ERC20 Fees

A majority of ‘Cryptocurrencies’ are not native to their own blockchains. Instead, it has become popular for new Cryptocurrencies to be issued on the Ethereum Blockchain. Unlike ETH (Ethereum’s native cryptocurrency) many ‘Cryptocurrencies’ are actually ERC-20 tokens.

ERC-20 tokens do not have their own Blockchain, meaning fees are not paid in that token. Instead, ERC-20 tokens exist in Smart Contracts on the Ethereum Blockchain. 

To send ERC-20 tokens, a user must inform the Smart Contract to allocate some of the tokens elsewhere. This is done by sending an 'on-chain' transaction to the Smart Contract. Since it is on the Ethereum Blockchain, a user must have ETH available to pay the fee. This transaction fee, paid in ETH, is known as 'gas.'

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