An ERC-20 token is a token standard used on the Ethereum network, one of the leading blockchain and smart contract platforms. "ERC" stands for "Ethereum Request for Comment," which is the process used to propose improvements and standards on the Ethereum network.
The ERC-20 standard defines a set of rules and functions that tokens on the Ethereum network must follow to be considered compatible with this standard. This includes specifications for basic functionalities such as transferring tokens between addresses, querying the balance of a specific address, approving addresses to spend tokens on behalf of the holder, and getting the total supply of tokens in circulation.
The standardization of ERC-20 tokens has enabled the creation of a broad and interoperable ecosystem of tokens on the Ethereum network. Many projects and Initial Coin Offerings (ICOs) have used the ERC-20 standard to issue their own tokens on the Ethereum network. This facilitated trading, listing on exchanges, and integration with wallets and applications that support this standard.
However, it's important to note that as the Ethereum network evolved, other token standards have also been introduced to cater to more complex and specific use cases, such as ERC-721 tokens (used for non-fungible tokens like digital collectibles) and ERC-1155 tokens (which allows the issuance of both fungible and non-fungible tokens within the same smart contract).
