Crypto glossary
ERC-20
ERC-20 is the technical standard for fungible tokens on Ethereum, defining common functions so wallets and exchanges can handle any token the same way.
Proposed in 2015 and formalized as EIP-20, ERC-20 lists the functions every token contract must offer, such as totalSupply, balanceOf, transfer, approve and transferFrom. Because compliant tokens share the same interface, a wallet, exchange or DeFi protocol can support a new token without custom code.
Most tokens on Ethereum follow the standard, including stablecoins like USDT and USDC, governance tokens like UNI and wrapped assets like WBTC. The same format is used on EVM-compatible networks such as Arbitrum, Base and Polygon, and on BNB Chain, where it is called BEP-20.
ERC-20 balances live inside the token's smart contract, not in your wallet: the contract keeps a ledger of who owns what. The approve function lets other contracts spend your tokens, and unlimited approvals left open are a common way funds get drained by malicious or hacked contracts.
Example
Sending 100 USDC on Ethereum calls the transfer function of the USDC contract, which subtracts 100 from your balance and adds it to the recipient's, with the fee paid in ETH.
Related terms
Latest articles on ERC-20
- Payy Launches Ethereum Privacy Layer for Private ERC-20 Transfers
- Circle Introduces New Refund Protocol for ERC-20 Payment Disputes
- Movement Blockchain Launches ERC-20 MOVE Token for Its Ecosystem
- Circle Unveils Privacy-Boosting ERC-20 Standard with Inco Network
- EigenDA Introduces ERC-20 Restaking for Layer-2 Networks: What You Need to Know
