ERC-20 tokens are the backbone of the Ethereum ecosystem, serving as the standard for creating interoperable digital assets on its blockchain. This guide explores their features, top tokens, and why they dominate decentralized finance (DeFi).
Understanding ERC-20 Tokens
Definition and Purpose
ERC-20 tokens are fungible digital assets built on Ethereum’s blockchain using smart contracts. They adhere to a set of rules ensuring compatibility across wallets, exchanges, and dApps. Over 500,000 ERC-20 tokens exist today, powering projects from DeFi protocols to meme coins.
Key Features
- Fungibility: Each token is identical in value and functionality.
- Transferability: Tokens move seamlessly between Ethereum addresses.
- Fixed Supply: Developers cap token issuance to prevent inflation.
Top ERC-20 Tokens by Market Cap
1. Ethereum (ETH)
- Market Cap: $156.1B
- Role: Native currency for Ethereum’s smart contracts and dApps.
2. Shiba Inu (SHIB)
- Market Cap: $6.3B
- Unique Aspect: Meme coin with a DeFi ecosystem (ShibaSwap).
3. Wrapped Bitcoin (WBTC)
- Market Cap: $4.7B
- Function: Bridges Bitcoin liquidity to Ethereum’s DeFi apps.
4. Uniswap (UNI)
- Market Cap: $4.2B
- Utility: Governance token for the Uniswap DEX.
👉 Discover how to trade ERC-20 tokens safely
FAQs
Q: Are ERC-20 tokens only used for DeFi?
A: No—they also power NFTs, gaming assets, and governance systems.
Q: What’s the difference between ETH and ERC-20 tokens?
A: ETH is Ethereum’s native coin, while ERC-20 tokens are built atop its blockchain.
Q: How do I store ERC-20 tokens?
A: Use Ethereum-compatible wallets like MetaMask or Ledger.
Conclusion
ERC-20 tokens drive innovation in crypto, from DeFi to Web3. As Ethereum evolves, these tokens will remain pivotal—provided they adapt to emerging standards like ERC-721 (NFTs).