The ERC-20 Standard

The erc-20 standard is the default API for creating and managing tokens within EVM-compatible smart contracts.

What are Tokens?

Tokens can represent virtually anything:

reputation points in an online platform
skills of a character in a game
financial assets like a share in a company
a fiat currency like USD
an ounce of gold

Example functionalities the ERC-20 standard provides:

transfer tokens from one account to another
get the current token balance of an account
get the total supply of the token available on the network
approve whether an amount of token from an account can be spent by a third-party account

If a Smart Contract implements the following methods and events it can be called an ERC-20 Token Contract and, once deployed, it will be responsible to keep track of the created tokens onchain.