ERC-20 is a standard developed by the Ethereum blockchain. Furthermore, it is the set of rules and policies that guide the developers to create the token according to standard. People can create their tokens by using the ERC-20 standard and can deploy them on the Ethereum blockchain. According to today's rough analysis, there are more than 120 million deployed tokens on the Ethereum blockchain like Tether, Shiba Inu, The Sandbox, BudBlockz, Chainlink, UniSwap, and many others.
Today’s article is all about what is the ERC-20 Ethereum Token Standard so let’s get started and have a broader view of it!
What is the ERC-20 Ethereum Token Standard
As we already discuss the Ethereum blockchain in the previous article if you are new to this platform then click here to visit
This article is all about ERC - 20, ERC - 20 stands for Ethereum Request for Comments - 20. It is the standards that have a set of rules and guidelines to develop the smart contract of the different tokens. For instance, if you want to develop your token first, you must create a contract for it. ERC - 20 helps you when you create a contract for your token.
According to this standard, you must have to define the following details about the token:
- Name of the token
- Symbol of token
- Decimal value to represent the smallest unit of token
Furthermore, you have to set different methods for the contract like Balance Method, Total Supply, Transfer, Transfer From, Approve and Allow methods.
How ERC-20 Ethereum Token Standard Works
Ethereum is a blockchain platform where you can deploy your smart contracts, one of the most common examples of this is ERC - 20 token that deploys on the Ethereum blockchain. Each token must have a smart contract designed according to ERC - 20 standards so that it can be deployed over the Ethereum blockchain.
But what if your contract is not according to the ERC - 20 standard the answer is quite simple your token would be different from other ERC - 20 tokens which is almost difficult to deploy on the Ethereum blockchain.
Why it is difficult? Because, when the companies design their token without guidelines and standards so it is possible each company has come up with different tokens. So here it would be the headache, the exchange has to write a different contract for each token. It increases the complexity and complexity leads to more time consumption so that's why ERC - the 20 standards are designed to guide each ERC - 20 tokens developer.
ERC - 20 is a standard and provides a set of rules and guidelines to develop the ERC - 20 tokens. Furthermore, it helps the exchange to create the same contract against each token as well as eliminates the complexity. Like, different contract creation against each token is quite a complex and time-consuming task.