This article will answer these questions and give you in-depth knowledge of cryptocurrencies compatible with the Ethereum network.
What are the ERC20 Tokens: A Basic Definition
ERC20 tokens are cryptocurrencies that are compatible with the Ethereum network. Some people tend to think that ERC20 tokens are the cryptocurrencies of Ethereum or other layer-2 projects built on the network. This is actually very far from the truth.
Any fungible digital asset that can be sent over the Ethereum network is an ERC20 token. Mind you, certain tokens can be sent over other networks besides Ethereum. A good example is Tether USDT (USDT), that can be transferred via the TRC20 and BEP20 networks.
ERC20, TRC20, and BEP20 are token standards that operate on different blockchain networks. TRC20 is based on the TRON network, while BEP20 operates on the Binance Smart Chain (BSC). While all three standards enable fungible tokens, their differences lie in network performance, fee structures, and specific use cases.
Key Characteristics of ERC20 Tokens
Below are the essential attributes of ERC20 tokens:
- Fungibility: ERC20 tokens should be “swappable” with other ERC20 tokens without losing their value. For example, you can swap 100 USDT for TET and have $100 worth of TET after the swap. The only difference will be the fees you may or may not be asked to pay in ETH.
- Divisibility: Besides being fungible, ERC20 tokens should be divisible. You should be able to send a friend 0.2 TET from your 1 TET. Otherwise, TET will not be considered an ERC20 token.
- Compatibility with Ethereum Wallets: Without a doubt, ERC20 must be compatible with any Ethereum-supported wallet. Users must be able to send and receive these cryptocurrencies from any blockchain wallet compliant with the network.
Looking at the features mentioned above, it explains why ERC20 tokens are popular and widely adopted.
What are the ERC20 Tokens Used For?
There are three main types of ERC20, each having its unique function. Some of these functions include those outlined below:
- Utility: As their name states, these digital assets are the keys to specific purposes on the blockchain. They grant holders access to features, benefits, or benefits in the network. For example, individuals who hold TET can use it to pay the fees for minting SoftNote Bills.
- Governance: Governance tokens represent ownership and access, and allow holders to decide on the processes for a blockchain project or protocol. This process involves voting on proposals such as updates, fee structures, and treasury allocations. Examples include UNI (Uniswap) and AAVE, where token holders can propose and vote on changes to the platform’s operations.
- Security: These digital assets represent ownership of a traditional financial instrument, such as stocks, bonds, or revenue-sharing agreements. Security tokens are subject to regulatory oversight (e.g., by the SEC). They also offer investors dividends, profit shares, or other financial benefits.
- Stablecoins: Stablecoins are tokenized versions of fiat cryptocurrencies. These digital assets are pegged to regular cash in a 1:1 ratio. The peg is usually backed by other assets like Bitcoin, gold, or the fiat currency it represents.
Nevertheless, certain cryptocurrencies may perform one or more functions. A good example is the Tectum Emission Token. It is a utility token, that enables people to send and receive cryptocurrencies via the T12 network. At the same time, it also grants people the right to authorize transactions on the blockchain.
List of Top Ethereum Tokens in 2025
In truth, ERC20 tokens are significant, and we may spend the whole day listing them. To avoid all the confusion, we will list two cryptocurrencies that fall into the categories we created earlier.
Below are some of the top ERC20 tokens in 2025:
Stablecoins
- USDT (Tether): The largest stablecoin by market cap, pegged 1:1 to the US dollar, providing stability for traders and users in volatile markets.
- USDC (USD Coin): A regulated and fully collateralized stablecoin issued by Circle, widely used in DeFi protocols and cross-border payments.
Governance Tokens
- UNI (Uniswap): The native governance token of Uniswap, enabling holders to vote on protocol upgrades and treasury management.
- AAVE: A token representing ownership in the Aave lending platform, allowing users to participate in decision-making processes and earn rewards through staking.
Utility Tokens
- LINK (Chainlink): Powers the Chainlink decentralized oracle network, providing smart contracts with real-world data and external APIs.
- TET (Tectum Emission Token): Used within the Tectum Blockchain ecosystem for transactions, minting SoftNote Bills, and authorizing blockchain activities.
Security Tokens
- POLY (Polymath): A security token that allows issuers to create and manage compliant security tokens on the blockchain, ensuring adherence to regulatory requirements.
- STX (Harbor): Represents fractional ownership in real-world assets like real estate or private equity, offering investors access to traditionally illiquid markets while maintaining compliance with securities laws.
These tokens reflect the ongoing evolution of the Ethereum network, showcasing its versatility and adaptability to meet diverse user needs. As new trends emerge, the role of ERC20 tokens in shaping the future of decentralized finance and beyond becomes increasingly significant.
