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What is ERC20? Top Ethereum ERC-20 Tokens 2022 [by Market Cap]

ERC 20 Wallets

The cryptoworld might seem difficult to anyone who is new to the crypto space. The crypto world might also seem more confusing to those who lack expert technical knowledge about blockchain technology and smart contracts. The possibilities and potential that this industry has, has seen the participation of many new investors. 

It is important to understand the technical properties of any digital currency be it bitcoin, ethereum, litecoin, etc to make a sound decision while investing. One of the most intriguing and major concepts that govern the crypto space and is especially related to smart contracts and smart property is, what is known as ERC20 and the significance of this standard for ethereum. 

The scripting standard that is used in the ethereum platform, parent platform of ether, is called ERC20. These technical standards are created using the Ethereum network. 

What is Smart Contract? 

A smart contract is a self-executing contract that automatically executes the terms set between the buyers and sellers. The agreement is written with the help of lines of codes that execute themselves at the predefined time. This code along with the contract is present on the decentralized blockchain network. The transactions are tracked and executed with the help of this code. Click for more details on what are smart contracts.

What is ERC20? 

ERC20 is one of the most important ethereum tokens. ERC20 is nothing but the technical standard set for every token backed by an ethereum network. It is required for all the smart contracts used on the ethereum blockchain. It is essential for the implementation of the Ethereum tokens since it defines the set of rules for all these tokens. 

ERC20 tokens are blockchain technology-based assets that have a certain value and can be received or sent. The only difference is that these tokens do not have their blockchain technology and run on the Ethereum network. These tokens are very similar to Bitcoin, litecoin, ether, and other cryptocurrencies. 

New investors and crypto enthusiasts often confuse ether and ERC20. However, they are completely different entities. While Ether is the native token of the ethereum blockchain, ERC20 is the set of standards on which the ethereum blockchain runs. This standard can be used by others to create other tokens like ether having their value. 

This token standard is specific to fungible tokens. ERC20 does not offer standards for non-fungible tokens. Therefore, only ERC20 tokens can be exchanged with one another. The smart contracts backed by these standards are used to initiate the payment. 

6 Rules defined by ERC20 standard 

Total Supply 
BalanceOf
Transfer 
TransferFrom 
Approve
Allowance 

There are certain functions that a token built on these standards can perform: 

  1. Total Supply: This section provides information about the total supply of tokens. 
  2. BalanceOf: This function provides information about the balance of the owner’s account. 
  3. Transfer: This function is responsible for transferring a specified number of tokens to a particular address. 
  4. TransferFrom: This function acts as the vehicle to transfer the specified tokens from a particular address. 
  5. Approve: If the user wishes to withdraw a certain number of tokens from the specified account, this function comes in handy. 
  6. Allowance: This function plays a pivotal role in returning a certain number of tokens from the spender to the owner. 

These functions are capable of triggering the other two events of transfer and validation. Transfer event takes place whenever there is a transfer of tokens while the validation event takes place when approval is required. 

Today, ERC20 tokens are available to invest in via crypto investment app such as CoinDCX

TOP Ethereum ERC-20 TOKENS 2022 by Market Capitalization

ERC20 tokens are ubiquitous for many crypto newbies. Here is the list of the top ERC20 tokens by market capitalization that all the crypto investors have their eyes on.

ERC-20 Projects

PROJECT IN BRIEF 

ERC-20 TOKEN

MARKET CAP 

POLYGON Polygon network is a sidechain based on the Ethereum network that tries to solve Ethereum’s existing scaling issues and lower the load on the Ethereum network. MATIC $7.66 billion
DAI DAI is a ERC-20 based decentralised stablecoin built by the MakerDAO to serve as a stablecoin with no central authority issuing it while also at the same time to enable crypto loans. DAI $7.01 billion
UNISWAP Uniswap is the largest decentralised exchange (DEX) by exchange trading volumes and works on the principle of AMMs, or automated market makers. UNI $4.7 billion
CHAINLINK  Chainlink is a blockchain network that enables other blockchain based smart contracts to interact with external data in a decentralised manner. LINK $3.4 billion
APECOIN APE is basically a ERC-20 token used primarily for governance on the BAYC metaverse called Otherside, which is now governed by a DAO. APE $1.47 billion

1. POLYGON (MATIC)

Earlier known as the MATIC Network, it is an Ethereum token that powers the Polygon network – a scaling solution for Ethereum. Polygon’s main mission when it was started was to provide faster and cheaper transactions on the Ethereum blockchain network using layer 2 sidechains – which are basically blockchains that run alongside the Ethereum main chain.

Polygon enables users to deposit Ethereum tokens to a Polygon smart contract, interact with them within the Polygon ecosystem and then later withdraw them back to Ethereum main chain. The MATIC token is used to pay transaction fees and participate in proof-of-stake consensus.

Additional Read: MATIC Price Prediction

2. DAI

DAI is a decentralised stablecoin that aims to maintain a stable 1:1 value against the US dollar. It is built on the Ethereum network and is thus an Ethereum ERC-20 token that runs on the blockchain. And unlike most of the other stablecoins like Tether and USD Coin, which are albeit more popular and have a larger market capitalisation, Unlike Tether and the majority of other major stable crypto, DAI is decentralised, which means that no centralised organisation controls the supply of new DAIs in circulation.

It is run by a decentralised autonomous organisation (DAO) called the MakerDAO and back in 2017 DAI was launched on Maker Protocol through a smart contract on the Ethereum blockchain. The objective behind DAI was not simply to make a decentralised stablecoin but also one that can be used to take out loans with other cryptos as collateral.

Additional Read: Top DAO Projects

3. UNISWAP (UNI)

Uniswap is a crypto exchange which uses a decentralised network protocol. Uniswap is the name of the company that initially built the blockchain network to perform this function. This protocol processes trade transactions in a decentralised and automated manner through the use of smart contracts.

The Uniswap DEX employs the use of an automated market maker (AMM), meaning that it uses decentralised liquidity pools which are powered by smart contracts

At one point back in 2020, amid the initial bull run the broader crypto market – Uniswap had grown very rapidly to become the largest decentralised crypto exchange and the fourth largest crypto exchange overall, in terms of trading volumes. Thus, Uniswap was and still is the largest decentralised exchange (or DEX) operating on the Ethereum blockchain. Its native token is Ethereum ERC-20 token called UNI and UNI holders can earn rewards and participate in governance of the Uniswap network and its functioning.

Very recently, it announced that its community members have successfully voted to establish the Uniswap Foundation, dedicated to supporting developers in the protocol and reducing friction in the governance.

Additional Read: Top Crypto Projects 2022

4. CHAINLINK (LINK)

Chainlink is an extremely popular blockchain network that enables smart contracts based on other blockchains to receive data from outside the blockchain securely and in a decentralised manner. Its native crypto token is LINK. It essentially works as an intermediary based in code that connects blockchain based smart contracts with external data, which could be anything from interest rates to stock prices.

LINK is the ERC-20 token that is used to reward those network operators who help make this happen in a decentralised manner and collateralises the network’s smart contract agreements. 

Back in July 2022, Chainlink even took to Twitter to share its performance over the last quarter. It mentioned that it had grown to support over a thousand decentralised oracle networks and powered over 1350 projects running on 12 different blockchain networks. The oracle network also stated that it delivered over 3,000,000,000 data points on the chain and served over 7,000,000 randomness requests.

5. APECOIN (APE)

ApeCoin ERC-20 Token, one of the latest entrants in the crypto metaverse and NFT space. It was airdropped to BAYC holders back on 17 March, 2022 and since then has taken the space by storm and has become the top metaverse token in the crypto market as of writing, according to market cap.

Soon after it was launched, the creator of Bored Ape Match Club NFT collection, Yuga Labs announced that it is launching a metaverse crypto project that would run with the ApeCoin token. 

APE is basically a ERC-20 token used primarily for governance on the BAYC metaverse called Otherside, which is now governed by a DAO and anyone holding the coin is allowed to cast their vote on the relevant governance decisions.

Very recently, prominent artists Eminem and Snoop Dogg launched a song with their own collection of BAYC NFTs which went pretty viral.

Price as of 2nd September, 2022

 

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