ERC-20 tokens

What are ERC-20 Tokens?

Tokens designated as ERC-20 stand for Ethereum Request for Comment 20. They are fungible token sets that are part of the Ethereum blockchain. In this context, the term "fungible" refers to a token's ability to be exchanged for other ERC-20 tokens rather than non-fungible tokens, or NFTs. These distinctive tokens serve to demonstrate ownership of digital assets.

These digital tokens are developed according to the ERC-20 standard so they can interact with one another. Tokens that adhere to the ERC-20 standard must comply with rules governing the use of smart contracts, the approval of transactions, and the transfer of tokens.

Despite being the primary currency of the Ethereum blockchain, Ether (ETH), cannot directly interact with other ERC-20 tokens since it is not ERC-20 compliant. Wrapped Ether (wETH) was developed as a remedy to permit ETH owners to conduct transactions with ERC-20 cryptocurrency tokens directly on the network.