What it is
ERC-20, or Ethereum Request for Comment 20, is a widely adopted technical standard for smart contracts on the Ethereum blockchain. It defines a common set of rules and functions that fungible tokens must implement, such as how tokens are transferred, how balances are checked, and how tokens are approved for spending by other contracts. This standardization ensures interoperability, allowing different tokens to interact seamlessly with wallets, exchanges, and decentralized applications.
ERC-20 tokens are ubiquitous in the crypto market, representing various assets from stablecoins (like USDC, USDT) to governance tokens and utility tokens. Their prevalence means that most token listings on centralized and decentralized exchanges are ERC-20 compliant. Retail investors frequently buy, sell, and transfer ERC-20 tokens, making understanding this standard fundamental. News often covers new ERC-20 token launches, airdrops, and their integration into DeFi protocols.
Why it matters
Most tokens you encounter on Ethereum are ERC-20, making this standard crucial for understanding how they work and interact.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice