What Is ERC-20? The Ethereum Token Standard Explained
ERC-20 is the standard behind USDT, USDC, LINK and 2.3 million other Ethereum tokens. Here is what it means, what the "ERC-20 network" on an exchange really is, ERC-20 vs TRC-20, and how to avoid scam tokens.
What are ERC-20 Tokens?
ERC-20 is a technical standard for creating tokens on the Ethereum blockchain. It defines a common set of rules that all Ethereum tokens can follow, which means any ERC-20 token works with any ERC-20-compatible wallet or exchange automatically.
The standard was proposed by Fabian Vogelsteller and Vitalik Buterin in November 2015 and has since become the foundation for the vast majority of tokens on Ethereum.
Etherscan’s token tracker now lists more than 2.3 million token contracts on Ethereum. The vast majority are worthless or abandoned, which is worth remembering before you buy anything unfamiliar.
ERC stands for “Ethereum Request for Comments,” the process for proposing standards. The 20 is simply the proposal’s number.
Why ERC-20 Matters
Before ERC-20, each token had its own unique interface. This made it difficult and expensive for wallets and exchanges to support new tokens. ERC-20 standardized everything:
- Universal compatibility: Any ERC-20 token works with any Ethereum wallet (MetaMask, Ledger, Rainbow, etc.)
- Easy exchange listing: Exchanges can add support for new tokens with minimal effort
- DeFi composability: Tokens can plug into lending protocols, decentralized exchanges, and other DeFi applications seamlessly
Well-Known ERC-20 Tokens
| Token | Symbol | Purpose | Market Cap (Sept 2026) |
|---|---|---|---|
| Tether | USDT | US Dollar stablecoin | ~$184B |
| USD Coin | USDC | US Dollar stablecoin | ~$74B |
| Lido Staked ETH | stETH | Liquid staking receipt | ~$26B |
| Chainlink | LINK | Decentralized oracle network | ~$11B |
| Uniswap | UNI | DEX governance token | ~$5.5B |
| Aave | AAVE | Lending protocol governance | ~$2.6B |
Figures are from Etherscan’s token tracker in late September 2026 and change constantly. Note that the stablecoin numbers cover every chain the token is issued on, not only Ethereum. Tether and USDC exist as separate tokens on Tron, Solana and several Layer 2 networks, which is exactly why the network you pick matters (more on that below).
How ERC-20 Tokens Work
Every ERC-20 token contract implements the same core functions, as defined in the official standard:
- totalSupply: How many tokens exist
- balanceOf: How many tokens a specific address holds
- transfer: Send tokens from your address to another
- approve + transferFrom: Let another contract spend tokens on your behalf (used in DeFi)
Because every token follows these same rules, a single wallet app can manage thousands of different tokens without custom code for each one.
Interestingly, ETH itself is not an ERC-20 token, since it predates the standard. To use ETH in apps that expect a standard token, it gets wrapped into an ERC-20 version called WETH that is always worth exactly one ETH.
How to Store ERC-20 Tokens
Any Ethereum-compatible wallet can hold ERC-20 tokens:
- MetaMask: Most popular browser extension and mobile wallet (see our browser wallet guide for a full comparison)
- Ledger or Trezor: Hardware wallets for maximum security
- Rainbow: User-friendly mobile wallet
- Rabby: Security-focused browser wallet with transaction previews
Not sure which wallet to choose? Our crypto wallets guide walks through every option.
Since ERC-20 tokens live on the Ethereum network, you need a small amount of ETH to pay gas fees when sending them. Without ETH in your wallet, you cannot move your tokens.
Risks
Not all ERC-20 tokens are created equal. The standard makes it easy for anyone to create a token, which means scam tokens are common.
Red flags to watch for:
- Tokens you did not buy suddenly appearing in your wallet (do not interact with them)
- Tokens with no public audit of their smart contract code
- Tokens that prevent you from selling (honeypot contracts)
- Projects with anonymous teams and no verifiable track record
Before interacting with any unfamiliar token:
- Look up the contract address on Etherscan and check that the contract code is verified
- Check whether the project has published a third-party audit
- Search for the project on CoinGecko or CoinMarketCap to see if it is a known project
- Read the project documentation and check their GitHub for code activity
The Token Approval Risk
The approve function is the most common attack vector against ERC-20 holders. When you use a DEX or DeFi app, you typically grant that contract permission to move your tokens. Malicious contracts can ask for unlimited approval, then drain those tokens later if you sign their transaction.
Wallet drainer kits are built around exactly this: a fake mint or airdrop page asks you to sign an approval, and your tokens leave minutes later. Audit your active approvals at revoke.cash every few months and revoke anything you no longer recognize or use. For the full list of scam patterns, see our guide to common crypto scams.
What Is the “ERC-20 Network”?
When you withdraw USDT or USDC from an exchange, you will often see a dropdown with options like “ERC-20,” “TRC-20,” “Solana,” or “Arbitrum.” This is where a lot of beginners get confused.
ERC-20 is not a network. It is a token standard. When an exchange says “ERC-20 network,” it means the Ethereum mainnet. The label exists because the same stablecoin is issued on several blockchains, and the exchange needs to know which version to send.
Picking the network is the part that matters. The receiving address must be on the same blockchain you select. Send ERC-20 USDT to an address that only accepts Tron USDT and the funds can be lost or stuck. Always match the network on both sides, and send a small test first. Our wallet address guide explains why the same 0x address works on several chains, which makes this mistake easy to make.
ERC-20 vs TRC-20
TRC-20 is Tron’s copy of the ERC-20 idea. It is the most common alternative you will see for USDT, because Tron transfers are cheap.
| ERC-20 | TRC-20 | |
|---|---|---|
| Blockchain | Ethereum | Tron |
| Address format | Starts with 0x | Starts with T |
| Fees paid in | ETH | TRX (or Tron “energy”) |
| Typical transfer cost | Higher on mainnet, cents on Layer 2 | Usually low |
| DeFi and app support | Largest ecosystem in crypto | Much smaller |
| Main use | Stablecoins, DeFi, governance, almost everything | Mostly USDT transfers |
Neither is “safer” as a token format. The practical difference is cost and where you are sending it. If the destination is an Ethereum wallet or app, use ERC-20 (or a supported Layer 2). If the recipient explicitly gave you a Tron address starting with T, use TRC-20. Moving between them requires an exchange or a bridge, not a normal transfer.
ERC-20 vs ERC-721 and ERC-1155
The quickest way to understand ERC-20 is to compare it with the NFT standard.
| ERC-20 | ERC-721 | ERC-1155 | |
|---|---|---|---|
| Token type | Fungible | Non-fungible | Both |
| Every unit identical? | Yes, like dollars | No, each token is unique | Depends on the item |
| Divisible? | Yes, usually to 18 decimals | No | Fungible items yes |
| Typical use | Stablecoins, governance tokens, WETH | NFTs, ENS names | Game items, editions |
One USDC is always interchangeable with any other USDC. One ENS name is not interchangeable with another. That single property is the whole difference.
Beyond ERC-20
Ethereum has introduced other token standards for different use cases:
- ERC-721: Non-fungible tokens (NFTs), where each token is unique
- ERC-1155: Multi-token standard that can handle both fungible and non-fungible tokens in one contract
ERC-20 remains the most widely used standard and is the foundation of the DeFi ecosystem.
This article is educational and is not financial advice.
Related Reading
- What Is a Smart Contract?
- What Is WETH?
- USDC Stablecoin Explained
- Crypto Scams: The 8 Types That Take the Most Money
- Crypto Wallets Explained
