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Update builders/interoperability/xcm/xc20/overview.md
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Co-authored-by: albertov19 <[email protected]>
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themacexpert and albertov19 authored Feb 4, 2025
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Expand Up @@ -29,7 +29,7 @@ Note that, post-RT2301, creating a local XC-20 is equivalent to simply deploying

### What are External XC-20s? {: #external-xc-20s }

External XC-20s are cross-chain tokens originating from another parachain or the relay chain, and they are represented on Moonbeam as ERC-20 tokens. The original tokens remain locked in a sovereign account on their home chain, while the wrapped ERC-20 representation can be freely utilized on Moonbeam. A sovereign account is a keyless account governed by Moonbeam’s runtime—rather than an individual—that can hold assets and interact with other chains. When you transfer external XC-20s, the canonical assets remain in the sovereign account on their source chain, while the ERC-20 representation is what circulates on Moonbeam.
External XC-20s are cross-chain tokens originating from another parachain or the relay chain, and they are represented on Moonbeam as ERC-20 tokens. The original tokens remain locked in a Moonbeam sovereign account on their home chain, while the wrapped ERC-20 representation can be freely utilized on Moonbeam. A sovereign account is a keyless account governed by a blockchainruntime—rather than an individual—that can hold assets and interact with other chains. When you transfer external XC-20s, the canonical assets remain in the sovereign account on their source chain, while the ERC-20 representation is what circulates on Moonbeam.

External XC-20s all have _xc_ prepended to their names to distinguish them as cross-chain assets. For example, DOT, native to the Polkadot relay chain, is known as xcDOT when represented as an XC-20 on Moonbeam.

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