Web3 & DApp Development Fundamentals · Lesson

The ERC-20 Standard

Token interface.

The ERC-20 Standard is a free Web3 & DApp Development Fundamentals lesson on CoddyKit — lesson 1 of 4. You can read the complete lesson below for free — then practise it hands-on in the browser with a built-in code editor and a 24/7 AI tutor. It is part of the Web3 & DApp Development Fundamentals learning path, one of 4 lessons in the course, and your progress syncs across the web and the CoddyKit app.

What Is ERC-20?

ERC-20 is the standard interface for fungible tokens on Ethereum. Fungible means every unit is identical and interchangeable, like currency.

Because all ERC-20 tokens share the same interface, wallets and exchanges can support any of them automatically.

The Required Functions

An ERC-20 token must implement six functions:

totalSupply()
balanceOf(account)
transfer(to, amount)
approve(spender, amount)
allowance(owner, spender)
transferFrom(from, to, amount)

The Two Events

ERC-20 also requires two events so wallets can track activity:

Transfer - fired on any token movement
Approval - fired when an allowance is set

<code>event Transfer(address indexed from, address indexed to, uint256 value);
event Approval(address indexed owner, address indexed spender, uint256 value);</code>

totalSupply and balanceOf

totalSupply() returns the total number of tokens in existence. balanceOf(account) returns how many tokens a given address holds.

<code>function totalSupply() external view returns (uint256);
function balanceOf(address account) external view returns (uint256);</code>

The Interface in Code

Solidity lets you declare the standard as an interface. Implementations inherit from it to guarantee compliance.

<code>interface IERC20 {
    function totalSupply() external view returns (uint256);
    function balanceOf(address) external view returns (uint256);
    function transfer(address to, uint256 amount) external returns (bool);
    function approve(address spender, uint256 amount) external returns (bool);
    function allowance(address owner, address spender) external view returns (uint256);
    function transferFrom(address from, address to, uint256 amount) external returns (bool);
}</code>

Optional Metadata

Three optional functions improve display: name(), symbol(), and decimals(). They are not required by the core standard but are expected by wallets.

<code>function name() external view returns (string memory);
function symbol() external view returns (string memory);
function decimals() external view returns (uint8);</code>

Understanding Decimals

The EVM has no fractions, so tokens use decimals to represent fractional amounts. Most tokens use 18 decimals, matching Ether.

So 1 token displayed equals 1 * 10**18 in raw units.

<code>uint8 public constant decimals = 18;
// 1 token = 1_000_000_000_000_000_000 base units</code>

Why a Standard Matters

Because ERC-20 defines a common shape, a wallet can display any token, a DEX can trade it, and a contract can integrate it without custom code. Interoperability is the whole point.

Return Values

The mutating functions transfer, approve, and transferFrom return a bool indicating success. Most modern implementations revert on failure rather than returning false.

<code>function transfer(address to, uint256 amount) external returns (bool);
// returns true on success; reverts on insufficient balance</code>

Using OpenZeppelin

In practice most developers do not write ERC-20 from scratch. They inherit the battle-tested OpenZeppelin implementation and just set the name, symbol, and initial supply.

<code>// import '@openzeppelin/contracts/token/ERC20/ERC20.sol';
// contract MyToken is ERC20 {
//     constructor() ERC20('MyToken', 'MTK') {
//         _mint(msg.sender, 1000 * 10 ** decimals());
//     }
// }</code>

The Allowance Mechanism

A defining ERC-20 feature is allowances: an owner can authorize a spender to move tokens on their behalf via approve and transferFrom. This powers DEXs and DeFi protocols.

You will explore this in detail later in the course.

Quick Check

Test your understanding of the ERC-20 standard.

Recap

You learned the ERC-20 standard:

It defines fungible tokens with a common interface
Six required functions plus Transfer and Approval events
Optional name, symbol, and decimals for display (usually 18 decimals)
Allowances enable delegated transfers
OpenZeppelin provides a safe ready-made implementation

Frequently asked questions

Is the “The ERC-20 Standard” lesson free?

Yes — the full text of “The ERC-20 Standard” is free to read here on the web, and the Web3 & DApp Development Fundamentals course includes 4 lessons in total. To practise it interactively (a built-in code editor and a 24/7 AI tutor) and unlock the rest of the Web3 & DApp Development Fundamentals course, upgrade to CoddyKit PRO.

What will I learn in “The ERC-20 Standard”?

Token interface. You practise Web3 & DApp Development Fundamentals with hands-on code you run directly in the browser, and a 24/7 AI tutor answers your questions as you work through the lesson.

Do I need any experience to start Web3 & DApp Development Fundamentals?

No prior experience is required. Web3 & DApp Development Fundamentals on CoddyKit is structured for beginners through advanced learners; this is — lesson 1 of 4, so you can start here or from the beginning and move at your own pace.

How long does the “The ERC-20 Standard” lesson take?

Most CoddyKit lessons take about 5–10 minutes. Each one is bite-sized and interactive, so you make steady progress and pick up exactly where you left off across the web and the app.

Can I write and run code in this Web3 & DApp Development Fundamentals lesson?

Yes. Every Web3 & DApp Development Fundamentals lesson includes a built-in code editor, so you write and run real code right in your browser and get instant AI feedback — no local setup required.

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