The concept of blockchain is easy enough to understand once you’ve done a little research. But there are so many cryptocurrencies on the market today that it can be difficult to tell the difference between them. Like any industry, the crypto market has its own set of terms—such as ERC-20— that aren’t always apparent to the outside observer.
Here, we’ll explore what ERC-20 tokens are and what they mean in the broader context of cryptocurrency and decentralized finance—also known as DeFi.
What Is an ERC-20 Token?
“ERC” stands for “Ethereum request for comment.” It is a technical scripting standard used within the Ethereum blockchain that acts as an interface for fungible tokens. ERC-20 was first implemented in 2015.
In this case, “fungible” tokens are those that are interchangeable for other assets or goods. Fungible tokens stand apart from non-fungible tokens, which are tokens that could represent an asset like a deed or a piece of artwork.
The best way to think of ERC-20 is as a set of accepted standards, rules, or guidelines. An ERC-20 token is, therefore, a token that follows those guidelines. Any ERC-20 token that is created is compatible with the broader Ethereum network.
ERC-20 also dictates the rules that smart contracts within the Ethereum blockchain must follow. When an ERC-20 token is created, it serves as a standard for creating and issuing smart contracts. Those smart contracts can then be used to tokenize assets that people invest in via DeFi networks or through their digital wallets.
Ethereum isn’t the only digital currency to use the ERC-20 standard either. It’s also used by popular digital currencies like Maker (MKR), Augur (REP), and many others.
Now EQIFI is using ERC-20 standards to issue its own native token: EQX.
What Is an EQX Token?
EQX is the EQIFI protocol’s native, fungible ERC-20 token built on the Ethereum platform. EQX is “native” to EQIFI in the sense that it is known to the EQIFI protocol, and the protocol maintains it.
You can use the EQIFI protocol for pooled lending, borrowing, and investing of Ethereum and any ERC-20 tokens, but you can enjoy some substantial benefits by holding EQX if you use EQIFI.
EQX has a total maximum deflationary supply of 500,000,000. Early adopters can enjoy significant benefits, but there are perks to holding EQX regardless of when you adopt it.
For example, token holders enjoy reduced fees and better rates on trades and other services across the EQIFI platform. Holders with 800,000 or more EQX tokens can even vote for new features on the EQIFI platform, including changes in interest rates and more. If you’re an EQX holder with a favorable loan-to-value (LTV) ratio (lending risk rating), you can even enjoy priority status for DeFi services.
Finally, you can earn up to 25% annual percentage yield (APY) in passive returns with EQX, and if you stake EQX, you’ll receive preferential rewards for providing liquidity to the platform.
Harness the Power of DeFi with EQIFI
Whether you’re a seasoned trader or just exploring the benefits of decentralized finance, EQIFI and EQX can provide you with substantial benefits.
Sign up for our whitelist today to get started.