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ERC-20 refers to the token standard of the Ethereum (ETH) network. Several tokens have adopted the versatile standard and the cryptocurrency market is replete with ERC-20 tokens. More popular ones includes Basic Attention Token (BAT), Maker (MKR), Augur (REP), OmiseGO (OMG) and Ziliqa (ZIL). Tens of thousands of ERC-20 tokens exist on the Ethereum mainnet.
ERC-20 tokens do not have their own blockchain, instead running on the Ethereum mainnet. When a token is referred to as an ERC-20 token, what is actually being referred to is the fact that the tokens follow the ERC-20 protocol standard. This protocol is a set of rules and communication standards that enables the use of smart contracts. To a degree, this standard lays a common foundation for these tokens, which allows for multiple tokens to run on the Ethereum network. Without going too much into detail, the ERC-20 standard defines six different mandatory functions within the Ethereum ecosystem, and three optional ones.
The benefits of having a common standard include better smart contract security, a commonality in the tech, and quicker and more convenient token implementation.
The proliferation of the ERC-20 standard has led to the creation of other standards, such as TRON’s TRC 10 and TRC 20 standards. Each comes with its own rules that have been adapted to suit its network.
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