What is the ERC-20 smart contract standard?

With the rise of crypto, the ERC-20 smart contract standard has become crucial in the Ethereum ecosystem, due to its applications in decentralized finance, governance, and more. So what is the ERC-20 token standard? Why is it important and relevant? How do you create an ERC-20 token?

What is a smart contract and how does it work?

A smart contract is programmed in a similar way. ERC-20 is one of the most widely-used standards for smart contracts on the Ethereum platform. The fact that nearly all Ethereum tokens are issued to the same standard brings vast benefits for users of the Ethereum ecosystem.

What is an ERC20 token?

An ERC20 token is a standard used for creating and issuing smart contracts on the Ethereum blockchain. Smart contracts can then be used to create smart property or tokenized assets that people can invest in. ERC stands for "Ethereum request for comment," and the ERC20 standard was implemented in 2015.

What is ERC 20 compliance?

Tokens often represent assets and rights that are external to a blockchain. Token, in the context of ERC-20 compliance, simply means a blockchain representation of something that meets the standards set by the Ethereum community to be considered a smart contract standard-compliant token. So, what does this all mean?