ERC-20 Token: What It Is, How It Works, and Why It Powers Most Crypto

When you buy a crypto token on Ethereum, chances are it’s an ERC-20 token, a technical standard for fungible tokens built on the Ethereum blockchain that lets different apps talk to each other. Also known as Ethereum Request for Comment 20, it’s the reason you can trade dozens of coins on Uniswap, stake rewards in Aave, or swap tokens without needing a new wallet for each one. Without ERC-20, DeFi as we know it wouldn’t exist.

Think of ERC-20 like a universal plug for crypto. Just like your phone charger works with any device that uses USB-C, any Ethereum wallet, exchange, or DeFi app can handle an ERC-20 token because they all follow the same rules. These rules define how tokens are created, transferred, and tracked—things like total supply, who owns what, and how much you can send. That’s why tokens like CRV, Curve DAO Token used for governance and yield in stablecoin trading, or MIST, a token for an NFT-based RPG game on Ethereum can show up in your MetaMask and work instantly. They don’t need special code—they just plug in.

But not all ERC-20 tokens are equal. Some, like CRV, have real utility and active communities. Others, like BULEI or BABYKEKIUS, are low-liquidity memes with no team or roadmap. The standard doesn’t guarantee safety—it just makes trading possible. That’s why you’ll see posts here about ERC-20 tokens that warn you about scams, explain token ratios in liquidity pools, or break down how airdrops like ZERC work. They all use the same foundation, but the risks and rewards? Totally different.

ERC-20 also connects to bigger ideas. It’s the reason blockchain can track property titles, music royalties, or supply chain data using tokens. It’s why you can swap tokens across chains using tools like Chainflip. And it’s why regulators now care about token classification—because if it’s an ERC-20, it’s often treated as a security or commodity under MiCA or other laws. You don’t need to code it to use it, but knowing how it works helps you avoid traps and spot real opportunities.

Below, you’ll find real examples of ERC-20 tokens in action—from the serious to the sketchy. Some are built for long-term use. Others are gambling with your money. All of them rely on the same invisible system. Knowing what ERC-20 is won’t make you rich. But it’ll keep you from losing money on something that shouldn’t even exist.