What is an ERC-20 token and why is it called that?
What are ERC-20 tokens? These are standardized digital assets (complex computer codes) that are compatible with the Ethereum network. After Bitcoin, Ethereum is the second-biggest cryptocurrency globally in terms of market capitalization. Tokens depend on the power of the “ether” blockchain and are built on a single principle.
This was done in order to simplify the task for programmers and reduce the number of errors. In particular, related to the compatibility of smart contracts and wallets, exchanges, and decentralized applications.
The generally accepted ERC20 token development service standard appeared in 2015 on the GitHub programmers forum. Now there are more than 28 million computer program developers registered there.
In November 2015, question number 20 was opened in the thread for proposals for changes to the Ethereum protocol (abbreviated as ERC). It was created by Fabian Vogelsteller - the father of ICO - together with Vitalik Buterin. Therefore, the new token standard was called ERC-20, combining the name of the branch and the post number.
What standards do ERC-20 tokens support?
These digital assets have six required parameters and three recommended ones. Let's consider the required ones:
- totalSupply
- balance0f
- transfer
- transferFrom
- allowance
- approve
Recommended settings include:
- token name;
- its symbol, or ticker;
the number of digits available after the decimal point (Bitcoin has 8).
The most famous ERC-20 tokens are the Binance exchange coin BNB, VeChain assets, ZRX, OmiseGO, Zilliqa, ICON and TrueUSD.
In 2018, large-scale projects such as TRON and EOS migrated from the Ethereum network. They got rid of the ERC20 token development standard and switched to their own blockchain.