There are a number of token types in the digital asset space that projects base their protocols on. One of the most popular token types is an Ethereum based token known as an ERC-20 token. ERC-20 has emerged as the standard for many protocols and projects because it provides a common set of rules that all ERC-20 tokens can follow, allowing them to interact with one another as needed.
ERC stands for Ethereum Request for Comments. This refers to technical documents or rules that outline standards for programming on the Ethereum Blockchain. ERC-20 tokens are used to execute smart contracts on the Ethereum Blockchain and for token implementation on ERC-20 based projects. Additionally, ERC-20 tokens are highly customizable and can be tailored to many different applications, making them popular among new crypto projects.
Some Popular ERC-20 Based Projects:
- EOS (EOS)
- MATIC (Polygon)
- Enjin Coin
- TRON (TRX)
- VeChain (VET)
- ICON (ICX)
The ERC-20 token type is vital to many projects; it is defined by a common list of rules that all Ethereum tokens must adhere to in order to operate correctly. Some of these rules include how tokens can be transferred, how the network approves transactions, and how users can access data about a token.
ERC-20 tokens are similar, in some respects, to Bitcoin, Litecoin, and any other cryptocurrency, in that ERC-20 tokens are blockchain-based digital assets that have value and can be sent and received. The main difference is that instead of running on their own blockchain, ERC-20 project tokens are issued on the Ethereum network and follow a specific set of rules ensuring compatibility with other ERC-20 tokens and projects.
ERC-20 tokens empower developers to accurately predict how new tokens will function within the larger Ethereum system. This makes life simpler for developers because they can proceed knowing that every new project won't need to be rebuilt every time when a new token is released, as long as the token follows the ERC-20 rules. Compliance with these rules is necessary; it ensures compatibility among many different tokens issued on Ethereum.
Another big part of the appeal of ERC-20 tokens is their flexibility. The parameters set out don't restrict development, so developers can implement additional features and set specific parameters to suit their project's needs.