Eager to start with crypto? Join Nexo – the trusted institution for digital assets to easily buy, earn, and exchange crypto.Sign Up
ERC-20 tokens are digital assets created on the Ethereum blockchain.
A predefined set of rules called the ERC-20 standard dictates their behavior and compatibility with various platforms and wallets.
Before the ERC-20, exchanging one token for another was a challenge.
Each token adhered to its own rules, requiring additional efforts and custom solutions.
The ERC-20 standard introduction changed that for the better.
As it defined token creation, transfer, or use, the standard made token exchange significantly easier and more streamlined.
Imagine the standard as a common language that tokens speak, allowing them to seamlessly communicate and interact with different platforms, wallets, and applications.
What is more — tokenization took a leap forward with the introduction of the ERC-20 standard, allowing for digital representations of real-world assets.
Thousands of unique tokens now represent shares, real estate, and more.
Since anyone can create an ERC-20 token in minutes, many projects have turned out to be scams over the years. That’s why performing careful due diligence on their founders, token protocol, and roadmap is crucial.
Hint: It defines token protocol specifics - creation, transfer, use, etc.