What is an ERC20 token?

 

ERC20 (Ethereum Request for Comments) tokens are tokens that follow a set of standards defined for smart contracts on the Ethereum blockchain. ERC20 define the common rules for developers to adhere to when creating Ethereum tokens.

These standards enable smart contracts (tokens)to share a common programming language. For example, to enable the token to define the total supply of tokens,  “totalSupply” would be used, instead of “totalNumber” or “totalTokens”. Compliance to thestandards avoids confusion and enables the token to interact with wallets, exchanges and different smart contracts without running into issues due to individual token differences.

The set of functions defined by the ERC20 standard are:

  • totalSupply – get the total token supply

  • balanceOf – get the account balance of account address

  • transfer – send amount of tokens

  • transferFrom – define where the tokens are transfering from

  • approve – allow tokens to be withdrawn from sending address

  • allowance – returns the remaining tokens of the address