ERC20 Development; Tips for Founders – Crypto Business Show Episode 21
Rob: Hello everybody, welcome to the crypto business podcast brought to you by TokenMinds. I’m your host for Rob Eijgenraam, director at TokenMinds, full-service crypto, and nft agency. In this podcast, we’re discussing any blockchain topic relevant to businesses and founders. Today we’re talking about erc20 development tips for founders, and what entrepreneurs should take into account. I have with me today Josh who’s a veteran blockchain development manager welcome, Josh.
Josh: Thank you, Rob, thanks for having me again.
Rob: You’re welcome. Thank you for being here. Let’s start with the first question, what is an erc20 smart contract?
Josh: So, an erc20 is actually a technical standard, it is used for all smart contracts on the Ethereum blockchain, specifically for token implementation. So basically the standard provides a list of rules that all Ethereum-based tokens must follow. The majority of the tokens these days are already based on or compliant with the erc20 token standard.
Rob: All right and what are the basic erc20 smart contract functions?
Josh: So according to the erc20 token standard, there are six defined implementation coding functions for the benefit of the tokens within the Ethereum system. So in terms of implementation coding for erc20 tokens, these are the basic coding functions. The first one is the total supply function which basically returns the total amount of tokens currently in circulation. The second one is the balance of function. So this function returns a balance of any address that you put on the particular smart contract. The third will be the allowance which allows other contracts or addresses to transfer erc20. This is very beneficial for projects which have interconnected smart contracts like nfts and games. The fourth one is to transfer, so this is just a basic transfer function that lets the owner of the contract send a given amount of tokens to another address. The fifth one is approval, in which the owner of the smart contract authorizes or approves a specific address to withdraw instances of the token from the owner’s address, and lastly transfer from. So this function allows the smart contracts to automate the process of transfer and send a given amount of token on behalf of the owner so that is the six basic functions defined in the ERC20 standard.
Rob: All right and what is a vesting period?
Josh: So one of the things that businesses that would like to have an erc20 token to take a look at are the vesting period. So the vesting period is basically a period of time wherein the token is locked up, to prevent any anomalous move from the contract owners. So this gives us confidence in the community to invest in the token. There is a lot of rug pulls going on in the community and then most of the smart investors in this particular ecosystem would always see the vesting period and the vesting contract before investing in a specific erc20 token.
Rob: Can you tell us a little bit more about the erc20 testing process?
Josh: So when the token smart contract is developed and in some cases, a vesting contract is also ready, the smart contracts are deployed in testnet, and it’s being tested for any potential errors. So basically we do testing for all of the six functions that I mentioned a while ago, and then make sure that there are no potential errors in this particular smart contract.
Rob: And would you recommend a third-party audit? Can you tell us a little bit more about that?
Josh: Yeah, so after this internal development testing mentioned a while ago is done, we always advise conducting a third-party audit, this is to make sure that the smart contract is secure and free of any security issues. It is not technically mandatory but it will be in the best interest of the contract owner to do third-party auditing.
Rob: And what can you tell us about the mainnet deployment?
Josh: So after all the testing and audit is done basically what is left is to launch the erc20 token to the Ethereum main net. So the token launch is scheduled then the vesting period starts and is triggered after that, and after this launch, the owner can already apply indexes for the ico or ido. So basically that’s everything about the erc20 token.
Rob: Yeah I appreciate it Josh thank you so much and thanks everybody for listening. We are gonna have another episode in two weeks about a full guide on nft development, the whole process, and everything you need to take into account there. So until then and for now thank you Josh for participating.
Josh: Thank you, guys.