ERC-20

Overview

ERC-20 defines a common application interface for fungible tokens on Ethereum-compatible environments. Core functions cover total supply, account balances, direct transfers, delegated transfers, and allowances, while Transfer and Approval events support wallet and indexer workflows. The standard improves interoperability because software can call familiar methods across many token contracts.

Allowances let a holder authorize another address or contract to spend tokens through token approval. This is essential for exchanges, payment routers, and lending applications, but broad or unlimited allowances remain active until changed and can be abused if the spender is compromised. Applications should request the smallest practical amount and help users review or revoke stale approvals.

Shared interfaces do not create shared behavior. Some ERC-20 contracts charge transfer fees, return unusual values, rebase balances, restrict addresses, pause movement, or use upgradeable proxies. A transfer request for 100 units may produce a smaller recipient balance, and a successful transaction can still represent the wrong contract. Safe integrations use compatible transfer libraries and verify the actual post-execution state.

Token identity is the chain and token contract address, not the name or symbol. Decimals affect display and amount conversion but do not establish precision, quality, or value. Deposit systems should maintain a controlled asset registry, reject unrecognized contracts, and interpret events together with successful canonical execution.

Before production support, teams should test deposits, payouts, refunds, allowance changes, zero and boundary amounts, fee behavior, restricted addresses, proxy upgrades, and failure responses. Monitoring should cover administrator-role changes, mint and burn events, pauses, blacklists, and implementation upgrades that alter previously tested assumptions.

ERC-20 is therefore a compatibility baseline rather than a certification. Economic review still needs issuer, supply, liquidity, redemption, governance, and legal context, while technical review focuses on the deployed bytecode, privileged roles, and observed transfer behavior.