ERC-20 is the technical standard for fungible tokens created using the Ethereum blockchain, defining a set of rules that all Ethereum-based tokens must follow. ERC-20 tokens are a type of cryptocurrency built on the Ethereum blockchain, representing a variety of things like financial assets, loyalty rewards, and even physical objects.
The ERC-20 token standard is the most popular way to create fungible, interoperable cryptocurrencies on Ethereum and EVM-compatible blockchains like BNB Smart Chain, facilitating seamless integration across wallets, exchanges, and applications. Many well-known cryptocurrencies including Shiba Inu (SHIB), Tether USD (USDT), and USD Coin (USDC) use the ERC-20 standard.
ERC-20 Token Standard
The ERC-20 standard defines a set of rules and requirements that Ethereum-based tokens must follow to ensure compatibility and interoperability across the network. It outlines the necessary functions, events, and specifications for creating fungible tokens on the Ethereum blockchain.
Key Requirements
- Mandatory Functions: The ERC-20 standard requires the implementation of six mandatory functions within the token’s smart contract:
totalSupply(): Returns the total supply of tokens.balanceOf(address): Returns the token balance of a specified address.transfer(address, uint): Transfers a specified amount of tokens to a given address.transferFrom(address, address, uint): Transfers tokens from one address to another, provided the caller has sufficient allowance.approve(address, uint): Approves a specified amount of tokens to be spent by a third-party address.allowance(address, address): Returns the remaining number of tokens that a third-party address is allowed to spend on behalf of the owner.
- Mandatory Events: The standard also mandates the inclusion of two events:
Transfer(address, address, uint): This event is triggered whenever tokens are transferred, providing details about the sender, receiver, and the amount transferred.Approval(address, address, uint): This event is triggered when an approval is granted, providing details about the owner, the approved spender, and the approved amount.
- Optional Functions: The ERC-20 standard defines three optional functions that can be implemented for additional functionality:
name(): Returns the name of the token.symbol(): Returns the symbol of the token.decimals(): Returns the number of decimal places used by the token.
- Token Metadata: ERC-20 tokens must include specific metadata, such as the token name, symbol, decimal places, and total supply.
- Fungibility: ERC-20 tokens are fungible, meaning each token is interchangeable and holds the same value as any other token of the same type.
The ERC-20 standard has become the dominant protocol for creating new tokens on the Ethereum network, with tens of thousands of ERC-20 compliant tokens in existence. Its widespread adoption has facilitated seamless integration across wallets, exchanges, and applications within the Ethereum ecosystem.
Creating an ERC-20 Token
To create an ERC-20 token, several steps need to be followed:
- Set up the Developer Environment
- Install the necessary tools and dependencies, such as Node.js, npm (Node Package Manager), and a code editor like Visual Studio Code.
- Set up a local Ethereum development environment using tools like Ganache or Hardhat.
- Write the ERC-20 Token Smart Contract
- Use the OpenZeppelin ERC-20 contract as a base, which provides a standard implementation of the ERC-20 token standard.
- Customize the contract with your token’s name, symbol, and initial supply.
- Implement any additional features or functionalities you require, such as minting, burning, or access control.
- Write a Deployment Script
- Create a deployment script to compile and deploy your ERC-20 token smart contract to the Ethereum network or a test network like Goerli.
- Deploy the ERC-20 Token
- Use a tool like Remix IDE or Truffle to deploy your ERC-20 token smart contract to the desired Ethereum network or testnet.
- Connect your wallet (e.g., MetaMask) to the network and fund it with test Ether from a faucet if deploying to a testnet.
- Interact with the Deployed Contract
- After successful deployment, interact with the deployed contract to verify its functionality and token details.
- Add the token to your MetaMask wallet by providing the token’s contract address, name, symbol, and decimal places.
- Transfer and Test the Token
- Transfer the newly created ERC-20 token to another Ethereum address or wallet, such as a MetaMask wallet connected to the Kaleido network.
- Test the token’s transfer and balance-checking functionalities to ensure it works as intended.
It’s important to note that while the steps above outline the general process, the specific implementation details may vary depending on the tools, frameworks, and platforms you choose to use. Additionally, it’s recommended to thoroughly test your ERC-20 token contract before deploying it to a live Ethereum network.
Functions of ERC-20 Tokens
ERC-20 tokens have a wide range of applications and use cases, thanks to their standardization and interoperability across different Ethereum applications. They are utilized for stablecoins, governance tokens, utility tokens, asset-backed tokens, in-game currencies, and decentralized finance (DeFi) applications.
Advantages of ERC-20 Tokens
- Interoperability: ERC-20 tokens can be seamlessly integrated and used across various wallets, exchanges, and applications within the Ethereum ecosystem, promoting widespread adoption and liquidity.
- Security: The Ethereum blockchain provides a secure and transparent platform for ERC-20 tokens, with built-in features like immutability and cryptographic verification.
- Customizability: While adhering to the ERC-20 standard, developers can customize their tokens with additional features and functionalities to suit their specific requirements.
- Transparency: The open and decentralized nature of the Ethereum blockchain ensures that all ERC-20 token transactions are publicly visible and auditable, promoting transparency.
- Reduced Costs: ERC-20 tokens eliminate the need for intermediaries, reducing transaction costs and enabling direct peer-to-peer transfers.
- Increased Liquidity: The standardization of ERC-20 tokens facilitates their listing on various cryptocurrency exchanges, increasing their liquidity and trading opportunities.
Disadvantages of ERC-20 Tokens
- Lack of Flexibility: The ERC-20 standard imposes certain constraints, limiting the flexibility to incorporate advanced features or functionalities.
- Security Vulnerabilities: While the Ethereum blockchain is secure, poorly written or audited ERC-20 token contracts can be vulnerable to exploits and hacks.
- High Gas Fees: Transactions involving ERC-20 tokens on the Ethereum network can incur high gas fees, especially during periods of high network congestion.
- Limited Exchange Support: Not all cryptocurrency exchanges support all ERC-20 tokens, which can limit their accessibility and liquidity.
- Potential Governance and Transparency Issues: Centralized governance models or lack of transparency in some ERC-20 token projects can undermine the principles of decentralization and transparency.
Popular examples of ERC-20 tokens include USDT (Tether), LINK (Chainlink), BAT (Basic Attention Token), OMG (OmiseGO), and REP (Augur). These tokens are widely used for various purposes, such as fundraising, payment systems, reward systems, and decentralized applications (dApps).
Notable ERC-20 Tokens
Top ERC-20 Tokens by Market Capitalization
The top 5 tokens by market capitalization are:
- Tether USD (USDT)
- USD Coin (USDC)
- Lido Staked Ether (stETH)
- Shiba Inu (SHIB)
- Wrapped liquid staked Ether 2.0 (wstETH)
These tokens represent a diverse range of use cases, including stablecoins (USDT, USDC), liquid staking derivatives (stETH, wstETH), and meme tokens (SHIB).
Notable Gainers and Losers
Top 5 ERC-20 Token Gainers (Last 24 Hours)
- Crypto One Stop Solution (COS)
- Grok (GROK)
- Stacktical (DSLA)
- Guild of Guardians (GOG)
- Civic (CVC)
Top 5 ERC-20 Token Losers (Last 24 Hours)
- Heroes of Mavia (MAVIA)
- Dotmoovs (MOOV)
- Orion Protocol (ORN)
- Router Protocol (ROUTE)
- SHRAPToken (SHRAP)
These lists highlight the volatility in the ERC-20 token market, with tokens experiencing significant price movements in both directions.
Newly Added ERC-20 Tokens
The newest ERC-20 tokens added to Coinranking are:
- TUBES (TUBES)
- Shib1 (SHIB1)
- Elon (ELON)
- Cosmic Network (COSMIC)
- Ÿ (YAI)
The addition of new tokens to tracking platforms like Coinranking reflects the continuous growth and innovation in the ERC-20 token ecosystem.
Other Notable ERC-20 Tokens
Some other notable ERC-20 tokens include:
| Token | Symbol |
|---|---|
| Wrapped Ether | WETH |
| Tether USD | USDT |
| USD Coin | USDC |
| Xen Crypto | XEN |
| Memecoin | MEME |
| Shiba Inu | SHIB |
| Pepe | PEPE |
| Elon | ELON |
| Dai Stablecoin | DAI |
| Wrapped Bitcoin | WBTC |
| Chainlink Token | LINK |
| Matic Token | MATIC |
| Chainlink | LINK |
| OmiseGO | OMG |
| 0x | ZRX |
| Maker | MKR |
| Augur | REP |
| Golem | GNT |
| Loopring | LRC |
| Basic Attention Token | BAT |
| Uniswap | UNI |
| ApeCoin | APE |
| Curve DAO Token | CRV |
This list covers a wide range of ERC 20 tokens across various applications, including decentralized finance (DeFi), gaming, meme tokens, and more, showcasing the versatility of the ERC-20 standard.
