How it works
It defines common functions for balances, transfers, allowances and token supply so applications can integrate tokens using a shared interface.
What to check
Check the contract address, decimals and any additional issuer controls such as pausing, minting or freezing. Those controls are outside the minimal idea of a fungible token.
- Verify contract address
- Inspect issuer controls
- Separate standard from investment quality
Limits and risks
An ERC-20 label says little about economic quality. Tokens can still be centrally controlled, illiquid, unaudited or fraudulent.
Primary sources
Bitcoin Developer Reference↗Ethereum developer documentation↗FATF: Virtual Assets↗General information only. Investment products can lose value, and terms, fees and regulation can change.