The Ethereum network uses tokens that can be purchased, sold, or exchanged. While there were multiple types of tokens used at first, ERC-20 has emerged as the standard for the platform. It offers rules and functions that apply to all tokens on the network. As such, it is critical for stability, security, and usability.
ERC-20 tokens specify six functions that benefit other tokens in the system. These come down to functionality and ensure that all tokens, regardless of type, work the same way throughout the Ethereum system.
Blockchain projects in need of funding will find that ERC-20 token creation is essential. It allows tokens to be developed that can then be used to spur funding from investors, such as in an initial coin offering (ICO). However, while ERC-20 tokens can technically be created by anyone, as it is an open system, it does require specific knowledge and experience.