ERC-20 is a technical standard used for creating and issuing smart contracts on the Ethereum blockchain. It defines a set of rules that tokens must follow, ensuring compatibility with various wallets and exchanges. This standard allows developers to create their own tokens that can easily interact with other applications within the Ethereum ecosystem. Tokens created under the ERC-20 standard can represent various assets, such as currencies, loyalty points, or even real estate. By adhering to these guidelines, developers can ensure that their tokens are easily tradable and usable, fostering a vibrant marketplace for digital assets on the Ethereum network.