ERC-20

What does ERC-20 mean? It is the acronym for the technical standard of Ethereum smart contracts. The acronym stands for “Ethereum Request for Comments”, which originally indicated the name of the official protocol for proposing improvements to the network. The number “20”, on the other hand, indicates the series of the proposal, made by Fabian Vogelsteller in November 2015. 

ERC-20 became the standard for creating fungible tokens on the Ethereum blockchain. The guidelines require the smart contract to fulfil 6 mandatory functions, plus 3 optional ones, namely: 

-TotalSupply: To manage the maximum number of tokens that can be dispensed

-BalanceOf: To determine how many tokens have an address

-Transfer: To send the token from the provider to the user who gets it

-TransferFrom: To manage the exchange of tokens between users

-Approve: To confirm the transfer to the user, checking that the number of tokens has not reached the supply limit. 

-Allowance: To check that the user has a minimum amount to make the transfer. 

The optional functions are “name”, “symbol” and “decimal”. These enrich the properties of the token, to facilitate its operation. 

An example of an ERC-20 token is YNG. The Young Platform token complies with the technical standard introduced by Ethereum and is managed on the Ethereum blockchain.

Correlated words

Bonding

A process in which cryptocurrencies are blocked as a form of commitment to obtain benefits or the right to perform certain activities in a network.

Staking Derivative

Derivatives of staking systems whose value depends on the performance of the staked native tokens and the amount of rewards issued by the network

Yield Farming

A typical feature of decentralised finance (DeFi) that allows people to put their cryptocurrencies to work for a return.

Swap

The conversion of tokens into other tokens on a decentralised exchange.

Staking

Depositing and holding cryptocurrencies on certain blockchains to obtain cryptocurrency incentives.

Smart Contract

An agreement in digital form that allows actions to be triggered automatically if certain conditions are met.

Crypto Lending

A financial service that allows lending and borrowing cryptocurrencies on a centralised or decentralised platform

DEX

A Decentralised Exchange allows cryptocurrency trading without intermediaries and directly on the blockchain.

DeFi

Decentralised Finance includes all blockchain-based and decentralised financial solutions.

DApp

Decentralised application allowing the use of a blockchain-based service.

DAO

The Decentralised Autonomous Organisation is a form of automated blockchain governance.

CeFi

Centralised finance is the centralised counterpart of DeFi, but should not be confused with traditional finance.

Arbitrage

Buying and selling in different markets in order to take advantage of the disparity in prices.

APY

A metric often used in DeFi, it indicates the percentage return per year you receive on an investment or loan.

APR

The annual percentage rate you receive for an investment or loan.

AMM

Automated Market Makers are smart contracts adopted by decentralised exchanges to automatically execute orders.

Aggregator

An online collector of similar content or services from different sources for easy access. An example is Yearn Finance

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