LibraryMarkets2015Design paperCorpus record
Token Standard
ERC-20. Fabian Vogelsteller and Vitalik Buterin.
A token contract exposes total supply, balance, transfer, and allowances. Wallets and exchanges can integrate one interface.
A reading of the public document. Not a copy of it, and not a claim about a later network that reused the name.
A integration that treats every ERC-20 as redeemable for a reserve has invented a promise the standard does not contain.
The five-minute read
The defect
Every early token invented its own transfer function. A wallet could not list a balance it did not have custom code for.
The rule
A token contract exposes total supply, balance, transfer, and allowances. Wallets and exchanges can integrate one interface.
How it is put together
The contract is the ledger of balances. An allowance lets a spender move tokens. The standard does not say the token is a claim on anything.
Where the claim stops
ERC-20 does not make a token a security, a deposit, or a share.
One action, walked through
- Read balanceOf.
- Call transfer, or approve and transferFrom.
- Assume nothing about decimals unless you read them. Decimals were a later convention.
- What does a balance represent outside the contract?
The argument, unpacked
Why it is still on the desk
A integration that treats every ERC-20 as redeemable for a reserve has invented a promise the standard does not contain.
After the text
Almost every fungible token on Ethereum is this interface, plus extra functions the standard does not police.
What has to be true
- ERC-20 does not make a token a security, a deposit, or a share.
- Missing return values in early tokens broke composability. That history matters.
- A transfer is not a notification to the recipient contract.
What happened after the paper
Almost every fungible token on Ethereum is this interface, plus extra functions the standard does not police.
What to check before you use the idea
- What does a balance represent outside the contract?
- Does transfer return a boolean this contract actually sets?
- Who has a non-zero allowance?
Terms
- Allowance
- A permission for another address to move tokens.
- Balance
- A number in this contract. Not, by itself, a claim on a bank.
The problem the paper names
Every early token invented its own transfer function. A wallet could not list a balance it did not have custom code for.
What the design proposes
- The contract is the ledger of balances.
- An allowance lets a spender move tokens.
- The standard does not say the token is a claim on anything.
How the mechanism is specified
- Read balanceOf.
- Call transfer, or approve and transferFrom.
- Assume nothing about decimals unless you read them. Decimals were a later convention.
What this page does not treat as proven
- ERC-20 does not make a token a security, a deposit, or a share.
- Missing return values in early tokens broke composability. That history matters.
- A transfer is not a notification to the recipient contract.
Why a venture studio still reads it
A integration that treats every ERC-20 as redeemable for a reserve has invented a promise the standard does not contain.
This is Blockchain Lab's reading of a public design paper. It is not the paper, not a copy of it, and not an offer of tokens, equity, custody or a partnership. Later network behaviour can diverge from the text. Nothing here is investment, legal or technical advice.
Research status: Design paper. Last reviewed: 1 October 2026. This is a reading of a public paper, not investment, legal or security advice.