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What is ERC-20 Token?

What is ERC20 Token

What Is An ERC-20 Token?

An ERC-20 token is a specific type of smart contract that is created on the Ethereum blockchain. ERC stands for “Ethereum request for comment”. ERC-20 was first proposed by the Ethereum community in 2015 and officially recognized in September 2017. ERC-20 tokens were the first token standard that essentially made it easy for anyone to create their own cryptocurrency with minimal coding knowledge. Although most ERC-20 crypto projects haven’t been able to gain noteworthy adoption, several have become well-known over the years. In fact, several ERC-20 token projects have surpassed $1 billion market caps today.

Popular ERC-20 Tokens

The projects featured here have all reached a market cap of over $1 billion, each having a unique focus in the broader cryptocurrency market.


USD Coin is a stablecoin, which is a cryptocurrency whose value is pegged to a non-crypto asset (generally a fiat currency). USDC is one of many stablecoins worth the equivalent of one United States Dollar. DAI and USDT are two other examples. While USDC originally launched as an ERC-20 token on the Ethereum blockchain, today it is available on many other blockchains too. These include Solana, Algorand, and Tron. As of October 2021, over $32 billion USDC are in circulation.

Wrapped Bitcoin (WBTC)

Wrapped Bitcoin (WBTC) is similar to USDC in that its value is pegged to that of another asset. WBTC is slightly different since its value matches Bitcoin (BTC) at a 1:1 ratio. A consortium of projects originally created WBTC to represent the value of Bitcoin on the Ethereum blockchain. Decentralized applications (dApps) and custodial applications for lending and borrowing both frequently use this ERC-20 token.

SushiSwap (SUSHI)

SushiSwap is a popular decentralized exchange. Users can trade Ethereum and ERC-20 tokens on SushiSwap. The platform rewards liquidity providers by sharing a portion (currently 0.25%) of transaction fees generated. Liquidity providers select a trading pair (i.e. ETH/SUSHI) on the platform. These users provide liquidity for traders who make swaps between that particular trading pair. Users can also stake (lock) SUSHI to provide the platform with more liquidity. The daily APR for staking SUSHI fluctuates according to supply and demand. SUSHI stakers receive an additional amount (currently 0.05%) of the platform’s transaction fees.

Decentraland (MANA)

Decentraland is a virtual reality platform in which users purchase virtual plots of land that they can later navigate, build upon, and monetize. The platform uses two tokens, MANA and LAND. MANA is an ERC-20 token for the platform’s decentralized autonomous organization (DAO), a system that enables MANA holders to determine how the Decentraland world behaves. MANA holders propose and vote on policy updates, the specifics of upcoming LAND auctions, and the types of content that are allowed on the platform.

FAQs About ERC-20 Tokens

  1. How many ERC-20 tokens exist? Nearly 500,000 ERC-20 tokens exist as of October 2021. This number increases every day as news projects launch.

  2. Do I need to hold Ethereum (ETH) to use ERC-20 tokens? Yes. The Ethreeum blockchain requires ETH to pay for gas (network fees) on any transaction, including ERC-20 token transfers.

  3. Do all Ethereum tokens use the ERC-20 standard? No. Chainlink (LINK), as an example, uses the ERC-677 token standard to extend the functionality of ERC-20. ERC-721 is a popular token standard for creating non-fungible tokens (NFTs) on Ethereum.

  4. What are the fees for transferring ERC-20 tokens? Fees fluctuate depending on how many transactions are taking place on the Ethereum blockchain at a particular time. Ethereum 2.0 upgrades are helping with network scalability, which ultimately will help process more transactions at once at lower fees. Ethereum Gas Tracker tracks real-time fees for different types of Ethereum blockchain transactions.

  5. Where do I find info about a specific ERC-20 token? Etherscan is the most popular block explorer for finding data related to transactions on the Ethereum blockchain, including any ERC-20 token that has been deployed on the Ethereum mainnet.

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