ERC-20 implementation in Blockchain / Solidity - Mini Project: Build & Apply

ERC-20 Token Implementation

📖 Scenario: You are creating a simple cryptocurrency token on the Ethereum blockchain. This token will follow the ERC-20 standard, which means it has specific rules for how tokens are transferred and tracked.Imagine you want to create your own digital coins that people can send to each other, check balances, and approve others to spend on their behalf.

🎯 Goal: Build a basic ERC-20 token contract in Solidity that allows users to check balances, transfer tokens, and approve others to spend tokens for them.

📋 What You'll Learn

Create a contract named SimpleToken

Define state variables for name, symbol, decimals, and totalSupply

Create a mapping called balances to track token balances

Create a mapping called allowances to track approved spending

Implement balanceOf, transfer, approve, and transferFrom functions

Emit Transfer and Approval events appropriately

💡 Why This Matters

🌍 Real World

ERC-20 tokens are the most common standard for creating cryptocurrencies and digital assets on Ethereum and compatible blockchains. They enable easy token transfers and integration with wallets and exchanges.

💼 Career

Understanding ERC-20 token implementation is essential for blockchain developers working on decentralized finance (DeFi), NFT projects, and custom token creation.

1

Set up the contract and state variables

Create a Solidity contract named SimpleToken. Inside it, declare public state variables string name set to "SimpleToken", string symbol set to "STK", uint8 decimals set to 18, and uint256 totalSupply set to 1000000 * 10 ** 18. Also, create a mapping(address => uint256) balances to hold token balances.

Blockchain / Solidity

pragma solidity ^0.8.0;

contract SimpleToken {
    // Your code here
}

Hint

Start by declaring the contract and the variables exactly as described. Use public to allow reading these variables from outside.

2

Initialize balances and add allowances mapping

Add a constructor to the SimpleToken contract that assigns the entire totalSupply to the contract deployer's address using msg.sender. Also, declare a mapping(address => mapping(address => uint256)) allowances to track approved spending.

Blockchain / Solidity

pragma solidity ^0.8.0;

contract SimpleToken {
    string public name = "SimpleToken";
    string public symbol = "STK";
    uint8 public decimals = 18;
    uint256 public totalSupply = 1000000 * 10 ** 18;

    mapping(address => uint256) public balances;
    
    // Your code here
}

Hint

Use a constructor function to set the initial balance. Declare the nested mapping for allowances exactly as shown.

3

Implement transfer, approve, and transferFrom functions

Inside SimpleToken, implement three functions: transfer, approve, and transferFrom. transfer should move tokens from msg.sender to a recipient if the sender has enough balance. approve should allow a spender to spend a specified amount from the caller's balance. transferFrom should allow a spender to transfer tokens from an owner's balance if approved. Use require to check balances and allowances. Update balances and allowances accordingly.

Blockchain / Solidity

pragma solidity ^0.8.0;

contract SimpleToken {
    string public name = "SimpleToken";
    string public symbol = "STK";
    uint8 public decimals = 18;
    uint256 public totalSupply = 1000000 * 10 ** 18;

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

    constructor() {
        balances[msg.sender] = totalSupply;
    }

    // Your code here
}

Hint

Use require to check conditions. Update balances and allowances carefully. Don't forget to emit events after changes.

4

Add balanceOf function and test output

Add a public view function balanceOf that takes an address account and returns the token balance of that account from balances. Then, write a simple test line to print the balance of the contract deployer (msg.sender) using balanceOf(msg.sender). Since Solidity contracts do not print, simulate this by returning the balance in a public function called testBalance.

Blockchain / Solidity

pragma solidity ^0.8.0;

contract SimpleToken {
    string public name = "SimpleToken";
    string public symbol = "STK";
    uint8 public decimals = 18;
    uint256 public totalSupply = 1000000 * 10 ** 18;

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

    constructor() {
        balances[msg.sender] = totalSupply;
    }

    function transfer(address to, uint256 amount) public returns (bool) {
        require(balances[msg.sender] >= amount, "Not enough balance");
        balances[msg.sender] -= amount;
        balances[to] += amount;
        emit Transfer(msg.sender, to, amount);
        return true;
    }

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

    function transferFrom(address from, address to, uint256 amount) public returns (bool) {
        require(balances[from] >= amount, "Not enough balance");
        require(allowances[from][msg.sender] >= amount, "Allowance exceeded");
        balances[from] -= amount;
        balances[to] += amount;
        allowances[from][msg.sender] -= amount;
        emit Transfer(from, to, amount);
        return true;
    }

    event Transfer(address indexed from, address indexed to, uint256 value);
    event Approval(address indexed owner, address indexed spender, uint256 value);

    // Your code here
}

Hint

The balanceOf function returns the balance for any address. The testBalance function returns the deployer's balance to simulate output.

Practice

1. What is the main purpose of the balanceOf function in an ERC-20 token contract?

easy

A. To approve another address to spend tokens

B. To transfer tokens from one address to another

C. To check the token balance of a specific address

D. To mint new tokens to an address

Solution

1. Step 1: Understand the role of balanceOf

   The balanceOf function returns how many tokens a given address owns.

2. Step 2: Compare with other functions

   Functions like transfer move tokens, approve allows spending, and minting creates tokens. These are different from checking balance.

3. Final Answer:

   To check the token balance of a specific address -> Option C

4. Quick Check:

   balanceOf = check balance [OK]

Hint: balanceOf always returns token count for an address [OK]

Common Mistakes:

• Confusing balanceOf with transfer function
• Thinking approve checks balances
• Mixing minting with balance checking

2. Which of the following is the correct Solidity function signature for transferring tokens in an ERC-20 contract?

easy

A. function transfer(address to, uint256 amount) public returns (bool);

B. function transfer(uint256 amount, address to) public returns (bool);

C. function transfer(address to) public returns (uint256);

D. function transfer(address from, address to, uint256 amount) public;

Solution

1. Step 1: Recall ERC-20 transfer signature

   The standard transfer function takes the recipient address first, then the amount, and returns a boolean.

2. Step 2: Check each option

   function transfer(address to, uint256 amount) public returns (bool); matches the standard: transfer(address to, uint256 amount) public returns (bool). Others have wrong parameter order, missing return, or extra parameters.

3. Final Answer:

   function transfer(address to, uint256 amount) public returns (bool); -> Option A

4. Quick Check:

   transfer(to, amount) returns bool [OK]

Hint: transfer always has (address to, uint256 amount) and returns bool [OK]

Common Mistakes:

• Swapping parameter order
• Omitting return type
• Adding extra parameters not in standard

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

mapping(address => uint256) balances;

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

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

medium

A. true

B. Returns the remaining balance

C. Throws an error

D. false

Solution

1. Step 1: Check balance condition

   The function checks if balances[msg.sender] is at least amount. Here, 50 < 60, so condition fails.

2. Step 2: Determine function return

   Since condition fails, the function skips token transfer and returns false.

3. Final Answer:

   false -> Option D

4. Quick Check:

   Insufficient balance returns false [OK]

Hint: Transfer returns false if sender lacks enough tokens [OK]

Common Mistakes:

• Assuming transfer throws error on insufficient balance
• Thinking it returns true anyway
• Confusing return value with balance amount

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

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

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

medium

A. No bug, function is correct

B. Should emit an Approval event after setting allowance

C. Should check if amount is less than balance

D. Should decrease allowance instead of setting it

Solution

1. Step 1: Review ERC-20 approve requirements

   The standard requires emitting an Approval event after changing allowance for transparency.

2. Step 2: Check function code

   The function sets allowance but does not emit the Approval event, missing a key part of the standard.

3. Final Answer:

   Should emit an Approval event after setting allowance -> Option B

4. Quick Check:

   approve must emit Approval event [OK]

Hint: approve must emit Approval event to follow standard [OK]

Common Mistakes:

• Ignoring event emission
• Checking balance in approve (not required)
• Decreasing allowance instead of setting

5. You want to add a feature to your ERC-20 token that prevents transfers when the contract is paused. Which is the best way to implement this without breaking the ERC-20 standard?

hard

A. Add a paused boolean and require it false in transfer and transferFrom functions

B. Remove the transfer function and replace it with a new function that checks pause

C. Add a new function pauseTransfer that users must call before transferring

D. Modify the balanceOf function to return zero when paused

Solution

1. Step 1: Understand pause feature integration

   To pause transfers, the contract needs a state variable like paused and checks in transfer functions.

2. Step 2: Check ERC-20 compliance

   Removing or renaming transfer breaks the standard. Changing balanceOf output breaks expected behavior. Adding a separate function for pause is not standard.

3. Final Answer:

   Add a paused boolean and require it false in transfer and transferFrom functions -> Option A

4. Quick Check:

   Pause by require(!paused) in transfer functions [OK]

Hint: Use a paused flag and require it false in transfer methods [OK]

Common Mistakes:

• Removing or renaming standard functions
• Changing balanceOf behavior
• Adding extra steps users must call