ERC-20 stands for Ethereum Request for Comments 20, a Token Standard for Fungible Tokens within smart contracts on the Ethereum blockchain. The standard allows users to create their own tokens and token applications on Ethereum.
ERC-20 tokens will function just like ETH, the native token of the Ethereum blockchain - they can have value and be sent and received. The ERC-20 token standard provides rules that all other tokens within the ecosystem must follow. ERC-20 tokens are blockchain-based digital assets, but the underlying common feature is that they do not operate on a separate network but run on Ethereum's network.