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Encyclopedia Ethereum · Entry 10

ERC-20 tokens: balances, decimals and spending permissions

AI-assisted research · separate automated verificationCorrections

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Ethereum
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6 cited records
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About 3 minutes
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In this article

At a glance

Key facts

Key facts for ERC-20 tokens: balances, decimals and spending permissions
FactDetailSource
Balance querybalanceOf reads units held by an account[1]
DecimalsOptional display metadata; units remain integers[1]
AllowanceA limit on an approved spender’s transfers[1]
01

A common interface lets different tokens work with the same tools

Wallets and applications can call familiar functions such as balanceOf and transfer without inventing a new interface for every token. Fungible means units of a particular token are treated as interchangeable within that token’s accounting.

The interface does not make two unrelated tokens interchangeable. Matching symbols or decimals do not make their balances part of the same asset. Network and contract identity are essential context.

02

Convert the integer with the token’s own scale

For a token displaying six decimals, 1,250,000 base units display as 1.25 tokens. With eighteen decimals, the same raw integer represents a very different quantity. The decimals field changes display interpretation, not the integer stored or transferred.

ERC-20 makes metadata such as decimals optional. Software needs an explicit supported convention if metadata is missing, and should not assume every Ethereum token uses eighteen decimals. Preserve integer precision when encoding amounts.

03

Approving a spender enables a separate transfer path

A user can transfer their own tokens or approve another spender to use transferFrom within an allowance. This supports applications that need to move tokens as one step in a larger operation.

For example, approving 20 units permits spending up to that authorized amount under the token’s implementation. It does not by itself purchase anything. An included approval transaction can have an ETH gas cost even though the token balance has not moved.

04

The interface is not a promise about backing or control

ERC-20 specifies token operations, not a reserve requirement, a guaranteed market price or a universal supply schedule. Extra contract logic may determine minting, transfer restrictions or administrative powers.

A successful token transfer is evidence that the contract accepted the operation. Assessing an issuer’s claims or the rights attached to a token requires additional evidence outside the interface specification.

Direct answers

Questions people ask

Is ETH an ERC-20 token?

No. ETH is the native asset tracked by Ethereum accounts. An ERC-20 token maintains its balances through a contract interface.

Does a token ticker uniquely identify a token?

No. ERC-20 permits display names and symbols but does not provide a global unique-name registry. The chain and contract identify the implementation.

Can a standard token transfer report failure?

Yes. ERC-20 instructs callers to handle a false return value rather than assuming every transfer succeeds. Actual implementations require careful handling.

Inspect the evidence

The answer and key facts have stable claim links. These records retain the scope and qualification when reused.

ERC-20 is a standard interface for fungible tokens implemented by smart contracts. It defines ways to inspect supply and balances, transfer units and authorize a spender. It does not guarantee a token’s value, backing, uniqueness of name or absence of issuer controls. ETH itself is Ethereum’s native asset, not an ERC-20 balance.

Scope: Ethereum. Verification: verified · 2026-10-02T18:16:35.976Z.

Link to this claim
Balance query: balanceOf reads units held by an account

Scope: Ethereum. Verification: verified · 2026-10-02T18:16:35.976Z.

Link to this claim
Decimals: Optional display metadata; units remain integers

Scope: Ethereum. Verification: verified · 2026-10-02T18:16:35.976Z.

Link to this claim
Allowance: A limit on an approved spender’s transfers

Scope: Ethereum. Verification: verified · 2026-10-02T18:16:35.976Z.

Link to this claim
Revision history
  1. — First publication after primary-source research and independent automated verification.
  2. — Expanded explanation: Convert the integer with the token’s own scale. Worked examples are illustrative; source checks and independent verification are recorded separately.

On the Follow a transaction path · Learn next: Transferring a stablecoin is not redeeming it

Source register

Sources and references

Retrieval dates and locators are recorded individually.
  1. ERC-20: Token StandardEthereum Request for Comments

    Defines fungible token balances, optional display metadata and spending allowance behavior.

    Locator: Methods: decimals, balanceOf, transfer, approve, transferFrom, allowance · Version / scope: 583335b7912e51b1ea515bb662532dd29b27e786 · Retrieved: 2026-10-02T14:35:55.037727+00:00Open source
  2. Introduction to etherethereum.org contributors

    Defines ETH, wei and gwei, the transaction value field and the role of ETH in fees and staking.

    Locator: What is ether; denominations; transferring ether · Version / scope: dcc900ff125891da5b6c723b905a7113cf1bd864 · Retrieved: 2026-10-02T14:42:49.460408+00:00Open source
  3. Interacting with smart contractsethereum.org contributors

    Supports read-only calls, state-changing transactions, ABI decoding and limits of simulation.

    Locator: Reading; writing; understanding contract ABIs; events and logs; simulating · Version / scope: dcc900ff125891da5b6c723b905a7113cf1bd864 · Retrieved: 2026-10-02T14:35:40.398262+00:00Open source
  4. Gas and feesethereum.org contributors

    Supports gas units, ETH/gwei units, base/priority fees, resource limits and charges for executed failed transactions.

    Locator: How are gas fees calculated; base fee; gas limit · Version / scope: dcc900ff125891da5b6c723b905a7113cf1bd864 · Retrieved: 2026-10-02T14:35:40.393022+00:00Open source
  5. Introduction to smart contractsethereum.org contributors

    Supports contract code/state, deterministic rules, illustrative vending logic, external-data limits and multisignature access.

    Locator: What is a smart contract; a digital vending machine; limitations; multisig · Version / scope: dcc900ff125891da5b6c723b905a7113cf1bd864 · Retrieved: 2026-10-02T14:35:40.398357+00:00Open source
  6. ERC-20 Token StandardEthereum Improvement Proposals

    Token supply, displayed units and balance accounting.

    Locator: totalSupply; balanceOf; transfer; decimals; approve; allowance; transferFrom; Transfer · Version / scope: ERC-20 · Retrieved: 2026-10-02T17:03:45.826ZOpen source
How this article was made

Research and drafting use AI assistance. A separate automated review checks claims against primary sources; no external expert or named human review is implied. Publication, substantive editing, source retrieval and verification are recorded separately. This version was independently checked by an automated reviewer on 2 October 2026.

Editorial method and corrections

Degrees of Satoshi editorial project. “ERC-20 tokens: balances, decimals and spending permissions.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/erc-20-tokens/