What is ERC20 Token?

1. What is ERC-20?

ERC-20 is a technical standard used for smart contracts on the Ethereum blockchain for issuing tokens. In which, “ERC” stands for Ethereum Request For Comments – an official protocol for proposing improvements to the Ethereum network and “20” is the unique ID number to distinguish this standard from others.

The majority of tokens issued on the Ethereum blockchain are ERC-20 compliant. As of August 25, 2019, a total of 208,165 ERC-20 compatible tokens are found on Ethereum main network.

2. History

ERC-20 was proposed on November 19, 2015, by Fabian Vogelsteller. It defines a common list of rules that an Ethereum token has to implement, giving developers the ability to program how new tokens will function within the Ethereum ecosystem.

The ERC-20 token standard became popular with crowdfunding companies working on initial coin offering (ICO) cases due to the simplicity of deployment, together with its potential for interoperability with other Ethereum token standards.

3. Standards of a Token ERC-20

The Ethereum community created these standards with 03 optional rules, and 06 mandatory.

Optional

  • Token Name
  • Symbol
  • Decimal

Mandatory

  • totalSupply
  • balanceOf
  • transfer
  • transferFrom
  • approve
  • allowance

4. Features and Benefits of ERC-20 tokens

Some of their primary features includes,

  • Atomic swap feature
  • Minimum of cost and time
  • Solidity nature
  • Compatibility
  • Smart contract development etc

Benefits of ERC20 tokens includes,

  • Enhances token liquidity
  • Reduced risk of contract breaking
  • Reduces the complexity of token interaction
  • Uniform and fast transaction
  • Confirms the transaction more efficiently.

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