What is ERC20?

How ERC20 tokens work

An ERC20 token isn’t stored in your wallet like a file. It is a smart contract that keeps a ledger of balances, and your address is simply an entry in that ledger. Sending a token means asking the contract to move part of your balance to another address.

The standard, proposed in 2015, defines a small set of functions such as balanceOf, transfer, approve and transferFrom. Because every token follows them, wallets, exchanges and apps can support thousands of tokens without custom code.

Approvals and allowances

The approve function lets another address, usually a smart contract such as a decentralized exchange, spend up to a set amount of your tokens. This is how swaps and many apps work, but an approval stays active until you change it.

Phishing sites abuse this by asking for unlimited approvals. Approve only the amount you need, only for contracts you trust, and revoke approvals you no longer use.

What to check before sending

Most lost ERC20 tokens come down to one of these details:

• The network: on exchanges, ERC20 almost always means Ethereum itself, even though the same standard runs on other EVM networks
• ETH for gas: every ERC20 transfer is paid in ETH, not in the token
• The token’s contract address, since anyone can deploy a token with a famous name
• Decimals: USDT on Ethereum uses 6 decimals while many tokens use 18, so rely on your wallet’s verified token data
• The recipient: tokens sent to the token’s own contract address are usually lost for good

ERC20 tokens in Waletifi

Waletifi supports ERC20 tokens on Ethereum and the same token standard on other EVM networks, all on one 0x address. Before you confirm, the review screen shows the network and the fee, warns you if you have no ETH for gas, and flags a transfer to the token’s own contract address.