ERC-20 token standard

ERC-20 is the technical standard for fungible tokens on Ethereum. It was proposed by developer Fabian Vogelsteller in 2015 and defines a common set of functions, such as checking a balance, transferring tokens and approving another address to spend tokens on your behalf.

Because every ERC-20 token works the same way, wallets, exchanges and DeFi apps can support new tokens automatically. Thousands of tokens use the standard, including USDT and USDC on Ethereum, UNI, LINK and many governance tokens. Other EVM chains use compatible standards: BEP-20 on BNB Chain is essentially the same design, and Tron's TRC-20 is modelled on it.

Holding or sending ERC-20 tokens requires a small amount of ETH for gas. The "approve" function is also where many scams strike: approving a malicious contract can let it move your tokens at any time. For NFTs, Ethereum uses different standards, ERC-721 and ERC-1155.