What is ERC-20?
ERC-20 is the standard interface for fungible tokens on Ethereum and EVM-compatible chains — defining functions like transfer, approve, and balanceOf that enable interoperability across the entire ecosystem.
WHY IT MATTERS
ERC-20 is arguably the most important standard in crypto. It defines how fungible tokens behave: how they're transferred, how third parties get spending approval, and how balances are queried. Every token that follows ERC-20 works with every wallet, DEX, and DeFi protocol.
The standard defines six required functions (totalSupply, balanceOf, transfer, allowance, approve, transferFrom) and three optional metadata fields (name, symbol, decimals). This simplicity is its strength — anyone can implement it.
USDC, USDT, LINK, UNI, DAI — all ERC-20 tokens. The standard has been cloned across every EVM chain (BEP-20 on BSC, etc.), making it the universal token interface.
HOW POLICYLAYER USES THIS
PolicyLayer's spending controls are built around the ERC-20 interface. The approve/transferFrom pattern that ERC-20 defines is precisely what PolicyLayer uses to enforce allowances — granting agents limited, policy-constrained spending authority over specific tokens.