# What Is the ERC-20 Standard for Tokens? ⎊ Path

**Published:** 2025-12-04
**Author:** Greeks.live
**Categories:** Path

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## What Is the ERC-20 Standard for Tokens?

ERC-20 is a technical standard used for smart contracts on the Ethereum blockchain for implementing fungible tokens. It defines a common set of rules, such as how tokens are transferred and how to access data about them.

Adhering to this standard ensures interoperability, meaning all ERC-20 tokens can interact seamlessly with other applications and wallets on the Ethereum network.

- [What Is the Function of the “Approve” Method in the ERC-20 Standard?](https://learn.greeks.live/path/what-is-the-function-of-the-approve-method-in-the-erc-20-standard/)

- [What Is the Key Advantage of a Tokenized Option Being an ERC-721 (NFT) versus an ERC-20?](https://learn.greeks.live/path/what-is-the-key-advantage-of-a-tokenized-option-being-an-erc-721-nft-versus-an-erc-20/)

- [In Options Trading, How Would a Fungible Token Option Be Settled versus a Non-Fungible Token Option?](https://learn.greeks.live/path/in-options-trading-how-would-a-fungible-token-option-be-settled-versus-a-non-fungible-token-option/)

- [How Do Different Token Standards Affect the Liquidity of an Asset?](https://learn.greeks.live/path/how-do-different-token-standards-affect-the-liquidity-of-an-asset/)

- [What Is the Primary Difference between Fungible and Non-Fungible Tokens in Finance?](https://learn.greeks.live/path/what-is-the-primary-difference-between-fungible-and-non-fungible-tokens-in-finance/)

- [How Does a Token Standard like ERC-20 Differ from ERC-721?](https://learn.greeks.live/path/how-does-a-token-standard-like-erc-20-differ-from-erc-721/)

- [What Is the Concept of a Semi-Fungible Token (SFT) and Its Financial Utility?](https://learn.greeks.live/path/what-is-the-concept-of-a-semi-fungible-token-sft-and-its-financial-utility/)

- [Can a Financial Derivative Be Considered Fungible?](https://learn.greeks.live/path/can-a-financial-derivative-be-considered-fungible/)

## Glossar

### [Non-Fungible Tokens](https://learn.greeks.live/area/non-fungible-tokens/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Token ⎊ Non-Fungible Tokens (NFTs) represent a paradigm shift in digital asset ownership, extending beyond traditional cryptocurrency fungibility.

### [ERC-20 Standard](https://learn.greeks.live/area/erc-20-standard/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Token ⎊ The ERC-20 standard, formally defined within Ethereum Improvement Proposal (EIP)-20, establishes a framework for fungible tokens on the Ethereum blockchain.

### [Ethereum Blockchain](https://learn.greeks.live/area/ethereum-blockchain/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Architecture ⎊ The Ethereum Blockchain represents a decentralized, open-source blockchain featuring smart contract functionality, fundamentally altering programmable money and decentralized application development.

### [Erc-20 Tokens](https://learn.greeks.live/area/erc-20-tokens/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Standard ⎊ ERC-20 tokens represent a technical standard implemented via smart contracts on the Ethereum blockchain, defining a common set of rules for fungible digital assets.

### [Erc-20](https://learn.greeks.live/area/erc-20/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Architecture ⎊ The ERC-20 standard defines a uniform API for fungible tokens on the Ethereum blockchain, facilitating interoperability between decentralized applications and exchanges.

### [Erc-20 Token](https://learn.greeks.live/area/erc-20-token/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Token ⎊ An ERC-20 token represents a fungible digital asset residing on the Ethereum blockchain, adhering to a standardized technical specification.

## Discover More

### [What Role Does Token Metadata Play in an ERC-721 Contract?](https://learn.greeks.live/path/what-role-does-token-metadata-play-in-an-erc-721-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Role Does Token Metadata Play in an ERC-721 Contract?](https://learn.greeks.live/wp-content/uploads/2025/10/Abstract-Visualization-of-Decentralized-Finance-Protocol-Layer-Zero-Mechanism-Execution-Flow.webp)

Metadata provides the descriptive information (image, traits, name) for the unique asset, referenced by a URI in the contract.

### [Why Is a 6-Block Confirmation Depth Considered the Standard for Bitcoin Transactions?](https://learn.greeks.live/path/why-is-a-6-block-confirmation-depth-considered-the-standard-for-bitcoin-transactions/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Is a 6-Block Confirmation Depth Considered the Standard for Bitcoin Transactions?](https://learn.greeks.live/wp-content/uploads/2025/10/Asymmetric-Volatility-Surface-Modeling-Utilizing-Digital-Asset-Hedging-Mechanisms-and-Perpetual-Futures-Settlement.webp)

Six confirmations balance security and finality time, as the cost of a successful chain reorg drops exponentially, making double-spend unfeasible.

### [Can ERC-1155 Be Used to Represent a Basket of Different Cryptocurrency Assets?](https://learn.greeks.live/path/can-erc-1155-be-used-to-represent-a-basket-of-different-cryptocurrency-assets/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Can ERC-1155 Be Used to Represent a Basket of Different Cryptocurrency Assets?](https://learn.greeks.live/wp-content/uploads/2025/10/Exploded-View-Analysis-of-Decentralized-Autonomous-Organization-Governance-Mechanism-Actuator-Dynamics.webp)

ERC-1155 can represent a tokenized index fund by having one token ID symbolize a share in a basket of assets.

### [What Regulations Apply to Security Tokens?](https://learn.greeks.live/path/what-regulations-apply-to-security-tokens/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Regulations Apply to Security Tokens?](https://learn.greeks.live/wp-content/uploads/2025/10/Cryptocurrency-Derivative-Mechanism-Disassembly-Revealing-Atomic-Swap-Settlement-Infrastructure.webp)

Security tokens are governed by the same strict rules as stocks and bonds.

### [What Is a "Confirmation Depth" and What Is a Common Industry Standard?](https://learn.greeks.live/path/what-is-a-confirmation-depth-and-what-is-a-common-industry-standard/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a "Confirmation Depth" and What Is a Common Industry Standard?](https://learn.greeks.live/wp-content/uploads/2025/10/Modular-Architecture-of-Layered-Decentralized-Exchange-Asset-Structures-Comprising-Tiers.webp)

The count of blocks mined after a transaction's block; six confirmations is a widely accepted security standard.

### [What Is the Difference between Impermanent Loss and a Standard Market Loss on a Held Asset?](https://learn.greeks.live/path/what-is-the-difference-between-impermanent-loss-and-a-standard-market-loss-on-a-held-asset/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Difference between Impermanent Loss and a Standard Market Loss on a Held Asset?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Ledger-Tokenization-Construct-Bifurcation-High-Frequency-Arbitrage-Mechanism-Visualization.webp)

Market loss is direct value reduction; IL is an opportunity cost relative to a simple hold strategy due to ratio divergence.

### [What Is a Use Case for ERC-1155 in Tokenized Options Trading?](https://learn.greeks.live/path/what-is-a-use-case-for-erc-1155-in-tokenized-options-trading/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a Use Case for ERC-1155 in Tokenized Options Trading?](https://learn.greeks.live/wp-content/uploads/2025/10/Segmented-Biphasic-Pharmaceutical-Casing-Represents-Asymmetric-Risk-In-Decentralized-Finance-Options-Pricing.webp)

ERC-1155 can manage both fungible option contracts and unique collateral within one contract, streamlining the creation and settlement of derivatives.

### [When Is a Stop-Limit Order Preferred over a Standard Stop-Loss Order?](https://learn.greeks.live/path/when-is-a-stop-limit-order-preferred-over-a-standard-stop-loss-order/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![When Is a Stop-Limit Order Preferred over a Standard Stop-Loss Order?](https://learn.greeks.live/wp-content/uploads/2025/10/Geometric-Abstraction-Modeling-Volatility-Surface-Dynamics-in-Decentralized-Derivative-Structures.webp)

It is preferred when guaranteeing the execution price is more important than guaranteeing the execution itself, especially in low-liquidity conditions.

### [How Is the Uniqueness of an ERC-721 Token Enforced on the Blockchain?](https://learn.greeks.live/path/how-is-the-uniqueness-of-an-erc-721-token-enforced-on-the-blockchain/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Is the Uniqueness of an ERC-721 Token Enforced on the Blockchain?](https://learn.greeks.live/wp-content/uploads/2025/10/Streamlined-Token-Structure-Encapsulating-Digital-Asset-Volatility-Premium-Derivations-Across-Exchanges.webp)

Each token has a mandatory, distinct, and immutable tokenId which, combined with the contract address, ensures global uniqueness.

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