Crypto Investing
3 Feb 2022

Top ERC-20 Projects to Follow in 2022

Akumbenla Jamir

Understanding ERC-20 Tokens

The ERC-20 token is one of the most important Ethereum tokens. They are sets of ‘fungible’ digital tokens that live on the Ethereum network. Every token in the set is indistinguishable from one another, hence the term ‘fungible’.

For the uninformed, Ethereum Blockchain can host other dependable tokens apart from its native crypto coin, Ether.

ERC-20 emerged as the technical standard; it is used for all smart contracts on the Ethereum blockchain for token implementation and establishes a set of rules that must be followed by all Ethereum-based tokens.

Key Takeaways

  • An ERC20 token is a standard used for creating and issuing smart contracts on the Ethereum blockchain.
  • ERC-20 is one of the best blockchain protocols. It is in charge of thousands of Ethereum-based tokens.
  • A smart contract must stick to certain rules or ERC standards. 
  • Many popular digital currencies use the ERC-20 standard – Chainlink, Tether, Maker, Status, Loopring. 

Characteristics of ERC-20

If a smart contract wants to use the ERC-20 token, it must adhere to certain rules or ERC standards. If a token breaks the rules, it won’t be called an ERC-20 token. There are currently nine rules, six of which are mandatory and three are optional. 

The mandatory standards

  1. totalSupply: This section outlines the total supply of a token. Meaning that developers or creators must first determine the total amount of supply of the token before creating it.
  2. BalanceOf: This function provides information about the balance of the owner’s account. To simplify, it serves as user information. So if you created a token and sent it to multiple addresses, you can use this to see how many tokens you still maintain.
  3. Transfer: This function is in charge of transferring a specific number of tokens to a specific address. In other words, it transfers ownership of a token from one user to another.
  4. transferFrom: The transferFrom function is used when an address with an allowance wants to transfer the balance from one address to another. This transferFrom is basically for automating certain transactions.
  5. Approve: If the user wishes to withdraw a certain number of tokens from the specified account, this function comes in handy. If an address has a balance, then it can use the approve function to allow a specific amount of its balance to be spent by another address.
  6. Allowance: The most important function is the allowance function. When the contract wants to carry out a transaction, it must first check the balance of the Ethereum smart contract to see if the user has the required minimum balance. The contract can carry out the transaction or even cancel it using the allowance function.

The optional standards

  1. Token name: When you create your very own ERC-20 token list, it’s quite important to have a name or identity associated with that token.
  2. Divisibility: It is important to ensure the lowest value for your token. If the divisibility is zero, the lowest value is one; if it is two, the lowest value is 0.01. You can go up to 18 decimal places in this case.
  3. Symbol: Assigning a symbol to your ERC-20 token will help create brand value.  

While these are important elements while creating a token, they are not mandatory like the above functions.

Many cryptocurrency newcomers will be surprised to learn how common ERC-20 tokens are. For example, if you look at a list of the top 100 currencies by market capitalization, you’ll notice that many renowned currencies use the ERC20 standard. Check out the popular ERC-20 projects in 2022.

ERC-20 Projects to Follow in 2022  

Here are the top five ERC-20 tokens to watch out for in 2022:

Chainlink (LINK)

Sergey Nazarov created Chainlink in 2017 as an oracle network to improve Ethereum smart contracts by integrating real-world data into online systems. Simply put, Chainlink is a data provider for Oracle that uses LINK as its native currency.

One factor that raises the value of LINK is the use of smart contracts. The greater the use of smart contracts, the higher the value of LINK. The cryptocurrency’s value has doubled, reaching an A.T.H. of $52.70 in May 2021. The total supply of LINK tokens is one billion, and its current market capitalization is around $12B.

Tether (USDT)

Tether (USDT) is a cryptocurrency whose tokens are backed by an equivalent amount of US dollars in circulation, making it a stablecoin with a price pegged to $1.00. Tether is the first stablecoin to be created, and it is the most popular one used in the crypto market. It was created to provide users with stability, transparency, and low transaction fees by bridging the gap between fiat currencies and cryptocurrencies.

Tether tokens are the native tokens of the Tether network and trade under the USDT symbol. They were created by the crypto exchange BitFinex. USDT is the third-largest cryptocurrency and the largest stablecoin by circulation and market capitalization. 

Want to buy Tether directly in India? Check out the CoinSwitch website!

Maker (MKR)

Maker (MKR) is a decentralised ERC-20 token that represents an investment into the Maker Project. MakerDAO created MKRwith the primary goal of supporting the stability of MakerDAO’s DAI token and enabling governance for the Dai Credit System. MKR is the native cryptocurrency of the MakerDAO ecosystem, and MKR holders make critical decisions about the system’s operation and future. 

MakerDAO is regarded as the first decentralised finance (DeFi) project in the world. It is a lending and borrowing platform that eliminates the need for middlemen.

Maker (MKR) is the 65th largest cryptocurrency globally by market cap. 

Popular ERC-20 Projects

 

Status (SNT)

Carl Bennetts and Jarrad Hope founded the Status network. It is a mobile Ethereum operating system with the goal of making Ethereum more accessible to the general public. This open-source platform, based on the Ethereum blockchain, allows smartphone users to securely browse, chat, and make payments on the decentralised web. Smart contracts also allow developers to create decentralised applications (dApps).

The Status Network Token, or SNT, is the native currency on the platform. The current circulating supply of Status or SNT is at 3,470,483,788 SNT, and there is no maximum supply for this token. 

Loopring (LRC)

Loopring is an Ethereum-based decentralised exchange and open protocol. It’s intended to provide traders and institutions with a decentralised, automated trade execution system that executes trades across crypto exchanges while reducing trading costs and mitigating counterparty risk.

Daniel Wang, a former Google software engineer, founded the project in 2017. Loopring (LRC) was launched in August 2017 with an initial coin offering (ICO). 

Loopring aims to reward all ecosystem participants for keeping the decentralised and non-custodial exchange going. It performs all computation off-chain and uses zero-knowledge proofs to maintain trustless trading to address the main issues with on-chain exchanges, such as throughput, speed, and high transaction fees.

Why ERC- 20 Projects are Popular

The crypto tokens discussed above are based on Ethereum’s best features like smart contracts, decentralised finance, and metaverse capabilities. Ethereum, being one of the most popular and the second biggest cryptocurrency in the market, contributes to the popularity of ERC- 20 projects. 

Let’s look at some of the best traits of ERC-20 that makes it a crowd favourite: 

  1. Transactions are quick, efficient, and global,
  2. Interaction complexity is reduced,
  3. The likelihood of a smart contract being broken is low,
  4. Upsurged token liquidity,
  5. The revenue of the ERC-20 token is high because it is well-known and widely used,
  6. The ERC-20 token is extremely simple to create.

ERC-20 tokens have already gained a lot of traction in the blockchain community and have piqued the interest of many startups and entrepreneurs. They are cost-effective and easy to create for developers. In addition, Ethereum smart contracts are built within this ERC-20 token for secure transactions. ERC-20 is also deployed with a blockchain-based crypto wallet to store and insure the token’s safety.

Buy ERC-20 tokens starting with just ₹100

Wrap-Up

ERC-20 is one of the best blockchain protocols. It is in charge of thousands of Ethereum-based tokens. According to the most recent data, as of December 2020, there have been 829 projects based on the ERC-20 token standard along with 3,50,000 token contracts. In addition, it is by far one of the most popular standards used for the creation of dApps and other tokens.

Experts believe that the future of ethereum and ERC-20 standards is bright, which is evident from the increase in the price of Ether and other ERC-20-backed tokens. However, if you’re an investor looking to hold tokens for yourself, we advise caution when investing. Remember, proper research can save heartache in the future!

Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.

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Akumbenla Jamir

Content Writer

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