What Is ERC-20?
ERC-20 is the original token standard for Ethereum.
ERC-20 is a technical standard used to issue and implement tokens on the Ethereum blockchain. It was proposed in November 2015 by Ethereum developer Fabian Vogelsteller and defines a common set of rules such as how the tokens can be transferred, how transactions are approved, and the total supply of tokens. ERC-20 tokens are the most commonly used tokens on the Ethereum network and are designed to be used for paying for functions.
ERC-20 token standard has several limitations and architectural shortcomings. Its approve() and permit() based functions, originally planned for having better smart contract security in Solidity, have proven to be an attractive vector for scams as normal users do not understand they are transferring tokens when calling these methods from their wallets.
The token standard has been adopted by other EVM-based blockchains like BNB Chain, Polygon, Avalanche C-Chain and Fantom.