The ERC-20 standard is a set of rules that specify how smart contracts on the Ethereum network should function. These rules define how tokens are transferred between parties and also how to display information on them.
ERC-20 has become widely used for creating new cryptocurrencies that operate on top of the Ethereum network, and developers can use them to build DApps that interact with their native tokens.
What is ERC-20
ERC stands for Ethereum Request for Comment and refers to the proposal process that developers use to submit ideas or changes to the Ethereum protocol.
The ERC-20 standard is a technical standard used for smart contracts on the Ethereum blockchain. It defines a common list of rules that an Ethereum token has to implement, which allows people to use your token and other tokens in their own Ethereum wallet.
The most popular ERC-20 token is probably Ether itself (ETH), which is the name of this standard. In fact, you could call Ether just another ERC-20 token because it implements all requirements set out by this specification. Therefore, there are many other currencies besides ETH that also meet these criteria.
What Are ERC-20 Tokens on the Ethereum Network?
An ERC-20 token is a digital asset created on top of the Ethereum protocol, which means they can only be accessed using an Ethereum wallet address (and not any other kind of cryptocurrency wallet).
Tether USD (USDT)
Tether USD (USDT) is a stablecoin that’s backed by one US dollar for each Tether created. It was created with the goal of being a cryptocurrency that can be used to avoid price fluctuations on exchanges and to transfer money across borders quickly and easily.
It is also one of the stablecoins that is used often in a trading pair such as USTC USDT, SWEAT USDT, SOLUSDT and many other pairs since it is backed by fiat currency, specifically US dollars.
However, it isn’t technically a cryptocurrency or security and doesn’t have any utility on its own network. Instead, it derives its value from the fact that you can trade it back into US dollars at any time via the company behind Tether or through other third-party exchanges like KuCoin.
USD Coin (USDC)
USD Coin (USDC) is a stablecoin that is pegged to the US dollar. It’s backed by a reserve of US dollars and can be traded on many exchanges. Stablecoins are used for trading on exchanges that don’t support fiat currency.
Shiba Inu (SHIB)
The Shiba Inu (SHIB) token is a crypto token on the Ethereum network that rewards users for holding and staking tokens on the Shiba Inu platform. The Shibas’ main function is to provide rewards, but they also have other uses, including as collateral for staking and paying fees at the Shiba Inu exchange.
Binance USD (BUSD)
Binance US Dollar (BUSD) is the first stablecoin to be issued by a major cryptocurrency exchange.
It’s an ERC-20 token, which means it’s built on the Ethereum network and can be traded for other cryptocurrencies or fiat currencies. You can buy and sell BUSD without ever having to hold your money in dollars. In many ways, this makes it similar to Tether (USDT) — but with some important differences that are worth exploring further.
BNB (BNB)
BNB is the token used to pay fees on the Binance exchange. However, it has become so popular that it does not just pay for transaction fees anymore but also has become a cryptocurrency in its own right. Thus, you can buy, sell and trade BNB like any other asset in the cryptocurrency market.
Binance Coin (BNB) is not a stablecoin – it’s a cryptocurrency! It is however one of the most widely traded cryptocurrencies in the world (in terms of daily volume). It was created by Binance in 2017 as part of their ICO or Initial Coin Offering which raised $15 million in Ethers (ETH).
DAI Stablecoin (DAI)
DAI is a stablecoin that is backed by ether. The DAI token was created by MakerDAO. It’s essentially a decentralized stablecoin that is pegged to the US dollar and can be used in smart contracts on the Ethereum network.
HEX (HEX)
HEX is a utility token on the Ethereum blockchain that powers the HEX platform. The HEX platform, which we’ll discuss in more detail later on in this article, allows users to create their own ERC-20 tokens and trade them on an exchange built into HEX’s platform.
Hex is a digital currency – it can be used as money or traded for other currencies on crypto exchanges. It’s also used to pay transaction fees when moving tokens between wallets or when making transactions off of its network (such as sending tokens from one user to another).
Bitfinex LEO (LEO)
LEO is a stablecoin that’s backed by the US dollar. It’s an ERC-20 token on the Ethereum network and has a 1:1 ratio with its fiat counterpart.
Stablecoins are an important part of any cryptocurrency ecosystem, especially when it comes to exchanges where traders and investors can buy or sell cryptocurrencies with one another. Stablecoins allow traders to move in and out of positions without having to worry about price fluctuations as much as they would if they were using other forms of payment like PayPal or credit cards (both great options in their own right).
MAKER (MKR)
The Maker (MKR) is a utility token that serves as the governance token for the decentralized stablecoin DAI. MKR is also used to pay transaction fees on the MakerDAO system.
MKR holders can vote on important decisions related to DAI, such as whether it should increase or decrease in value and whether new CDPs should be created. In return, they receive rewards when these decisions are made correctly by other users of DAI.
You can purchase MKR using Ethereum at any major exchange like KuCoin, Binance or Coinbase Pro/GDAX (which both allow you to purchase BTC/ETH). Once purchased, store it securely using an offline hardware wallet like Ledger Nano S or Trezor Model T .
Final Thoughts
ERC-20 is a standard for tokens on the Ethereum network. It provides a set of rules that developers must follow in order for their token to be compatible with the Ethereum protocol.
This standard was developed by Fabian Vogelsteller, who also created the popular wallet MyEtherWallet which allows users to store Ether and other ERC20-compliant tokens. These tokens are used in many different projects including decentralized exchanges and smart contracts that run on top of Ethereum blockchain technology.
