Introduction to ERC20
The ERC-20 standard defines a common set of rules for creating tokens on the Ethereum blockchain. This ensures compatibility between different tokens and allows seamless interaction with wallets, exchanges, and decentralized applications (dApps).
Key Features of ERC20
- Standardized Token Interface: Enables uniform integration across platforms
- Transfer Functionality: Supports basic token transfers between addresses
- Ownership Tracking: Maintains transparent records of token holders
- Approval System: Allows delegated spending through third-party contracts
Technical Specification
Required Methods
totalSupply()
Returns the total token supply in circulation.
function totalSupply() view returns (uint256 totalSupply)balanceOf()
Returns the token balance of a specified address.
function balanceOf(address _owner) view returns (uint256 balance)transfer()
Moves _value amount of tokens to _to address and MUST fire the Transfer event.
function transfer(address _to, uint256 _value) returns (bool success)transferFrom()
Transfers _value amount tokens from _from to _to, MUST trigger Transfer event.
function transferFrom(address _from, address _to, uint256 _value) returns (bool success)approve()
Allows _spender to withdraw from your account multiple times, up to _value amount.
function approve(address _spender, uint256 _value) returns (bool success)allowance()
Returns the amount which _spender is still allowed to withdraw from _owner.
function allowance(address _owner, address _spender) view returns (uint256 remaining)Optional Methods
name()
Returns the token name (e.g., "MyToken").
function name() view returns (string name)symbol()
Returns the token symbol (e.g., "MTK").
function symbol() view returns (string symbol)decimals()
Returns the token's decimal precision (e.g., 18 for standard ETH precision).
function decimals() view returns (uint8 decimals)Mandatory Events
Transfer
MUST trigger when tokens are transferred, including zero-value transfers.
event Transfer(address indexed _from, address indexed _to, uint256 _value)Approval
MUST trigger on any successful call to approve().
event Approval(address indexed _owner, address indexed _spender, uint256 _value)Security Considerations
- Zero Transfer Handling: All implementations MUST properly handle zero-value transfers
- Approval Race Condition: Users should reset approvals to zero before changing amounts
- Balance Verification: Contracts MUST verify sufficient balances before transfers
👉 Learn more about secure token implementations
Implementation Examples
Popular ERC20 Implementations
- OpenZeppelin StandardToken: Industry-standard secure implementation
- MiniMeToken: Implements approval reset pattern
- Custom Implementations: Various gas-optimized versions
FAQ Section
What makes ERC20 tokens special?
ERC20 tokens benefit from Ethereum's network effects and can be immediately supported by wallets, exchanges, and dApps that recognize the standard.
Can ERC20 tokens have different decimal places?
Yes, the standard allows tokens to specify their own decimal precision (typically 18 to match ETH).
How do token approvals work?
Approvals allow smart contracts to spend tokens on your behalf, useful for decentralized exchanges or other DeFi applications.
What happens if I send tokens to a contract address?
Tokens sent to non-ERC20 compatible contracts may become permanently locked. Always verify destination addresses.
👉 Explore top ERC20 token projects
Best Practices for Developers
- Include All Optional Methods: Improves usability across platforms
- Implement Security Patterns: Follow approval reset recommendations
- Thorough Testing: Verify edge cases (zero transfers, maximum values)
- Gas Optimization: Consider batch operations for frequent interactions
Future Developments
The ERC20 standard continues to evolve with proposals like:
- ERC-223 (safer transfers)
- ERC-777 (advanced features)
- ERC-1363 (payable tokens)
Conclusion
The ERC20 standard has become the foundation of Ethereum's token ecosystem, enabling interoperability across thousands of projects. By understanding and properly implementing this specification, developers can create robust, widely-compatible tokens that power the decentralized economy.
For those interested in token development, numerous resources and community support are available to help navigate this essential Ethereum standard.