ERC-20 Token: What It Is, How It Works, and Why It Powers Most Crypto Projects

When you hold a coin like ERC-20 token, a standardized digital asset built on the Ethereum blockchain that enables interoperability across wallets and apps. Also known as Ethereum Request for Comment 20, it's not a currency itself—it's a rulebook that lets any project create its own token that works everywhere Ethereum does. Think of it like USB: whether you plug in a mouse, a drive, or a phone, they all use the same port because they follow the same standard. That’s what ERC-20 does for crypto—it makes tokens compatible with every wallet, exchange, and DeFi app on Ethereum.

Most of the coins you hear about—whether it’s a meme coin like Leslie (LESLIE), a low-cap memecoin on Ethereum that claims to support rhino conservation, or a DeFi governance token like vBNT, the token earned by staking BNT on Bancor that gives holders voting rights in a DAO—are built on ERC-20. That’s because it’s simple, reliable, and widely supported. You don’t need to build a new blockchain to launch a token. Just follow the ERC-20 rules: define the total supply, name, symbol, and how transfers work. Then it’s instantly usable on MetaMask, Uniswap, or any exchange that supports Ethereum.

But this simplicity comes with trade-offs. ERC-20 tokens rely on Ethereum’s network, so when gas fees spike, your transfers get slow and expensive. That’s why some projects moved to Solana or Sui, like Sudeng (HIPPO), a meme coin tied to a viral hippo that runs on Sui instead of Ethereum. Still, over 90% of new tokens today launch on ERC-20 because it’s the safest bet. It’s not flashy, but it’s the foundation. If you’re trading, staking, or just holding crypto, you’re almost certainly interacting with ERC-20 tokens—whether you know it or not.

Behind every ERC-20 token is a smart contract—a self-executing code that handles transfers, balances, and permissions. That’s why scams happen: if the contract has a backdoor, your tokens can be drained. That’s also why tools like ChainAware.ai (AWARE), an AI platform that predicts crypto scams by analyzing smart contract code exist. You need to know not just what a token does, but how it’s built.

The posts below cover real examples—what works, what doesn’t, and what to watch out for. From stablecoins to memecoins to governance tokens, every one of them runs on ERC-20. You’ll find deep dives into tokens that failed, ones that barely exist, and a few that actually deliver utility. No fluff. Just facts about what’s real, what’s risky, and why this standard still rules crypto.