ERC-20 tokens are one of the most foundational elements in the world of decentralized finance (DeFi) and blockchain innovation. As the dominant token standard on the Ethereum network, they power thousands of projects, from decentralized exchanges to stablecoins and governance systems. Whether you're new to crypto or expanding your knowledge, understanding ERC-20 is essential for navigating the digital asset landscape.
Understanding ERC-20 Tokens
ERC-20 stands for Ethereum Request for Comment, with "20" being the unique proposal number. It’s a technical standard used for creating and implementing tokens on the Ethereum blockchain. Introduced in 2015, ERC-20 established a common set of rules that allow smart contracts to interact seamlessly across platforms.
This standard defines how tokens are transferred, how data is accessed, and how supply and balance are tracked. Because all ERC-20 tokens follow the same interface, wallets, exchanges, and decentralized applications (dApps) can support them without needing custom integration for each new token.
Thanks to this uniformity, developers can launch their own tokens efficiently—without building an entirely new blockchain. This flexibility has fueled an explosion of innovation, resulting in over 500,000 ERC-20-compatible tokens issued since its inception.
Core Features of ERC-20 Tokens
What makes ERC-20 so widely adopted? Its design includes six essential functions and two optional ones, ensuring consistency and reliability:
- Fungibility: Each token is interchangeable with another of the same type, just like traditional currency.
- Transferability: Tokens can be sent between Ethereum addresses using smart contracts.
- Fixed Supply: Most ERC-20 tokens have a predefined maximum supply, preventing arbitrary inflation by developers.
- Smart Contract Compatibility: They operate within Ethereum’s robust smart contract environment, enabling automation and programmable logic.
These features make ERC-20 ideal for crowdfunding (via ICOs), decentralized governance, rewards programs, and asset tokenization.
Popular ERC-20 Tokens in Use Today
The success of the ERC-20 standard is evident in the wide range of high-impact tokens built upon it. Below are some of the most influential examples, ranked by market relevance and ecosystem contribution.
Ethereum (ETH)
While ETH itself isn’t an ERC-20 token (it's the native currency of the Ethereum blockchain), it powers every ERC-20 transaction. All ERC-20 token transfers require ETH to pay gas fees—the cost of executing operations on the network.
Launched in 2015 by Vitalik Buterin and others, Ethereum revolutionized blockchain technology by introducing smart contracts. After "The Merge" in 2022, it transitioned from proof-of-work to proof-of-stake, drastically reducing energy consumption while maintaining security and decentralization.
Shiba Inu (SHIB)
Originally launched as a meme coin in 2020, SHIB evolved into a full-fledged DeFi ecosystem. Built entirely on Ethereum as an ERC-20 token, it supports ShibaSwap—a decentralized exchange—and integrates NFTs, staking, and governance.
Despite its playful origins, SHIB has demonstrated real utility through its community-driven development model and growing adoption in digital payments and collectibles.
Wrapped Bitcoin (WBTC)
WBTC brings Bitcoin’s value onto the Ethereum network. As an ERC-20 token, it’s backed 1:1 by real Bitcoin held in custody, allowing BTC holders to participate in DeFi protocols like lending, yield farming, and trading.
By bridging two major blockchains, WBTC enhances liquidity across ecosystems—proving how interoperability can unlock new financial possibilities.
Uniswap (UNI)
UNI is the governance token for Uniswap, one of the largest decentralized exchanges (DEXs) in the world. Distributed via airdrop to early users, UNI allows holders to vote on protocol upgrades and fee structures.
With over a billion tokens in circulation and ongoing inflation at 2% annually to incentivize participation, UNI exemplifies how tokenomics can align user incentives with platform growth.
Chainlink (LINK)
LINK is an ERC-20 token used by Chainlink, a decentralized oracle network that connects smart contracts with real-world data such as price feeds, weather information, or sports results.
Oracles solve a critical problem: blockchains cannot access external data natively. Chainlink ensures trustless, tamper-proof data delivery—making it indispensable for DeFi applications requiring accurate off-chain inputs.
Polygon (MATICERC20)
Polygon began as a Layer 2 scaling solution for Ethereum, addressing high gas fees and slow transaction speeds. The MATICERC20 token facilitates staking, governance, and transaction fees within the Polygon ecosystem.
Though Polygon now operates its own chain, its original ERC-20 version remains widely supported—highlighting how projects can evolve while maintaining backward compatibility.
Maker (MKR)
MKR governs the MakerDAO protocol, which issues DAI—a decentralized stablecoin pegged to the US dollar. MKR holders vote on risk parameters, collateral types, and system upgrades.
When DAI’s stability is threatened, MKR tokens are minted and sold to raise capital—an innovative mechanism that maintains equilibrium without centralized control.
Basic Attention Token (BAT)
BAT powers Brave Browser’s privacy-focused advertising ecosystem. Users earn BAT for viewing ads, while publishers receive tokens based on user attention metrics.
This model flips traditional digital advertising by rewarding users directly—showcasing how blockchain can create fairer online economies.
Compound (COMP)
COMP initiated the “DeFi Summer” of 2020 through its liquidity mining program. Users who supplied or borrowed assets on the Compound lending platform earned COMP tokens as rewards.
This innovation sparked widespread interest in yield farming—where users optimize returns by moving capital across DeFi protocols—and helped cement Ethereum as the heart of decentralized finance.
Loopring (LRC)
LRC enables high-performance decentralized exchanges using zkRollups—a Layer 2 scaling technology. Loopring combines order book trading with automated market makers (AMMs), offering performance close to centralized exchanges.
Its non-custodial design ensures users retain full control of their funds—enhancing security without sacrificing speed or functionality.
Why ERC-20 Remains Dominant
Despite newer standards like ERC-721 (for NFTs) and ERC-1155 (multi-token standard), ERC-20 remains unmatched in adoption. Its simplicity, reliability, and broad support across wallets and exchanges make it the go-to choice for launching fungible tokens.
Moreover, major crypto platforms—including exchanges like OKX—offer seamless support for depositing, trading, and managing ERC-20 tokens.
👉 See how easy it is to manage multiple ERC-20 assets in one secure wallet—start exploring today.
Frequently Asked Questions (FAQ)
Q: Is every token on Ethereum an ERC-20?
A: No. While many are, some tokens use different standards—for example, NFTs typically use ERC-721 or ERC-1155.
Q: Can I store ERC-20 tokens in any wallet?
A: Most modern crypto wallets support ERC-20 tokens, but always verify compatibility before transferring funds.
Q: How do I buy ERC-20 tokens?
A: You can purchase them directly on major exchanges like OKX or through decentralized platforms using ETH.
Q: Are ERC-20 tokens safe?
A: The standard itself is secure, but individual tokens may carry risks—always research projects before investing.
Q: Can ERC-20 tokens work on other blockchains?
A: Not natively. However, they can be bridged to other chains via wrapped versions or cross-chain protocols.
Q: What happens if I send an ERC-20 token to a non-Ethereum address?
A: It may be lost permanently. Always confirm network compatibility before sending any crypto.
Final Thoughts
ERC-20 has become the backbone of Ethereum’s thriving ecosystem. From enabling DeFi innovations to powering social tokens and digital economies, its impact is undeniable. As blockchain technology evolves, so too will token standards—but for now, ERC-20 remains the gold standard for fungible digital assets.
Whether you're investing, developing, or simply exploring the space, understanding this standard is crucial. And with platforms making access easier than ever, getting started has never been simpler.
👉 Begin your journey into Ethereum-based tokens—securely trade and store top ERC-20 assets today.