ERC-20 Tokens Explained: What They Are, How They Work, and Why They Matter

When you hear about ERC-20, a technical standard for creating tokens on the Ethereum blockchain. Also known as Ethereum Request for Comments 20, it’s the reason you can send $WETH, $WPAY, or $TCAT without needing a new blockchain for each one. Think of it like a universal plug—any device that fits can use the same outlet. ERC-20 lets developers build tokens that work everywhere Ethereum does: wallets, exchanges, DeFi apps. You don’t need to learn a new system for every coin. That’s why over 90% of tokens on Ethereum follow this rule.

It’s not magic. ERC-20 defines six basic functions: how many tokens exist, who owns what, how to transfer them, how to check balances, and how to approve spending. That’s it. No fancy graphics, no hidden code. Just clean, predictable rules. That’s why projects like WPAY, Wirex’s utility token built on Polygon, which is Ethereum-compatible and TCAT, a token labeled a "zombie token" but still built on ERC-20 can list on Binance, Coinbase, or MetaMask without rewriting their code. Even if the token itself is dead or sketchy, the standard keeps it playable in the ecosystem.

But here’s the catch: being ERC-20 doesn’t make a token good. It just makes it compatible. You’ll find real projects like $WPAY with clear use cases, and you’ll find junk like $TADDY or $SC—tokens with no real value, no team, no roadmap. The standard doesn’t care. It just moves the numbers. That’s why so many scams use ERC-20. They don’t need to build a whole chain. Just create a token, dump it on a DEX, and run. That’s why you need to look beyond the label. Check the contract. See the liquidity. Read the docs. ERC-20 is the foundation, not the guarantee.

And it’s not just about trading. ERC-20 tokens power staking, governance, airdrops, and NFT marketplaces. The BNC airdrop, Bifrost’s token claim for stakers on Ethereum-compatible chains, and the PAINT token, MurAll’s reward for artists using blockchain both rely on ERC-20 to distribute value. Even if the project is on Solana or Berachain, the token often starts as an ERC-20 version first. It’s the lingua franca of crypto.

So when you see a new coin, ask: Is this ERC-20? Not because it’s safe, but because it’s predictable. If it doesn’t follow the standard, you’re dealing with something exotic—and risky. If it does, you know how to interact with it. You know where to send it. You know how to check its balance. That’s power. That’s control. And in crypto, that’s half the battle.

Below, you’ll find real breakdowns of tokens built on this standard—some alive, some dead, some scams, some quietly useful. No hype. Just facts. You’ll learn how to spot the difference, how to claim what’s real, and why most of them still run on the same old rulebook: ERC-20.