the Ethereum blockchain that implements the required functions of the ERC-20 standard. Once deployed, the token can be traded on decentralized exchanges, used as a means of payment, or held as a store of value.