Technical Concepts

ERC-20

Ethereum Request for Comment 20

Standard for creating fungible tokens on Ethereum

Definition

ERC-20 is a technical standard for fungible tokens on the Ethereum blockchain. It defines a common interface that allows tokens to be easily integrated with wallets, exchanges, and other applications.

Example

USDC, DAI, UNI, and most DeFi tokens are ERC-20 tokens that follow this standard.

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What to check

Treat it as infrastructure: understand what it automates, what trust assumptions remain, and how failures propagate. The main checks are: Smart contract bugs; Token-specific risks; Approval exploits.

Risks to Consider

  • Smart contract bugs
  • Token-specific risks
  • Approval exploits

Common Questions

Can I use ERC-20 tokens on other blockchains?

Not directly, but you can bridge them to other chains or use wrapped versions that follow other standards.

What does ERC-20 mean in DeFi?

ERC-20 means Standard for creating fungible tokens on Ethereum. The useful question is not only the definition, but how the mechanism changes risk, return, liquidity, or governance for the user.

How is ERC-20 used in practice?

A practical example: USDC, DAI, UNI, and most DeFi tokens are ERC-20 tokens that follow this standard.

Related Terms

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