ERC-20 is the Ethereum token standard for fungible tokens.
The standard specifies a common set of functions and events that compatible tokens can implement. These include checking balances, transferring tokens, approving another account to spend tokens, and recording allowances. Because wallets and exchanges can recognize the interface, many different tokens can work with shared infrastructure.
ERC-20 tokens are fungible: one unit of a particular token is interchangeable with another unit of the same token. This differs from ERC-721, which is associated with non-fungible tokens, where individual items are distinct.
ERC-20 does not create one universal currency. It defines rules for tokens issued through Ethereum smart contracts. The token’s supply, name, purpose, and administration depend on the contract that implements the standard.