The rise of blockchain technology has transformed how digital assets are created, transferred, and stored. At the heart of this evolution lies the ERC20 token standard, a foundational protocol that powers thousands of cryptocurrencies on the Ethereum network. Whether you're new to crypto or expanding your portfolio, understanding ERC20 tokens is essential for navigating today’s decentralized ecosystem.
What Is the ERC20 Standard?
ERC20 is a technical specification for smart contracts on the Ethereum blockchain. It defines a set of rules that tokens must follow to ensure compatibility across wallets, exchanges, and decentralized applications (dApps). This standardization has dramatically lowered the barrier to entry for launching new cryptocurrencies, enabling startups and developers to create and distribute tokens efficiently.
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Technically, the ERC20 standard includes six mandatory functions and three optional ones:
Mandatory Functions:
totalSupply: Returns the total token supply.balanceOf: Checks an address's token balance.transfer: Sends tokens from one address to another.transferFrom: Allows third-party transfers (e.g., via exchanges).approve: Authorizes another address to spend tokens.allowance: Checks how many tokens an address can spend on behalf of another.
Optional Parameters:
- Token name (e.g., "ChainLink")
- Symbol (e.g., "LINK")
- Decimal precision (up to 18 decimals, like Ether)
These standardized rules ensure seamless interoperability. For example, any ERC20-compliant wallet can recognize and manage any ERC20 token without custom integration.
While deeper technical details are available through external resources, our focus here remains on practical use cases—how to store, buy, and transfer these widely used digital assets.
Best ERC20 Token Wallet: MyEtherWallet
When it comes to storing ERC20 tokens securely, MyEtherWallet (MEW) stands out as one of the most trusted and user-friendly options. As a non-custodial, web-based wallet, MEW allows full control over private keys while supporting all ERC20 tokens by default.
Since ERC20 tokens operate on the Ethereum blockchain, they rely on Ethereum’s infrastructure—even though they represent separate projects. This means your MEW wallet can hold not only ETH but also any compatible token like LINK, USDT (ERC20 version), or MKR.
However, security is paramount. Always follow best practices:
- Never share your private key or seed phrase.
- Use hardware wallets like Ledger Nano S in combination with MEW for maximum protection.
- Double-check URLs to avoid phishing sites.
For step-by-step guidance on setting up MEW and managing ERC20 tokens safely, consider reviewing verified tutorials. Remember: in crypto, you are your own bank—responsibility lies entirely with you.
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How to Buy ERC20 Tokens
Purchasing ERC20 tokens typically involves using cryptocurrency exchanges. While some platforms list them directly, others require trading pairs involving Bitcoin (BTC), Ethereum (ETH), or stablecoins like USDT or DAI.
Here’s a simple process:
- Choose a reputable exchange that supports the token you want.
- Check trading volume on sites like CoinMarketCap to find the most liquid markets.
- Fund your account—usually with BTC, ETH, or fiat currency.
- Place your trade using the appropriate trading pair.
Popular centralized exchanges such as Binance, Coinbase, and Kraken offer numerous ERC20 tokens. However, decentralized exchanges (DEXs) like IDEX specialize exclusively in ERC20 assets and often list new tokens before they appear elsewhere.
Notably, IDEX operates solely with ETH-based pairs, making it ideal for early access to emerging projects. Pairing IDEX with MyEtherWallet and a hardware wallet enhances both security and functionality.
Pro Tip: Always verify whether a token is still ERC20-based before buying. Some major projects have migrated to their own blockchains and no longer operate on Ethereum.
Frequently Asked Questions
Q: Are all tokens on Ethereum ERC20?
A: No. While ERC20 is the most common standard, others like ERC721 (for NFTs) and ERC1155 (multi-token standard) exist. Always confirm the token type before transferring.
Q: Do I need ETH to send ERC20 tokens?
A: Yes. Every transaction on the Ethereum network requires gas paid in ETH. Without ETH in your wallet, you cannot move ERC20 tokens.
Q: Can I lose my tokens if I send them incorrectly?
A: Unfortunately, yes. Sending tokens to incompatible networks (e.g., sending an ERC20 token to a BEP2 address) may result in permanent loss. Always double-check addresses and network compatibility.
How to Send ERC20 Tokens
Transferring ERC20 tokens—whether from an exchange to your wallet or between personal wallets—follows a straightforward process:
- Open your wallet (e.g., MyEtherWallet).
- Locate the "Send" function.
- Select the correct token from your balance.
- Enter the recipient’s Ethereum address.
- Set gas fee (in Gwei) based on network congestion.
- Confirm the transaction.
One common challenge users face is adding custom tokens not listed by default in MEW. To do so:
- Click “Add Custom Token”
- Input the token contract address
- Specify symbol and decimal count
- Save
Once added, the token will appear in your balance and become transferable.
Understanding gas and Gwei is crucial for smooth transactions. Gas refers to the computational effort required; Gwei is the unit price of gas (1 Gwei = 0.000000001 ETH). High network traffic increases gas prices—check current rates via tools like Etherscan Gas Tracker.
Complete List of Major ERC20 Tokens
Thousands of projects have launched as ERC20 tokens. While many remain on Ethereum, others have transitioned to independent blockchains after launching their mainnet.
Below is a curated list of notable ERC20-based or formerly ERC20-based projects:
- ChainLink (LINK) – Oracle network connecting smart contracts to real-world data.
- Maker (MKR) – Governance token for the MakerDAO decentralized finance (DeFi) platform.
- OmiseGO (OMG) – Focused on financial inclusion and payment solutions.
- VeChain Thor (VET) – Supply chain tracking and anti-counterfeiting.
- TRON (TRX) – Decentralized entertainment and content-sharing platform.
- 0x (ZRX) – Protocol enabling peer-to-peer token trades.
- Golem (GNT) – Decentralized computing power marketplace.
- Aeternity (AE) – High-performance blockchain for smart contracts.
- ICON (ICX) – Interconnected blockchain network.
- Bytom (BTM) – Asset registration and cross-chain interaction.
Note: Projects like Binance Coin (BNB), EOS, and Zilliqa have migrated off Ethereum and now run on their own blockchains. They are no longer ERC20 tokens.
Final Thoughts
ERC20 has revolutionized token creation and distribution, serving as the backbone for countless innovations in DeFi, NFTs, and Web3. Its simplicity and reliability continue to make it a go-to standard for developers worldwide.
Whether you're investing in emerging projects or building your own dApp, familiarity with ERC20 mechanics—from storage to transactions—is indispensable.
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