ERC-20 is the technical standard most tokens on Ethereum follow, setting the functions every token must offer so wallets and apps can handle them alike. For buyers, it points to the network: an ERC-20 token is received at an Ethereum address, and moving it later needs a little ETH to pay the network fee, called gas.
How does ERC-20 work?
ERC-20 is the shared rulebook for Ethereum tokens, set out in EIP-20 in November 2015. Each token is a smart contract that records addresses and balances. Every token must let you check balances, send tokens and let an app spend them for you up to a set limit. Moving a token is an Ethereum transaction, and its fee, called gas, is paid in ETH.
What is an example of an ERC-20 token?
USDC on Ethereum, the stablecoin issued by Circle, is one. Say you send 50 USDC to a friend: your wallet asks the USDC contract to move 50 from your balance to theirs. The gas is paid in ETH, so a wallet with USDC but no ETH cannot send it.
Why does ERC-20 matter when you buy crypto?
It tells you which network a token uses. Many tokens exist on several networks: Tether issues USDT on Ethereum, TRON and others (as of September 2026). A token sent on one network does not arrive on another. Crypto is delivered to the wallet address you provide, so check the network before you place an order, and keep a little ETH to move tokens later. See the Ethereum price and payment options.
How is ERC-20 different from TRC-20?
TRC-20 is TRON’s token standard. It works like ERC-20 but runs on a separate network.
| Feature | ERC-20 | TRC-20 |
|---|---|---|
| Network | Ethereum | TRON |
| Network fee | Gas, paid in ETH | Bandwidth and energy, or TRX burned |
| Address | 42 characters, starts with 0x | 34 characters, starts with T |
What are the risks and red flags?
- Copycat tokens: anyone can create a token with any name. Check the contract address on the issuer’s website.
- Unlimited approvals: an app you let spend a token can drain it if it turns malicious. Revoke approvals you no longer need.
- Wrong destination: tokens sent to a contract that cannot handle them can be lost: at least $83 million worth as of June 2024, according to ethereum.org. Blockchain transactions cannot be reversed.
- No quality stamp: ERC-20 describes how a token works, not whether it has value.
Go deeper: What is Ethereum?
