How Are Tokens Created on an Existing Blockchain like Ethereum?

Tokens are created on blockchains like Ethereum by deploying a smart contract. This contract defines the token's properties, such as its name, symbol, total supply, and rules for transfer, following a specific standard like ERC-20.

The ERC-20 standard provides a common set of functions that all tokens on the network can share, ensuring interoperability. Once the smart contract is deployed to the blockchain, it manages the token's issuance and tracks the balance of all token holders automatically and transparently.