ERC-20 Token Standard: The Complete Guide

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Introduction

What Is a Token?

Tokens in Ethereum can represent virtually anything:

This versatile functionality needed standardization, leading to the creation of ERC-20. This protocol allows developers to create interoperable tokens that work seamlessly across Ethereum's ecosystem.

What Is ERC-20?

ERC-20 establishes a standard for fungible tokens—where each token is identical in type and value (e.g., 1 ETH = 1 ETH). It ensures uniformity, enabling tokens to be traded, stored, and integrated into applications predictably.

Prerequisites

Before diving deeper, familiarize yourself with:

Core Features of ERC-20

Proposed in November 2015 by Fabian Vogelsteller, ERC-20 (Ethereum Request for Comments 20) defines an API for tokens within smart contracts. Key functionalities include:

  1. Transferring tokens between accounts.
  2. Checking balances of specific addresses.
  3. Querying total supply of tokens in circulation.
  4. Approving third parties to spend tokens on behalf of a user.

Technical Specifications (EIP-20)

Required Methods

function name() public view returns (string)
function symbol() public view returns (string)
function decimals() public view returns (uint8)
function totalSupply() public view returns (uint256)
function balanceOf(address _owner) public view returns (uint256 balance)
function transfer(address _to, uint256 _value) public returns (bool success)
function transferFrom(address _from, address _to, uint256 _value) public returns (bool success)
function approve(address _spender, uint256 _value) public returns (bool success)
function allowance(address _owner, address _spender) public view returns (uint256 remaining)

Required Events

event Transfer(address indexed _from, address indexed _to, uint256 _value)
event Approval(address indexed _owner, address indexed _spender, uint256 _value)

Practical Examples

Interacting with ERC-20 Tokens Using Web3.py

First, install the Web3.py library:

pip install web3

Here’s a script to fetch token details (e.g., DAI and WETH):

from web3 import Web3

w3 = Web3(Web3.HTTPProvider("https://cloudflare-eth.com"))
dai_addr = "0x6B175474E89094C44Da98b954EedeAC495271d0F"
weth_addr = "0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2"
user_addr = "0xA478c2975Ab1Ea89e8196811F51A7B7Ade33eB11"

simplified_abi = [
    {
        'inputs': [{'internalType': 'address', 'name': 'account', 'type': 'address'}],
        'name': 'balanceOf',
        'outputs': [{'internalType': 'uint256', 'name': '', 'type': 'uint256'}],
        'stateMutability': 'view', 'type': 'function'
    },
    # ... (include other methods like symbol(), decimals(), totalSupply())
]

dai_contract = w3.eth.contract(address=w3.toChecksumAddress(dai_addr), abi=simplified_abi)
print(f"DAI Balance: {dai_contract.functions.balanceOf(user_addr).call() / 10**18}")

👉 Explore more Ethereum tokens

FAQs

Why is ERC-20 important?

ERC-20 standardizes token interactions, ensuring compatibility across wallets, exchanges, and dApps. Without it, each token would require custom integration.

Can ERC-20 tokens represent non-fungible assets?

No. For unique assets (e.g., NFTs), use ERC-721 or ERC-1155.

How do I create an ERC-20 token?

Use frameworks like OpenZeppelin to deploy a compliant contract in minutes.

👉 Learn about token deployment

Further Reading