ERC20 tokens are digital assets created on the Ethereum blockchain using the ERC20 standard, which defines core functions like transferring tokens, checking balances, and approving transfers. This standard allows for predictable development of new tokens and cross-compatibility between applications. ERC20 tokens can power a variety of projects like cryptocurrencies for apps, voting systems, asset tokenization, and more. The Ethereum platform and its ERC20 standard provide developers with tools to build innovative decentralized applications and networks.