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What is the ERC-20 Token ?


 What is the ERC-20  Token?

erc-20, smart contracts, ethereum

The ERC-20 Ethereum token standard is a template for creating exchangeable tokens compatible with the larger Ethereum network. Ethereum or ether is a cryptocurrency that enables the creation of various applications, including tokens, which, unlike most traditional applications, do not require intermediary services to operate.

1) Understand the ERC-20 Ethereum based-token

The ERC-20 standard has infiltrated almost every corner of the crypto ecosystem. Many popular tokens, such as the stablecoin tether and main oracle service Chainlink, are actually ERC-20 tokens under the hood.

  • ERC-20 tokens are digital assets that can be created by anyone, but mostly by technology-focused organizations and companies. Each token has its own unique benefit, such as giving users the right to vote on decisions that affect a project's future, or rewarding customers for performing certain tasks. ERC-20 tokens are typically sold through a variety of different offers to raise startup capital for the underlying project. But in the past, critics have argued that crypto tokens have garnered so much hype, that they have become a tool for sour investments or outright fraud. It has been reported that most of the projects that raised funds during the initial coin supply boom of 2017 failed to generate any returns for their investors.
  • ERC-20 standardizes the core functionality of each token; this means that all tokens created using this framework are interoperable with each other as well as with all ERC-20 compatible services such as MyEtherWallet and MetaMask.
To understand how useful this is, here are some of the problems token generators face when building projects from scratch:

1. Creating Smart Contracts: Smart contracts calculate the total supply of the token, how that supply is distributed, the timing of the issue, etc. play a vital role in determining They also perform basic functions such as querying bearer balances and facilitating the token transfer. Writing these smart contracts is a complex and time-consuming process and often requires a team of expert developers. This can be very expensive and can have devastating effects if smart contracts are not coded properly.

2. Support for wallets and exchanges: Generating tokens without using a well-integrated standard such as the ERC-20 framework means additional work is required to make them compatible with third-party services such as wallets and exchanges.

 2) ERC-20 characteristics

  • Ethereum: Each ERC-20 token is distributed on the Ethereum network.
  • Smart contracts: Every token functionality is governed by a set of smart contracts, ensuring that no individual or organization needs to be approved for the crypto token to work. The code runs automatically when the rules or conditions are met. For example, when transferring a token to someone else, the user does not need to trust anyone to pass it on to the recipient.
  • Every ERC-20 has several required features that developers should implement. The main elements include:
  • Sotal supply: A function that describes the total supply of a token.
  • Balance Of: Displays the token count of a given address.
  • Transfer: Transfer ownership of a token to another user.

3) Popular ERC-20 token

  • Chainlink (LINK)
  • Tether (USDT)
  • Shiba Inu (SHIB)
  • Wrapped Bitcoin (WBTC)
  • OmiseGO (OMG)
  • 0x (ZRX)
  • Maker (MKR)
  • Augur (REP)
  • Golem (GNT)
  • Loopring (LRC)
  • Basic Attention Token (BAT)
  • Binance coin (BNB)