Overview
ERC-20 is the most famous and widely used token standard in the world. It defines a set of rules that allow tokens on Ethereum to be compatible with each other and with external services like wallets and exchanges.
Key Functions
transfer: Sending tokens from one address to another.balanceOf: Checking the token balance of an address.approve: Allowing a smart contract to spend tokens on your behalf (essential for DeFi).
Impact
By providing a common 'language' for tokens, ERC-20 enabled the ICO boom and the birth of the DeFi ecosystem.