The ERC-20 standard in the Ethereum ecosystem is a set of techniques and instructions for creating tokens, supporting smart-contracts and decentralized applications. Its introduction facilitated the process of developing new cryptocurrencies in Ethereum blockchain network, provided some unification of tokens while preserving their individual functions and tasks laid down by developers.
It’ll be told what the ERC-20 standard for tokens is, what features and advantages it gives them.
What are ERC-20 tokens
ERC-20 sets the methodology for generating, transferring tokens, confirming transactions, and executing smart contracts. The standard coordinates the operation of all "ether-like" cryptocurrencies, placed even in different smart chains. Such tokens are traded by users in the same manner as other types of cryptocurrencies, but with a few conditions:
- transactions are not processed in a separate blockchain, but within the Ethereum network, which promotes compatibility of all types of ERC-20 tokens;
- tokens are fully controlled by their owners, up to the possibility of their voluntary burning;
- token-contracts are easy to track: it is possible to determine who has and how many tokens with information about the transaction, but without the owners' personal data.
Since every token issued in the ERC-20 format is a sub-currency of the Ethereum ecosystem, transaction fees are charged in ether, or more precisely, in gas, which is used as a unit of cost accounting when calculating transactions.
Features and advantages of ERC-20 tokens
When generating new tokens according to the ERC-20 standard, their developers consider at least 9 parameters, 6 of which are required:
- TotalSupply shows how many tokens there are in the contract.
- BalanceOf shows the balance of tokens for a particular specified address.
- Transfer transfers tokens from one address to another.
- TransferFrom is an extended alternative to Transfer parameter, organizes automatic payments: for example, for subscriptions.
- Approve limits the number of tokens withdrawn from the balance as part of the execution of a smart contract.
- Allowance expands the capabilities of Approve in terms of controlling the number of tokens to be withdrawn.
The advantages of ERC-20 tokens are directly derived from the features of this standard:
- interchangeability: cross-chain exchange of ERC-20 tokens preserves not only their value, but also their functional purpose;
- adaptability: ERC-20 makes it possible to create universal instruments, not only payment ones;
- adjustability: token restriction and burning functions help to influence the tokens value avoiding inflation;
- popularity: ERC-20 is one of the most popular standards, a lot of exchanges and wallets are compatible with it.
AKRA token's compliance with the ERC-20 standard has ensured its correct operation on all EVM supporting wallets. This development environment made it possible to generate a multifunctional, vulnerability-proof cryptocurrency, which can then be extended to other ecosystems or even transferred to its own blockchain.
