ERC-20 tokens are a type of fungible token standard on the Ethereum blockchain. The term "ERC" stands for "Ethereum Request for Comments," and "20" is the unique identifier for this specific proposal. ERC-20 tokens are widely used for various applications, including Initial Coin Offerings (ICOs), decentralized finance (DeFi) projects, and as utility tokens within decentralized applications (dApps).

1. **Key Features of ERC-20 Tokens**

• Fungibility: Each ERC-20 token is identical and interchangeable with another token of the same type, making them fungible.
• Standardization: ERC-20 provides a standard interface for tokens, allowing developers to create and interact with tokens in a predictable manner.
• Interoperability: ERC-20 tokens can be easily integrated into various wallets, exchanges, and dApps due to their standardized nature.

2. **Common Functions of ERC-20 Tokens**

• totalSupply: Returns the total supply of the token.
• balanceOf: Returns the balance of a specific address.
• transfer: Transfers a specified amount of tokens from the sender's address to a recipient's address.
• approve: Allows a spender to withdraw tokens from the sender's account, up to a specified amount.
• transferFrom: Transfers tokens from one address to another, using the allowance set by the approve function.
• allowance: Returns the amount of tokens that a spender is allowed to withdraw from a sender's account.

3. **Sample Code: An ERC-20 Token Implementation**

Below is a simple implementation of an ERC-20 token in Solidity:

solidity
// SPDX-License-Identifier: MIT
pragma solidity ^0.8.0;

contract MyToken {
    string public name = "MyToken";
    string public symbol = "MTK";
    uint8 public decimals = 18;
    uint256 public totalSupply;

    mapping(address => uint256) public balanceOf;
    mapping(address => mapping(address => uint256)) public allowance;

    event Transfer(address indexed from, address indexed to, uint256 value);
    event Approval(address indexed owner, address indexed spender, uint256 value);

    constructor(uint256 initialSupply) {
        totalSupply = initialSupply * (10 ** uint256(decimals));
        balanceOf[msg.sender] = totalSupply; // Assign the total supply to the contract's creator
    }

    function transfer(address _to, uint256 _value) public returns (bool success) {
        require(balanceOf[msg.sender] >= _value, "Insufficient balance");
        balanceOf[msg.sender] -= _value;
        balanceOf[_to] += _value;
        emit Transfer(msg.sender, _to, _value);
        return true;
    }

    function approve(address _spender, uint256 _value) public returns (bool success) {
        allowance[msg.sender][_spender] = _value;
        emit Approval(msg.sender, _spender, _value);
        return true;
    }

    function transferFrom(address _from, address _to, uint256 _value) public returns (bool success) {
        require(balanceOf[_from] >= _value, "Insufficient balance");
        require(allowance[_from][msg.sender] >= _value, "Allowance exceeded");

        balanceOf[_from] -= _value;
        balanceOf[_to] += _value;
        allowance[_from][msg.sender] -= _value;
        emit Transfer(_from, _to, _value);
        return true;
    }
}

This MyToken contract implements the basic ERC-20 functionalities:

• Constructor: Initializes the token with a specified total supply and assigns it to the contract creator.
• transfer: Allows users to transfer tokens to another address.
• approve: Allows users to set an allowance for a spender.
• transferFrom: Enables a spender to transfer tokens on behalf of the owner, up to the approved amount.

4. **Use Cases

ERC-20 tokens have a wide range of use cases, including:

• Initial Coin Offerings (ICOs): Many projects use ERC-20 tokens to raise funds through ICOs, allowing investors to purchase tokens in exchange for Ether or other cryptocurrencies.
• Decentralized Finance (DeFi): ERC-20 tokens are commonly used in DeFi applications for lending, borrowing, and trading, providing liquidity and enabling various financial services.
• Utility Tokens: Many dApps utilize ERC-20 tokens as utility tokens, granting users access to specific features or services within the application.

5. **Conclusion**

ERC-20 tokens are a fundamental part of the Ethereum ecosystem, providing a standardized way to create and manage fungible tokens. Their versatility and interoperability have made them a popular choice for developers and projects across various sectors in the blockchain space.