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ERC-20 Tutorial

Overview​

The ERC-20 standard is the foundational specification for fungible tokens across Ethereum and EVM-compatible networks. A fungible token represents interchangeable units of value, meaning every token unit is identical to another. This property makes ERC-20 the preferred standard for digital currencies, financial instruments, and tokenized commodities.

In the context of the Watr Network, ERC-20 can be used to represent standardized commodity units such as metals, energy credits, or carbon offsets. For example:

  • 1 COPT token = 1 kilogram of Copper
  • Each token is uniform and exchangeable
  • Supply can represent real-world reserves, vaulted inventory, or synthetic exposure depending on system design

This tutorial demonstrates how to:

  • Implement an ERC-20 token using OpenZeppelin
  • Deploy the contract
  • Mint new commodity units
  • Transfer ownership of tokens
  • Query total supply and balances
  • Understand how this standard applies to commodity tokenization systems

We will use OpenZeppelin Contracts, the industry-standard audited library for secure smart contract development.

Install Dependencies​

npm install --save-dev hardhat
npm install @openzeppelin/contracts

CopperToken.sol​

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.20;

import "@openzeppelin/contracts/token/ERC20/ERC20.sol";
import "@openzeppelin/contracts/access/Ownable.sol";

contract CopperToken is ERC20, Ownable {

    constructor() ERC20("Copper Token", "COPT") {}

    function mint(address to, uint256 amount) public onlyOwner {
        _mint(to, amount);
    }

    function burn(address from, uint256 amount) public onlyOwner {
        _burn(from, amount);
    }
}

Deploy Script​

const hre = require("hardhat");

async function main() {
  const Copper = await hre.ethers.getContractFactory("CopperToken");
  const copper = await Copper.deploy();
  await copper.waitForDeployment();

  console.log("CopperToken deployed to:", await copper.getAddress());
}

main();

Interaction Scripts​

Mint​

await Copper.mint("RECIPIENT_ADDRESS", hre.ethers.parseUnits("100", 18));

Transfer​

await Copper.transfer("RECIPIENT_ADDRESS", hre.ethers.parseUnits("10", 18));

Total Supply​

const totalSupply = await Copper.totalSupply();

Balance Of​

const balance = await Copper.balanceOf("WALLET_ADDRESS");

When to Use ERC-20​

ERC-20 is ideal when:

  • The asset is fully fungible
  • All units are identical
  • A single commodity is represented per contract
  • Financial composability (DeFi integrations) is required

Typical commodity examples:

  • Copper
  • Silver
  • Aluminum
  • Gold-backed tokens