ERC-20 Tokens: Everything You Need To Know
If you’ve been around the crypto world for a time, you’ve probably come across the term ERC-20 tokens.
This is a perplexing term for new traders/investors or those without a technical background or programming skills.
This article will explain what an ERC-20 token is and how it works. I’ll walk you through what the phrase implies, the benefits and drawbacks of constructing tokens on top of the ERC-20 protocol, and finally, some notable projects built on top of the ERC-20 standard.
What exactly is an ERC?
Ethereum Improvement Proposal (ERC) is an abbreviation for Ethereum Improvement Proposal. Each ERC is a set of rules and standards that define numerous things on top of the Ethereum blockchain, including:
Rules and circumstances for smart contracts
Rules for generating tokens
Conditions for buying and selling tokens
produced tokens’ name and symbol
standards for data
standards for wallets
and a lot more
However, in this article, we’re interested in learning more about a specific ERC known as ERC-20.
The ERC-20 Token Standard is the one that is linked to Tokens. It’s an “interface” that lets programmers create tokens on the Ethereum network.
ERC-20 is a Token Building Interface
It’s pretty evident what an ERC-20 token is now that we understand the concepts of ERC and interface.
ERC-20 is an Ethereum blockchain-based interface that allows developers to create unique coins. To put it another way, ERC-20 is a collection of abstract definitions for a token’s attributes and methods. Developers can develop similar characteristics and procedures later when implementing an ERC-20 token and add their unique logic set for their tokens.
Now that we know this, let’s look at the parameters and methods developers must use when creating and deploying ERC-20 tokens.
Benefits of Using the ERC-20 Interface to Create a Cryptoasset:
The following are the key benefits of declaring a coin as ERC-20:
Building a crypto asset on top of the Ethereum blockchain, therefore utilizing the Ethereum blockchain’s key characteristics.
Making minimal changes to the new code and repurposing old code and infrastructure to create a new token.
Exchanges have a better possibility of listing you.
Integration with existing wallets is more likely.
The following is a list of six well-known ERC-20 tokens.
Thousands of ERC-20 tokens are already accessible in the crypto world. Many of those tokens are either scams or untrustworthy projects. However, if you look through the list of ERC-20 tokens on sites like Bloxy, Cryptonomist, or Eidoo, you’ll see some familiar names.
#1 — Tether (USDT)
Tether, a Hong Kong-based business, has created USDT, a stablecoin (stable-value cryptocurrency) that matches the US dollar price.
#2 — SHIBA INU (SHIB)
Shiba Inu aspired to be Dogecoin’s Ethereum-based counterpart. Shiba Inu and the SHIB token are among a growing number of dog-themed cryptocurrencies.
#3 — Uniswap (UNI)
Uniswap is a well-known decentralised trading system that helps automate decentralised finance (DeFi) tokens.
#4— Chainlink (LINK)
Chainlink enables blockchains to securely communicate with external data feeds, events, and payment mechanisms, enabling complicated smart contracts to become the dominant form of digital agreement by delivering important off-chain information.
#5 — Decentraland (MANA)
Decentraland (MANA) is a virtual reality platform where users may develop, enjoy, and monetise content and apps.
#6 — A polygon (MATIC)
Polygon (formerly Matic Network) is the first well-structured, simple-to-use Ethereum scaling and infrastructure development platform.
In summary, ERC-20 is an Ethereum blockchain-based interface. Developers can use this interface to create ERC-20 tokens and then sell them on the market.
