Ethereum Fundamentals
What is an ERC-20 Token?
The complete beginner's guide to Ethereum's most important token standard - what it is, how it works, and how to create your own.
ERC-20 is the standard interface for fungible tokens on the Ethereum blockchain. It defines a common set of rules that any token must follow, allowing wallets, exchanges, and DeFi protocols to support every ERC-20 token automatically - without custom code for each one.
In this guide
What Does Fungible Mean?
A fungible asset is one where every unit is identical and interchangeable. A £10 note is fungible - your £10 and my £10 are exactly the same. One Bitcoin is fungible with another Bitcoin.
ERC-20 tokens follow this model. If you hold 100 units of a token, each unit is worth the same as any other unit of that token. This makes ERC-20 the right standard for currencies, rewards points, voting power, stablecoins, and any asset where uniformity matters.
Compare this with ERC-721 (NFTs), where each token is unique - a digital artwork token is not interchangeable with another artwork token.
How ERC-20 Works
When you deploy an ERC-20 token, you're deploying a smart contract to the Ethereum blockchain. That contract keeps a ledger of who holds how many tokens. The ERC-20 standard requires every contract to implement a specific set of functions:
| Function | What it does |
|---|---|
totalSupply() | Returns the total number of tokens in existence |
balanceOf(address) | Returns how many tokens a given address holds |
transfer(to, amount) | Sends tokens from the caller's address to another address |
approve(spender, amount) | Allows a third party (e.g. a DEX) to spend tokens on your behalf |
transferFrom(from, to, amount) | Moves tokens on behalf of an approved address |
allowance(owner, spender) | Returns the remaining approved spend amount |
Because every ERC-20 token implements these same functions, any wallet (MetaMask, Phantom, Coinbase Wallet) and any DEX (Uniswap, SushiSwap) can interact with your token without any bespoke integration work.
What ERC-20 Tokens Are Used For
Currency & Payments
Create a digital currency for your community, app, or platform.
Meme Tokens
Meme coins like SHIB and PEPE are ERC-20 tokens. Simple to launch, community-driven.
Governance Tokens
Let holders vote on protocol decisions. One token, one vote.
Loyalty & Rewards
Issue points to customers or users that can be redeemed for perks.
Staking Tokens
Tokens that users lock up to earn yield or access services.
Stablecoins
USDC and USDT are both ERC-20 tokens pegged to the US dollar.
Well-Known ERC-20 Tokens
Some of the largest tokens in the world by market capitalisation are ERC-20 tokens. You can look up any ERC-20 token's details using our free ERC-20 token lookup tool.
| Token | Symbol | Use Case |
|---|---|---|
| USD Coin | USDC | Stablecoin pegged to USD |
| Tether | USDT | Stablecoin pegged to USD |
| Chainlink | LINK | Oracle network utility token |
| Uniswap | UNI | Governance token for the Uniswap DEX |
| Shiba Inu | SHIB | Meme token / community currency |
| Wrapped Bitcoin | WBTC | Bitcoin on Ethereum, ERC-20 compatible |
How to Create Your Own ERC-20 Token
Traditionally, creating an ERC-20 token required Solidity knowledge, a development environment, and understanding of Ethereum's deployment process. With ETHTokenLaunch, the technical work is handled for you. Read the full step-by-step ERC-20 creation guide for a detailed walkthrough.
Connect your wallet
Connect MetaMask or Phantom. Make sure you have enough ETH for our fee plus gas.
Fill in your token details
Choose your token name, symbol (ticker), total supply, and decimal places.
Pay the deployment fee
A small flat fee covers our gas and server costs. The fee is shown before you confirm.
Receive your contract
Within 60 seconds your ERC-20 token is live on Ethereum. You get the contract address and Etherscan link.
Ready to launch your token?
Deploy your ERC-20 token on Ethereum in under a minute. No coding required.