You may have come across ERC-20 tokens in your crypto explorations. But what are they, exactly?
First things first, ERC stands for Ethereum Request for Comment - a concept created by Fabian Vogelsteller in 2015.
ERC-20 is a technical standard used for creating and issuing smart contracts on the Ethereum network - it’s basically a set of rules and guidelines that an Ethereum token or smart contract must follow. So, if you’re thinking of creating your own Ethereum token, your smart contract will need to implement six mandatory (and three optional) functions defined by the ERC-20 standard.
Sounds simple enough. But where do ERC-20 tokens come in? ERC-20 tokens are the contracts that implement the ERC-20 standard. In other words, they’re the tokens which are created in accordance with the ERC-20 standard.
These tokens are created and used solely on the Ethereum blockchain, have value and can be sent and received just like bitcoin and other altcoins.
How are they beneficial?
The ERC-20 token standard makes creating new tokens extremely easy, since developers now have a foundation to build off. So easy, in fact, that 2017 was dubbed “the year of the ERC-20 token” due to the sheer number of ICOs issued on the Ethereum blockchain that year. In mid-2017, there were around 5,500 ERC-20 smart contracts on the Ethereum network. Today, there are over 400,000.
A standardised token ecosystem also increases the speed and efficiency of trading, since ERC-20 tokens are automatically compatible with each other. So there’s a lot to be gained from getting in on the ERC-20 action.
A lot of well-known cryptocurrencies use the ERC-20 standard. Here are some you might have heard of.
- Dai (DAI)
- Aave Token (AAVE)
- Chainlink (LINK)
- Maker (MKR)
- Tether (USDT)
- Binance Coin (BNB)
- USD Coin (USDC)
- Basic Attention Token (BAT)
- OmiseGO (OMG)
- Wrapped Bitcoin (WBTC)
- Huobi Token (HT)
Yes! Last month, we made the decision to migrate 20% (2 billion WXT) of the total WXT supply from the Stellar to Ethereum network, making it our very first multi-blockchain cryptocurrency. Ethereum-based WXT can now be exchanged on DEX for other ERC-20 tokens. Currently, it can only be bought on DEX aggregator, 1inch, but stay tuned for more trading options coming soon.
As you know, we’re on a mission to bring Decentralised Finance to the masses. Migrating WXT to the most powerful network for DeFi applications gets us one step closer to achieving this goal.
So, how many ERC-20 tokens do you know of? And which do you want to see on the Wirex platform next? Let us know below!