Reading Between the Bytes: A Real Guide to ERC‑20, NFTs, and Verifying Smart Contracts
Why do ERC‑20 tokens still trip people up? I’ll be honest — I used to fumble through token approvals and transfers for months. Whoa! My instinct said the problem wasn’t the wallet; it was how I read transaction details. Initially I thought token balances were just numbers, but then I realized the story is in the logs and the contract’s source code. Okay, so check this out—ERC‑20 looks simple on paper. It has functions like transfer, approve, and transferFrom which sound straightforward. Really? But when you actually watch a token transfer on-chain, there are nuances: allowances, events, and sometimes hooks that call other contracts. On one hand it’s elegant; on the other hand devs keep adding custom behavior that breaks expectations. Actually, wait—let me rephrase that: the standard is stable, but implementations vary wildly and that variance is what trips users up. Here’s what bugs me about generic how‑to posts: they show a screenshot of a “Balance” and call it a day. Hmm… that’s barely useful. Something felt off about trusting a single number without checking the token contract’s code. So I started using explorers the way I use a debugger—step by step—because smart contracts are just code running with public inputs and outputs. At the very smallest level, when you inspect an ERC‑20 transfer you should look at three things. First: the transaction input (what function was called and what parameters were passed). Second: the logs/events (Transfer events, Approval events). Third: the token contract itself (source verified? what does the code actually do?). There’s your roadmap. And yes, not all explorers present this equally clearly. How I use the etherscan block explorer every day For me the explorer becomes less of a diagnostic tool and more like a narrative reader: who called whom, when, and for how much. Seriously? I click into a transaction and I read like I’m trying to catch a lie. First glance for the “Method” used. Then I expand logs. Then I open the contract tab and—if it’s verified—read the code. If it’s not verified, alarms go off; that’s a pattern that repeats. One tip that saved me a ton of time: search for Transfer events instead of trusting balance updates. Transfer events are emitted by ERC‑20s and ERC‑721s and they give you the real on‑chain history. Medium‑sized tokens sometimes do internal bookkeeping that doesn’t emit events in the way you expect. So you have to look both at events and at state reads directly from the contract. On top of that, some tokens implement quirks—taxes, blacklists, rebase mechanics—so the transfer amount in your wallet could differ from the amount actually moved on‑chain. When I suspect a token is doing somethin’ funky, I look at allowance flows next. Approve and transferFrom sequences are where many rug pulls or accidental drains happen. If a smart contract asks for an infinite approval, that’s not automatically malicious, but it should raise a flag. Think about the worst‑case: a compromised contract could call transferFrom and drain funds. On the flipside, some DeFi UX requires broad approvals for gas efficiency, so context matters. Another practical habit: snapshot the token contract’s constructor parameters and public variables. Constructor arguments can reveal who controls certain admin roles. Public variables may expose fee recipients and percentages. These are clues you can fact‑check against the project’s docs or Discord posts. If you see an owner address that matches a known exchange or a multisig, that’s comforting. If you see a single EOAs with all the privileges, well… be cautious. Verifying source code is the single most empowering action. Whoa! If a contract is verified, you can audit it yourself in a basic way: search for suspicious functions like _mintTo, emergencyWithdraw, or arbitrary delegatecalls. Even if you’re not a formal auditor, reading for keywords often surfaces tricks. And when contracts are not verified, you have to assume the worst or rely on third‑party audits, which are not infallible either. Oh, and gas profiles matter too. Long transactions with repeated internal calls can indicate complex logic like fee distribution or liquidity provisioning. Those internal calls will show up in the “Internal Txns” tab on many explorers. I run through these to see where value actually flows, because the apparent destination in the top line isn’t always the final resting place. Here’s a small checklist I follow before interacting with a token: Verify the contract source. If unverified, proceed very cautiously. Read Transfer logs for recent activity. Are tokens moving to exchanges or burn addresses? Inspect allowances. Any infinite approvals? Who holds the largest balances? Search for admin functions and ownership transfers. Who can pause or mint? Cross‑reference project claims with on‑chain behavior. Do they match? And yes, I’m biased toward tooling that shows all of that in one place. That’s why I rely on a trusted explorer for quick triage—because it stitches those pieces together for me. If you’re using the right features, the explorer becomes your magnifying glass. The etherscan block explorer is one of those tools I check first; it’s not perfect, but it’s comprehensive and it surfaces most of what I need when I’m tracking tokens or verifying contracts. Now about NFTs: the same principles apply but with a slightly different lens. Instead of Transfer events showing fungible token movements, you’re looking for tokenId history, minting patterns, and metadata sources. NFTs often rely on off‑chain metadata hosted on IPFS or centralized servers. If metadata URIs point to mutable centralized URLs, that’s a red flag for longevity. Repeated or mass mints by the same address can indicate a pre‑minted supply rotated through a few wallets. Smart contract verification for NFTs also includes checking royalty mechanics and owner‑only mint functions. Some collections hide backdoors that allow creators to mint more later. On one hand that can be an intended feature; though actually, it’s deceptive if it wasn’t disclosed. So again—read the code, and when in doubt ask the creators for clarification or a third‑party audit link. I’ll be blunt: there’s no single click that guarantees