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ERC-20 Tokens: The Ethereum Token Standard

ERC-20 Tokens: The Ethereum Token Standard

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As we mentioned earlier, there are different types of blockchains. Depending on the class, they may have different tokens attached to them. In this article, we will further explore the ERC-20 token standard and look at some of them.

What are ERC-20 tokens?

What are ERC-20 tokens?

Simply put, ERC-20 tokens are standard tokens used on the Ethereum chain. Ethereum is not just a blockchain like Bitcoin; it’s a platform. It provides an opportunity for other tokens to ride on top of it. In addition, dApps can be built on top of it with smart contracts.

Over time, ETH became the second largest network, and as the popularity of the project became clear, programmers developed a way for different smart contracts to interact with each other. As a result, they created ERC-20 tokens, which became the final standard, a set of rules that make it easier for contracts to interact. Since the ERC-20 token standard was completed, more than 500,000 tokens have been issued with it.

The ERC-20 token standard allows developers to create their own tokens on the Ethereum network. Many companies have launched their own tokens because the network allows them to easily develop blockchain products instead of launching their own cryptocurrency. Some tokens, such as Uniswap’s UNI, remain ERC-20 tokens, while other cryptocurrencies, such as EOS or Tron, have since been moved to their own blockchains.

ERC-20 Tokens: Features

Standard IDs of this type have the following properties:

  • Interchangeable: The code for each individual ID is the same as any other ID, although the transaction history can be used to identify and distinguish between those IDs.
  • Transferable: They can be sent from one address to another.
  • Fixed supply: A fixed number of tokens must be created to prevent developers from issuing more tokens and increasing the supply.

List of ERC-20 Tokens

Let’s take a look at the top 10 tokens used in Ethereum. They are sorted by market capitalization starting with Ethereum. Here is your list of ERC-20 tokens.

Ethereum (ETH)

Ethereum is an open source decentralized software platform based on blockchain technology. It has its own native cryptocurrency called Ether (ETH) with a market cap of $156.1 billion. Ethereum is Bitcoin’s main competitor.

Cryptocurrency researcher and Ethereum founder Vitalik Buterin first described Ethereum in a 2013 proposal to add a scripting language for programming to Bitcoin. The development of Ethereum was funded through an online crowdsale, which is crowdfunding through the issuance of cryptocurrency tokens, and the project went online on July 30, 2015.

As we mentioned earlier, Ethereum allows developers to build decentralized applications. Miners produced Ether tokens and paid usage fees on the Ethereum network. However, Merge, the long-awaited update that promised to cut Ethereum’s huge energy consumption, has instead pushed miners to use other cryptocurrencies. The platform also supports smart contracts, which are a type of digital contract.

Shiba Inu (SHIB)

With a market cap of $6.3 billion, Shiba Inu (SHIB) is the first popular dog coin that followed Dogecoin, one of the first funny meme coins. Unlike Dogecoin (DOGE), it does not run on its own blockchain: SHIB is an ERC-20 token that runs on top of Ethereum (ETH). The developers of the token transferred 50% of its liquid reserve to Vitalik Buterin.

Currently, Shiba Inu (SHIB) is the only meme cryptocurrency that supports a “real” DeFi ecosystem with an NFT incubator and marketplace, a cropping module, and decentralized ShibaSwap.

Wrapped Bitcoin (WBTC)

With a market capitalization of $4.7 billion, Wrapped Bitcoin (WBTC) is a modified version of Bitcoin that can be used in Ethereum’s growing network of decentralized applications.

The WBTC token was built using Ethereum’s ERC-20 token standard to provide Bitcoin liquidity to the DeFi ecosystem. Cryptocurrency users who only owned Bitcoin, previously unable to access and use DeFi dApps built on the Ethereum protocol, can take advantage of the greater market capitalization and trading volume of the Bitcoin community with WBTC Ethereum tokens. You can read more about this token in one of our articles – “What is Wrapped Bitcoin WBTC and other wrapped coins?”.

Uniswap (UNI)

UNI’s market capitalization is $4.2 billion. It is the token of an Ethereum-based decentralized exchange called Uniswap. It is an administrative token, so the owners can participate in decisions about the management of the platform. Uniswap released its token in September 2020.

Uniswap (UNI) has a current token supply of 1,000,000,000 UNI. All these UNI IDs will be available within four years. After four years, when all these tokens have been distributed, Uniswap will introduce a 2% annual inflation rate to maintain participation in the network. 60% of the supply of 1 billion UNI tokens was released to members of the Uniswap community (ETH addresses that had been actively trading with the Uniswap protocol). The remaining 40% will be distributed to team members, investors and advisors according to a 4-year plan.

Chain link (LINK)

With a market cap of 3.3B, Chainlink’s LINK token is an ERC677 token, which is an extension of ERC20. Chainlink is a decentralized oracle network. External data providers who share the work online are called “oracles”. These oracles allow Chainlink smart contracts to receive accurate data from external (non-blockchain) sources such as any API and some other external data feeds.

LINK is an ERC-20 token used to pay for this oracle service and ensure accuracy on the Chainlink network. First created in 2017, the token provides accurate external data to blockchains. Although Chainlink originates from Ethereum (ETH), it is designed to work on any blockchain with smart contract functionality.

Polygon ERC20 (MATICERC20)

MATIC is a popular ERC-20 token with a market cap of $1.6 billion. The Polygon ERC20 token is an Ethereum-based altcoin that powers the Polygon network. As the Ethereum blockchain regularly experiences large transactions, this has caused the network to become congested, leading to lower performance and higher transaction fees. Polygon aims to improve the user experience by providing a Layer 2 (L2) scaling solution for the Ethereum blockchain.

Using smart contracts, Ethereum can be converted back and forth to Polygon ERC20 coins, enabling a scalable Ethereum ecosystem. Polygon was originally launched as the Matic network in 2017. It uses sidechaining to improve scalability. In February 2021, the Matic network was renamed Polygon and relaunched as a platform for building interconnected Ethereum-based blockchain networks.

Maker (MKR)

Currently, the market value of the MKR token is 617.5 million dollars. Maker coin (MKR) is a cryptocurrency native to the Maker platform. It works alongside another coin on the same platform – Dai, a decentralized stablecoin based on the Ethereum blockchain. Dai stablecoin was launched in December 2017.

Dai aims to fix the problems associated with the volatility of standard cryptocurrencies, which prevent them from becoming mainstream means of payment. Author coins act as governance tokens that guarantee their owners the right to vote on all important decisions related to the platform. These include risk management, paying Dai loans or setting a debt ratio. If a crypto user wants to take a loan Dai, the Maker coin is used to pay the corresponding 1% interest.

Basic Attention Token (BAT)

The BAT token, which has a market capitalization of $452.2 million, is associated with a fully functional browser called Brave. It is a brand that aims to reward both users and advertisers. Users watch ads and get paid accordingly, while content creators get paid based on how much user attention they get. BAT is a way to monetize attention in what is sometimes called the “attention economy.”

BAT’s rewards feature is only available on the privacy-focused Brave web browser. This useful tool blocks third-party ads and trackers by default and is integrated with Tor, the infamous Dark Web browser. BAT is also used to buy advertising space and tip content creators on Brave.

Compound (COMP)

The COMP token, with a market capitalization of $432.4 million, kicked off the “Summer of DeFi” in May 2020 with its COMP token liquidity mining program. All users who participated in this program were rewarded for borrowing and lending in the form of COMP tokens.

Users can earn COMP when lending or borrowing cryptocurrencies on the Compound platform. This is because borrowing and lending cryptocurrencies results in users earning COMP Tokens, which allow them to earn a higher percentage of COMP’s APY. With precise calculations, users are basically paid for taking out a loan.

Rotation (LRC)

Loopring’s market capitalization is $405.5 million. LRC cryptography is an Ethereum Layer-2 scaling protocol that allows the construction of decentralized hubs that compete with a centralized hub in terms of performance. Loopring (LRC) was founded in 2017, and the initial coin offering (ICO) for Loopring took place in August 2017, raising $45 million. However, most of the funds raised were returned to ICO participants due to China’s tightening regulations. The remainder was used to develop the protocol by the Shanghai-based non-profit Loopring Foundation.

In December 2019, the protocol switched from Loopring 2.0 to Loopring 3.0, resulting in almost 1000 times the efficiency. It also partnered with Bitcoin to integrate oracles that same month. After trying to find third parties to build DEXs on its protocol, Loopring launched its own decentralized exchange in February 2020. The non-custodial Loopring Exchange is based on both an order book and automated market maker (AMM) trading, and also serves as a payment application.

Conclusion

ERC-20 tokens are widely used and as long as Ethereum is strong, they have every chance to succeed. If anything, their biggest threat is the enemy within the new Ethereum standards. Only the most innovative tokens can win the crypto race.

Where to buy ERC-20 tokens?

StealthEX is here to help you buy the most popular ERC 20 tokens. You can do this privately without having to register for the service. Our crypto collection has more than 600 different coins and you can make wallet-to-wallet transfers instantly and without problems.

Just go to StealthEX and follow these easy steps:

  1. Select the pair and the amount you want to exchange. For example BTC ETH.
  2. Press the “Start exchange” button.
  3. Enter the recipient’s address to which the crypto will be transferred.
  4. Process the event.
  5. Receive your crypto coins.
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Don’t forget to do your own research before buying crypto. The views and opinions expressed in this article are solely those of the author.

Tags: the ERC-20 ETH Ethereum Token of the crypto world



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