Definition ∞ ERC-20 assets refer to fungible tokens created and issued on the Ethereum blockchain, adhering to the ERC-20 technical standard. This standard defines a common set of rules for tokens, allowing them to interact seamlessly with other applications, wallets, and smart contracts within the Ethereum ecosystem. These assets represent a wide array of digital value, from utility tokens to stablecoins. Their widespread adoption has significantly contributed to the growth of decentralized finance.
Context ∞ ERC-20 assets remain a foundational component of the Ethereum network, with ongoing discussions about their scalability and transaction costs. The transition to Ethereum 2.0 and layer-2 solutions aims to address these limitations, enhancing their utility. A critical future development involves increasing cross-chain compatibility and the emergence of new token standards that build upon or extend ERC-20 functionalities.