What Is ERC20?

ERC20 is the token standard that defines how fungible tokens behave on Ethereum and on every EVM compatible network. It is not a piece of software but a specification: a short list of functions and events that a smart contract must implement so wallets, exchanges and other contracts can interact with the token without needing to know anything else about it.

What the Standard Defines

The standard requires six functions and two events. totalSupply reports how many tokens exist. balanceOf returns the balance of an address. transfer moves tokens between addresses. approve and allowance let a user authorize a contract to spend on their behalf, which is the mechanism that makes decentralized exchanges possible at all. transferFrom executes that delegated spend. Because every ERC20 token exposes the same interface, a wallet that supports one supports all of them without any extra work.

ERC20 and Other Token Standards

ERC20 covers fungible tokens, where every unit is interchangeable with every other. ERC721 covers non-fungible tokens, where each one is unique. Outside the EVM the equivalents work differently: Solana uses the SPL token program, which handles token accounts at the protocol level rather than through a separate contract per token. The practical consequence is that an ERC20 token cannot simply move to Solana, it has to be bridged and reissued.

Creating an ERC20 Token

Deploying one means writing or reusing a contract that implements the interface, setting the supply, decimals, name and symbol, then publishing it on chain. The tokenomics decisions, how much to mint and who receives it, matter far more than the code itself, which is close to boilerplate at this point. If you would rather not write Solidity, you can deploy one with Smithii’s Token Creator on Ethereum.

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