ERC-20 Tokens: What They Are, How They Work, and What You Need to Know

When you hear about tokens like ERC-20 tokens, a technical standard for creating fungible tokens on the Ethereum blockchain. Also known as Ethereum token standard, it’s the reason you can trade thousands of coins on Uniswap, stake in DeFi protocols, or get airdrops from Web3 games. This isn’t just tech jargon—it’s the backbone of how most crypto projects move value on Ethereum. Without ERC-20, there’d be no Uniswap, no Aave, no SushiSwap. It’s the common language that lets wallets, exchanges, and apps talk to each other.

Think of ERC-20 like a universal plug. Just like your phone charger works with any outlet that follows the same shape, any wallet or exchange that supports ERC-20 can handle any token built to that standard. That’s why a token like FLOCK, a token used in two separate blockchain projects, or POUPE, a Solana-based meme coin that’s not an ERC-20 token, can’t be traded on Ethereum-based DEXes unless they’re built on Ethereum. ERC-20 tokens live on Ethereum. Other chains like Solana or Sui have their own standards—so a token like CUDIS, a Solana-based health-tracking token, doesn’t use ERC-20 at all. That’s why you can’t send it to a MetaMask wallet unless it’s wrapped or bridged.

ERC-20 isn’t perfect. It’s old. It’s been hacked. It’s why so many people lost money in scams—because anyone can create an ERC-20 token with a cool name and fake promises. You’ve seen it: tokens with $10 million market caps and zero trading volume, like VITAL, a dead crypto project with no activity. The standard doesn’t stop fraud—it just makes it easier to launch. But that’s also why it’s so powerful. It lets anyone build. No permission. No gatekeepers. Just code. That’s why you’ll find ERC-20 tokens in almost every post here—from DeFi protocols like Belt Finance, a cross-chain DeFi protocol that uses Ethereum-based tokens, to airdrops like OneRare, a food-themed Web3 game that issued ORARE tokens on Ethereum. These aren’t random examples. They’re all built on the same foundation.

What you’ll find below isn’t a list of the best ERC-20 tokens. It’s a collection of real stories about what happens when people use them—good, bad, and ugly. Some tokens rise. Most die. Some are scams. Others solve real problems. You’ll see how liquidation engines wipe out leveraged positions on ERC-20-based DeFi apps. You’ll learn why some exchanges refuse to list certain tokens. You’ll find out how account abstraction is changing how wallets interact with ERC-20 contracts. This isn’t theory. It’s what people actually deal with when they trade, stake, or airdrop these tokens every day.