ERC 20 is a commonly used standard for creating and developing new tokens created on the Ethereum blockchain ecosystem. ERC is short for Ethereum Request for Comment, while the number 20 indicates the proposal identifier. The standard enables interoperability between different tokens created on the Ethereum network.

As a token standard, it sets universal rules that need to be followed for all ERC-20 tokens, which enables them to interact with each other. The ERC-20 standards are used as a blueprint for creating Fungible tokens. Some popular tokens built on the ERC-20 standard are Chainlink (LINK), Tether (USDT), and Wrapper Bitcoin (WBTC). ERC standards can be created with the submission of EIP or Ethereum Improvement protocol.