Glossary · Crypto

ERC20 meaning: what is an ERC20 token?

ERC20 is the technical standard for tokens on the Ethereum blockchain; a token labelled ERC20, such as USDT or USDC on Ethereum, follows the same rules so any Ethereum wallet or exchange can hold and send it.

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Short answer

ERC20 means "a token on Ethereum". It is the set of rules most tokens on Ethereum follow, which is why one wallet can hold thousands of different tokens. On an exchange withdrawal screen, "ERC20" is the network option for sending a token such as USDT or USDC over Ethereum. Fees are paid in ETH and rise when the network is busy. ERC20 addresses start with 0x, exactly like addresses on BNB Chain and other Ethereum-compatible networks.

Key takeaways

  • A standard, not a coin. ERC20 describes how a token behaves on Ethereum; it is not itself something you buy.
  • Gas is paid in ETH. Sending an ERC20 token needs a little ETH in the same wallet.
  • 0x addresses are shared. The same address works on Ethereum, BNB Chain and others, which makes a wrong-network send easy to do.

What ERC20 is

ERC stands for Ethereum Request for Comments, and 20 was the number of the proposal. Put forward in 2015 and formally adopted as EIP-20, it defined a short list of functions every token should have: report the total supply, report a balance, transfer tokens and let another address spend tokens on your behalf. Because every ERC20 token answers to the same functions, a wallet or exchange that supports one can support them all with little extra work.

That shared standard is what made Ethereum the original home of most tokens, from stablecoins to the tokens of decentralised finance apps. Later blockchains copied it: BEP20 on BNB Chain and TRC20 on Tron are close relatives with almost the same functions.

An ERC20 token is not ETH. ETH is Ethereum's own coin and pays for transactions; ERC20 tokens are created by smart contracts that run on Ethereum.

ERC20 addresses and gas fees

An Ethereum address starts with 0x followed by 40 characters using the digits 0 to 9 and the letters a to f. The same address can receive ETH and every ERC20 token; there is no separate address per token.

Every transaction on Ethereum pays a fee called gas, in ETH. The fee depends on how busy the network is, not on how much you send, so moving $10 can cost the same as moving $10,000. At quiet times it is often small; at busy times it can be enough to make small transfers uneconomic. Exchanges usually show their own ERC20 withdrawal fee up front, and it is often higher than for low-fee networks.

Two practical points follow. A self-custody wallet holding USDT but no ETH cannot send it until you add some ETH. And because the fee is per transaction, ERC20 suits larger, less frequent transfers better than many small ones.

The 0x problem: ERC20, BEP20 and other chains

BNB Chain, Polygon, Arbitrum, Base, Avalanche and other networks are Ethereum-compatible, and they use exactly the same 0x address format. A MetaMask-style wallet shows the same address on all of them. That is convenient, and it is also why ERC20 and BEP20 mix-ups are the most common wrong-network error: nothing in the address warns you.

Sent onReceived byWhat usually happens
BEP20Your own self-custody walletThe funds are there on BNB Chain; switch the wallet to that network to see them
BEP20An exchange address that only lists ERC20Not credited automatically; recovery depends on the exchange and may cost a fee or fail
ERC20A Tron (T...) addressNormally refused, because the address format does not fit

The fix is a habit: read the network the receiver lists, pick the same one on the sending side and send a small test amount to any new address. Exchanges rarely need a memo for ERC20 deposits, but include one if the deposit page shows it.

Written and reviewed by the MarketPro research desk

MarketPro is a trading-signal and trading-education app operated by Harajuku Holdings LTD (Cyprus). Our signal desk publishes and tracks every trade idea in-app, and every page here is checked against the app's live behaviour before publishing. Last reviewed . How we produce signals and content · About MarketPro

FAQ

Frequently asked questions

What does ERC20 mean in USDT?
It means the USDT is on the Ethereum blockchain. It is the same Tether as on other networks, but it uses an Ethereum (0x) address and pays its fee in ETH.
Is ERC20 the same as Ethereum?
No. Ethereum is the blockchain and ETH is its coin. ERC20 is the standard that tokens built on Ethereum follow. An ERC20 token lives on Ethereum but is a separate asset from ETH.
Is BEP20 the same as ERC20?
They are near copies with the same address format, but they are different blockchains. A token sent on BEP20 lands on BNB Chain, not Ethereum, so the receiver must support BEP20 for it to arrive where they expect.
Why is the ERC20 fee so high?
Ethereum fees rise with demand for space in each block. When many people are transacting, gas goes up for everyone. Exchanges also set their own ERC20 withdrawal fees, which are often higher than for low-fee networks.
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