Implementing ERC20 and Ether Transfer Monitoring on Ethereum

Monitoring token and Ether transfers on the Ethereum blockchain is a critical capability for decentralized applications, wallets, exchanges, and blockchain analytics platforms. Whether you're tracking user deposits, auditing smart contract interactions, or building real-time financial dashboards, understanding how to efficiently listen to ERC20 and native ETH transfers is essential.

This guide walks through practical implementations using Web3.js and reliable node providers, focusing on scalability, accuracy, and performance—without the need to run expensive local infrastructure.

Monitoring ERC20 Token Transfers

ERC20 tokens are the backbone of Ethereum’s token ecosystem, powering everything from stablecoins like USDT and USDC to governance tokens and utility tokens. To monitor transfers of these tokens, we rely on blockchain event logs, specifically the Transfer event emitted by all compliant ERC20 contracts.

Key Tools and Setup

To begin monitoring ERC20 transfers, you'll need:

A Web3 provider (such as Alchemy or a custom Geth node)
The Web3.js library
Basic knowledge of Ethereum event logs and ABI decoding

While running your own archival full node gives full control, it requires significant resources—over 6TB of storage as of early 2025—and ongoing maintenance. For most developers, using a managed service like Alchemy provides a cost-effective alternative with WebSocket support and high availability.

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Listening via Event Logs

The most scalable method for tracking ERC20 transfers is querying past logs using eth_getLogs. This approach allows you to scan specific blocks for Transfer events across all ERC20 contracts.

Each ERC20 contract emits a Transfer(from, to, value) event with the following signature:

0xddf252ad1be2c89b69c2b068fc378daa952ba7f163c4a11628f55a4df523b3ef

Here’s an example implementation in Node.js:

const Web3 = require('web3');
const Decimal = require('decimal.js');
const abiDecoder = require('abi-decoder');

const EVENT_TRANSFER = '0xddf252ad1be2c89b69c2b068fc378daa952ba7f163c4a11628f55a4df523b3ef';

const ERC20_TRANSFER_EVENT_ABI = [{
  "anonymous": false,
  "inputs": [
    { "indexed": true, "name": "src", "type": "address" },
    { "indexed": true, "name": "dst", "type": "address" },
    { "indexed": false, "name": "wad", "type": "uint256" }
  ],
  "name": "Transfer",
  "type": "event"
}];

abiDecoder.addABI(ERC20_TRANSFER_EVENT_ABI);
const web3 = new Web3(`wss://eth-mainnet.ws.alchemyapi.io/v2/YOUR_API_KEY`);

async function getErc20TransfersByBlock(blockNumber) {
  const blockLogs = await web3.eth.getPastLogs({
    fromBlock: blockNumber,
    toBlock: blockNumber,
    address: null,
    topics: [EVENT_TRANSFER]
  });

  const transfers = [];
  for (const log of blockLogs) {
    const decodeData = abiDecoder.decodeLogs([log])[0];
    const from = decodeData.events[0].value;
    const to = decodeData.events[1].value;
    const rawValue = new Decimal(decodeData.events[2].value);
    
    // Note: You must fetch token decimals separately (e.g., via contract call)
    const decimals = await getTokenDecimals(log.address); 
    const value = rawValue.div(Decimal.pow(10, decimals));

    transfers.push({ from, to, value: value.toString(), contract: log.address });
  }
  return transfers;
}

// Poll latest blocks continuously
(async () => {
  let latestBlock = await web3.eth.getBlockNumber();
  while (true) {
    const currentBlock = await web3.eth.getBlockNumber();
    if (currentBlock > latestBlock) {
      for (let number = latestBlock + 1; number <= currentBlock; number++) {
        const transfers = await getErc20TransfersByBlock(number);
        console.log(`Block ${number}: ${transfers.length} transfers`);
        // Process or store transfer data
      }
      latestBlock = currentBlock;
    }
    await new Promise(resolve => setTimeout(resolve, 1000));
  }
})();

Note: Always retrieve the decimals value dynamically from each token contract to ensure accurate display of token amounts.

Tracking Native Ether Transfers

Unlike ERC20 tokens, native Ether transfers are not based on smart contract events. Instead, they occur through four types of transactions:

External Transactions – Direct ETH transfers between EOA accounts
Internal Transactions – ETH sent via smart contract execution
Coinbase Rewards – Mining/block rewards
Selfdestruct Payouts – ETH released when a contract self-destructs

Only external and internal transactions are typically relevant for monitoring user activity.

Capturing Internal Transactions

Internal ETH transfers require access to transaction traces, which are only available on archival full nodes that store complete state history. These nodes must be configured with:

syncmode=full
gcmode=archive

Due to their massive storage requirements (6+ TB), most projects use third-party providers such as Alchemy or Infura that expose trace APIs.

You can retrieve internal transactions using the trace_transaction method:

web3.currentProvider.send({
  method: "trace_transaction",
  params: [
    '0x42b6ab2be4975708f70575fc7953d11692c84a4a19c5c8eec65c582870a4e85e',
    {
      disableStack: true,
      disableMemory: true,
      disableStorage: true
    }
  ],
  jsonrpc: "2.0",
  id: "2"
}, (err, res) => {
  if (!err && res.result) {
    res.result.forEach(trace => {
      if (trace.action.value && parseInt(trace.action.value) > 0) {
        console.log(`Internal transfer: ${trace.action.from} → ${trace.action.to}, Value: ${web3.utils.fromWei(trace.action.value, 'ether')} ETH`);
      }
    });
  }
});

Ensure the transaction receipt status is true before processing traces to avoid including reverted executions.

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Frequently Asked Questions

How do I get real-time ERC20 transfer notifications?

Use web3.eth.subscribe('logs') with the Transfer event topic. This WebSocket-based subscription pushes new events instantly as they appear on-chain.

Can I monitor all ERC20 tokens without knowing their addresses?

Yes. By leaving the address field null in eth_getLogs, you retrieve transfer events from all ERC20 contracts across the network.

Why do I need an archival node for internal transactions?

Regular nodes prune old state data. Archival nodes preserve every state change, enabling reconstruction of internal operations via debug tracing tools.

How can I reduce costs when monitoring large volumes of transfers?

Leverage scalable infrastructure like Alchemy or OKX’s Web3 API suite. These platforms offer rate-limited but affordable access to archival data without managing hardware.

Is there a way to verify if a transaction involved both ERC20 and ETH transfers?

Yes. Combine log filtering (eth_getLogs) with trace analysis (trace_transaction). A single transaction can emit ERC20 events and trigger internal ETH movements.

What are common use cases for transfer monitoring?

Wallet apps track deposits, exchanges verify incoming funds, DeFi dashboards analyze user behavior, and compliance tools detect suspicious flows.

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Core Keywords

Ethereum transfer monitoring, ERC20 event listener, listen to ETH transfers, blockchain event tracking, Web3.js logs, internal transaction tracing, real-time Ethereum data, Ethereum archival node

By combining efficient event querying with trace-based analysis and leveraging cloud-based node services, developers can build robust systems for tracking both token and native currency movements—ensuring responsiveness, accuracy, and scalability in modern Web3 applications.