ERC-20 fungible token standard in Blockchain / Solidity - Practice Problems & Coding Challenges

Challenge - 5 Problems

❓ Predict Output

intermediate

What is the output of the transfer function call?

Consider the following simplified ERC-20 transfer function call. What will be the value of the event log emitted after calling transfer(receiver, 50) from an account with 100 tokens?

Blockchain / Solidity

mapping(address => uint256) balances;

function transfer(address to, uint256 amount) public returns (bool) {
    require(balances[msg.sender] >= amount, "Insufficient balance");
    balances[msg.sender] -= amount;
    balances[to] += amount;
    emit Transfer(msg.sender, to, amount);
    return true;
}

// Initial balances:
balances[msg.sender] = 100;
balances[receiver] = 0;

// Call:
transfer(receiver, 50);

A Transfer event emitted with from=msg.sender, to=receiver, value=50

B Transfer event emitted with from=receiver, to=msg.sender, value=50

C Transfer event emitted with from=msg.sender, to=receiver, value=100

D No event emitted due to insufficient balance

💡 Hint

Remember the transfer function moves tokens from the sender to the receiver and emits an event with those details.

The transfer function deducts the amount from the sender's balance and adds it to the receiver's balance. It then emits a Transfer event with the sender as 'from', the receiver as 'to', and the amount transferred as 'value'.

🧠 Conceptual

intermediate

Which function allows a third party to spend tokens on behalf of the owner?

In the ERC-20 standard, which function enables an approved spender to transfer tokens from the owner's account?

A transfer

B balanceOf

C transferFrom

D approve

💡 Hint

Think about the function that moves tokens from one account to another by a third party.

The transferFrom function allows a spender who has been approved by the token owner to transfer tokens from the owner's account to another account.

🔧 Debug

advanced

Identify the error in this approve function implementation

What error will occur when calling this approve function implementation?

Blockchain / Solidity

mapping(address => mapping(address => uint256)) allowances;

function approve(address spender, uint256 amount) public returns (bool) {
    allowances[msg.sender][spender] = amount;
    emit Approval(msg.sender, spender, amount);
    return true;
}

// Usage:
approve(spender, 100);

A No error; function works correctly

B Reentrancy vulnerability allowing double spending

C Compilation error due to missing return statement

D Approval race condition allowing spender to spend more than intended

💡 Hint

Consider what happens if the spender uses the old allowance before the new one is set.

This approve implementation is vulnerable to the known ERC-20 race condition where a spender can use the old allowance and the new allowance if the owner changes it without first setting it to zero.

📝 Syntax

advanced

Which option correctly declares the Transfer event in Solidity?

Choose the correct Solidity syntax to declare the Transfer event as per ERC-20 standard.

A event Transfer(address from, address to, uint256 value);

B event Transfer(address indexed from, address indexed to, uint256 value);

C event Transfer(address indexed from, address to, uint256 value);

D event Transfer(address from, address indexed to, uint256 value);

💡 Hint

The ERC-20 standard requires the first two parameters to be indexed for filtering.

The Transfer event must have the 'from' and 'to' parameters indexed to allow efficient filtering in logs. Option B correctly uses 'indexed' for both.

🚀 Application

expert

How many total tokens exist after minting and burning operations?

Given the following operations on an ERC-20 token contract, what is the total supply after these calls? 1. Initial total supply is 1000 tokens. 2. Mint 500 tokens to address A. 3. Burn 200 tokens from address B. Assume address B has at least 200 tokens before burning.

Blockchain / Solidity

uint256 totalSupply = 1000;

function mint(address to, uint256 amount) public {
    totalSupply += amount;
    balances[to] += amount;
}

function burn(address from, uint256 amount) public {
    require(balances[from] >= amount, "Insufficient balance to burn");
    balances[from] -= amount;
    totalSupply -= amount;
}

// Operations:
mint(addressA, 500);
burn(addressB, 200);

A 1300 tokens

B 1500 tokens

C 1000 tokens

D 800 tokens

💡 Hint

Add minted tokens to total supply and subtract burned tokens.

Starting with 1000 tokens, minting 500 increases total supply to 1500. Burning 200 reduces total supply to 1300.

Practice

1. What is the main purpose of the ERC-20 standard in Ethereum?

easy

A. To ensure tokens have a common set of functions for compatibility

B. To create unique non-fungible tokens

C. To define the Ethereum network consensus rules

D. To manage smart contract deployment costs

Solution

1. Step 1: Understand ERC-20 purpose

   ERC-20 defines a common interface for fungible tokens to work uniformly.

2. Step 2: Identify the correct purpose

   This standard allows wallets and apps to interact with tokens easily by using the same functions.

3. Final Answer:

   To ensure tokens have a common set of functions for compatibility -> Option A

4. Quick Check:

   ERC-20 = Common token interface [OK]

Hint: ERC-20 standardizes token functions for easy use [OK]

Common Mistakes:

• Confusing ERC-20 with NFT standards
• Thinking ERC-20 controls Ethereum network rules
• Assuming ERC-20 manages deployment costs

2. Which of the following is the correct function signature to check a token balance in ERC-20?

easy

A. function balanceOf(address owner) external view returns (uint256);

B. function getBalance(address owner) public returns (uint256);

C. function balance(address owner) external returns (bool);

D. function checkBalance(address owner) public view returns (bool);

Solution

1. Step 1: Recall ERC-20 balance function

   The standard defines balanceOf as a view function returning a uint256 balance.

2. Step 2: Match function signature

   function balanceOf(address owner) external view returns (uint256); matches the exact signature: external view returns (uint256).

3. Final Answer:

   function balanceOf(address owner) external view returns (uint256); -> Option A

4. Quick Check:

   balanceOf = correct signature [OK]

Hint: balanceOf returns uint256 and is a view function [OK]

Common Mistakes:

• Using wrong function name like getBalance
• Missing view keyword for read-only function
• Returning bool instead of uint256

3. Given this Solidity snippet from an ERC-20 token contract:

function transfer(address to, uint256 amount) public returns (bool) {
    if (balances[msg.sender] < amount) {
        return false;
    }
    balances[msg.sender] -= amount;
    balances[to] += amount;
    emit Transfer(msg.sender, to, amount);
    return true;
}

What will transfer return if the sender has 50 tokens and tries to send 60 tokens?

medium

A. true

B. false

C. It will throw an error

D. It will return zero

Solution

1. Step 1: Check sender balance condition

   The function checks if sender's balance is less than amount; if yes, returns false.

2. Step 2: Apply given values

   Sender has 50 tokens but tries to send 60, so condition is true and function returns false.

3. Final Answer:

   false -> Option B

4. Quick Check:

   Insufficient balance returns false [OK]

Hint: Transfer returns false if balance is insufficient [OK]

Common Mistakes:

• Assuming it throws error instead of returning false
• Thinking it returns true regardless
• Confusing return value with event emission

4. Identify the error in this ERC-20 approve function snippet:

function approve(address spender, uint256 amount) public returns (bool) {
    allowances[msg.sender][spender] = amount;
    emit Approval(msg.sender, spender, amount);
    return true;
}

What is the common security issue with this implementation?

medium

A. It does not emit the Approval event

B. It does not check if spender is zero address

C. It allows race condition by directly setting allowance

D. It returns false instead of true

Solution

1. Step 1: Understand approve race condition

   Directly setting allowance can cause race conditions if spender uses old and new allowance simultaneously.

2. Step 2: Identify missing mitigation

   Safe implementations require resetting allowance to zero before changing it to new value to avoid this issue.

3. Final Answer:

   It allows race condition by directly setting allowance -> Option C

4. Quick Check:

   approve race condition = direct allowance set [OK]

Hint: Always reset allowance to zero before changing it [OK]

Common Mistakes:

• Thinking missing zero address check is main issue
• Assuming Approval event is missing
• Believing return value is incorrect

5. You want to create an ERC-20 token that charges a 1% fee on every transfer and sends it to a fee collector address. Which modification to the transfer function correctly implements this?

hard

A. Send full amount to recipient, then send 1% from sender to collector

B. Add 1% to amount, send full amount to recipient, send fee separately

C. Send full amount to recipient and fee collector equally

D. Deduct 1% from amount, send fee to collector, send rest to recipient

Solution

1. Step 1: Calculate fee and net transfer

   Calculate 1% fee from amount, subtract it to get net amount to recipient.

2. Step 2: Transfer fee and net amount correctly

   Send fee to fee collector address and net amount to recipient to implement fee deduction.

3. Final Answer:

   Deduct 1% from amount, send fee to collector, send rest to recipient -> Option D

4. Quick Check:

   Fee deducted and sent correctly = Deduct 1% from amount, send fee to collector, send rest to recipient [OK]

Hint: Subtract fee from amount before sending tokens [OK]

Common Mistakes:

• Adding fee on top of amount instead of deducting
• Sending full amount to recipient and fee separately from sender
• Splitting amount equally between recipient and fee collector