Think of ERC-20 as a common blueprint. It specifies a small set of functions every compliant token must implement, such as reporting a balance, transferring tokens, and approving another contract to move them on your behalf. Because thousands of tokens all speak this identical language, a wallet or exchange that supports the standard can support virtually any ERC-20 token without writing custom code for each one, which is a huge practical convenience.
This interoperability is a major reason Ethereum became the default home for tokens. When a new project issues an ERC-20 token, it instantly plugs into the existing ecosystem of wallets, exchanges and DeFi apps rather than having to build support from scratch. Most of the well-known tokens you will meet on Ethereum, including many stablecoins and governance tokens, are ERC-20s, which is why the standard is often described as the workhorse of the network.
One practical point trips up newcomers: because an ERC-20 token is not Ethereum's native coin, you still need ether on hand to pay the gas fee whenever you send one. Other standards exist for different jobs, such as ERC-721 behind most NFTs, but ERC-20 remains the go-to for interchangeable, or fungible, tokens where every unit is identical to every other.
Key takeaways
- ERC-20 is Ethereum's standard for fungible tokens, defining shared functions like balance checks and transfers.
- Because tokens share this template, any ERC-20-aware wallet or exchange can handle nearly all of them.
- You still need ether to pay gas when moving an ERC-20 token, since the token is not the native coin.
ERC-20 — perguntas frequentes
Why does the ERC-20 standard matter?
It lets thousands of different tokens behave identically to wallets and apps, so they are instantly compatible with the wider ecosystem instead of each needing bespoke support. That shared template is a big reason Ethereum hosts so many tokens.
Do I need ether to send an ERC-20 token?
Yes. ERC-20 tokens are not Ethereum's native coin, so the network fee, or gas, still has to be paid in ether. Running out of ETH is a common reason a token transfer will not go through even when you hold plenty of the token.
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