What are ERC20 Tokens
The ERC20 standard is basically a specific set of functions which developers must use in their tokens to make them ERC20 compliant. While this is not an enforced rule, most DAPP developers are encouraged to follow the standards to ensure that their tokens can undergo interactions with various wallets, exchanges and smart contracts without any issues. This was great news for everyone because now they at least had an idea of how future tokens are expected to behave. ERC20 tokens have gotten widespread approval and most of the DAPPS sold on ICO’s have tokens based on the ERC20 standard.
So, what does a token need to have to be ERC20 compliant? It is basically a set of 6 functions that can be recognized and identified by other smart contracts, which in turn leads to seamless interactions. When executed, the following 4 basic activities are what all the ERC20 tokens required to do:
- Get the total token supply.
- Get the account balance.
- Transfer the token from one party to another.
- Approve the use of token as a monetary asset.