ERC-20 is a technical standard used to issue and implement tokens on the Ethereum blockchain. It was proposed in November 2015 by Ethereum developer Fabian Vogelsteller. The standard describes a common set of rules that should be followed for a token to function properly within the Ethereum ecosystem. Therefore, ERC-20 should not be considered as a piece of code or software. Instead, it may be described as a technical guideline or specification.
The ERC-20 standard makes it easier for developers to predict with more accuracy the interaction between different tokens and applications. It also defines how ERC-20 tokens are transferred within the Ethereum blockchain and how their respective supply and address balances are being consistently recorded.
In other terms, the ERC-20 gives developers a list of rules to follow, which enables seamless functioning within the larger Ethereum platform. Numerous decentralized applications (DApps) and services support ERC-20 tokens, making it easier for community members and businesses to adopt and use them on a wide range of applications (such as cryptocurrency wallets, decentralized exchanges, games, and so forth).