Ethereum ($ERC) is one of the most popular blockchains on the planet. This smart-contract network is valued at around half a trillion dollars and hosts over 3,500 decentralized applications. Each project has its own unique token and ecosystem that is not tied to the price of ether.
In fact, some of the largest crypto projects were developed on Ethereum. They’re based on different Ethereum requests for comment (ERC) standards, the most popular of which is ERC-20.
The number and types of ethereum tokens are too numerous to cover here, so we list 7 of the most popular Ethereum tokens.
If you want to diversify your crypto holdings beyond bitcoin, these seven crypto projects based on Ethereum are worth examining.
1. Tether ($USD)
Tether is one of the first and most important stablecoins in crypto, and it’s built on the Ethereum blockchain. The $70 billion project pegs its price to the fiat US Dollar and is backed by a combination of cash, cash equivalents and other asset reserves.
Tether is broadly viewed as a great way to hedge against the volatile crypto market while maintaining exposure to the asset class.
The bull case for Tether and stablecoins is that it’s a lot easier to spend them on everyday goods and services than a crypto like Bitcoin that can gain or lose 10 percent+ in value overnight.
However, there are some worries that Tether may not be able to withstand a full liquidation because of smaller reserves than anticipated. Tether came under fire with crypto exchange Bitfinex over accusations of price manipulation during the historic Bitcoin ($BTC) price run of 2017.
Some investors prefer rival stablecoin USD Coin ($USDC) that has formed from a partnership of Coinbase (NASDAQ:COIN) and Circle.
2. Crypto.com ($CRO)
Crypto.com is more than a decentralized cryptocurrency exchange with support for advanced trading options on over 150 currencies. It also has a standalone crypto wallet, NFT marketplace, and offers one of the first cryptocurrency credit cards.
Staking CRO, the company’s proprietary coin, provides a premium experience with lower trading fees and higher staking and credit card rewards.
While a great crypto to hold, be wary of the risks of HODLing assets in an exchange wallet. Holding your own private keys gives you custodial hold of your assets like a bank account. It may be easier to trade and spend on crypto.com, but it’s more secure to store your holdings in a cold wallet like Trezor.
3. Shiba Inu ($SHIB)
Shiba Inu coin lost half of its value from its peak, but this Ethereum-based Dogecoin ($DOGE) clone still has legs after a profitable year. The memecoin isn’t the most stable, yet astonishingly managed to soar a jaw-dropping 65 million percent in its first year, and the development team is working on several innovations to monetize the project.
Many traditional investors believe Shiba Inu is a pump-and-dump scheme. It’s difficult to fully dispute that point, as most of its gains are arguably due to FOMO created by Tesla (NASDAQ:TSLA) CEO Elon Musk on Twitter (NYSE:TWTR).
However, there’s no denying the initial price pop for those who like to add upside optionality to their portfolios.
4. Uniswap ($UNI)
Uniswap is a decentralized exchange and protocol that enables peer-to-peer trading of ERC-20 tokens. It’s open source and runs on two smart contract types: exchange and factory. Factory contracts add new tokens to the platform, while exchange contracts enable token swaps.
Rather than depending on a centralized exchange to back the trades, the community does it through a liquidity pool. Users stake their balances to provide liquidity to trades that wouldn’t otherwise be possible.
The project is compatible with MetaMask, Coinbase, and WalletConnect. While useful, it’s operating in an increasingly competitive niche with rivals like SushiSwap and more. As such, it will need to depend on high transaction volume to continue its growth trajectory.
5. The Sandbox ($SAND)
The Sandbox is a blockchain-based game initially released in 2015 on Steam. It’s a sandbox game that migrated to the blockchain for an alpha release in late November 2021. It features games like Minecraft giving players nonlinear tasks.
It soon exploded in popularity, gathering $93 million in funding from Softbank and others in a seed round. Plus, major brands like Adidas and Snoop Dogg spent big money to be involved. You’ll even find a $650,000 megayacht sailing the seas of the Sandbox.
Although it surpassed the value of rival metaverse Decentraland ($MANA), it’s unclear yet which virtual world will draw the largest crowds.
6. Chainlink ($LINK)
Chainlink is a blockchain oracle network built on Ethereum to connect outside data sources. It was created in 2017 to act as a bridge between blockchain and legacy data, and its native LINK token is an ERC677 token, which makes it backward compatible with ERC20.
This makes it a potentially important part of the evolution to web3, as blockchain and non-blockchain merge.
Oracles are necessary to import real-world data, such as weather, sports scores, election results, and more. This data could be important to resolve certain smart contracts, but it needs to be verified by trusted sources. Staking LINK creates a node to participate in the network and earn rewards.
7. Enjin Coin ($ENJ)
Enjin is a Singapore-based blockchain infrastructure for decentralized gaming. It’s quickly becoming the next big thing in blockchain development because of its ability to cheaply and efficiently create NFTs. It acts as an Ethereum sidechain.
Minted assets are customizable and recorded to the Enjin platform and assigned an ENJ value.
It has a variety of software development kits (SDKs) that focus on creating, trading, and destroying NFTs. And it supports decentralized finance and gamification of its on-platform digital assets through its application programming interface (API).
The Bottom Line
Ethereum has been described as the equivalent of the internet for blockchain. This led various projects to create sidechains and oracles to bridge other networks, blockchain and traditional.
To hedge your portfolio of Bitcoin and Ether and add upside optionality, these popular types of ethereum tokens have the potential to round out a balanced crypto portfolio.
#1 Stock For The Next 7 Days
When Financhill publishes its #1 stock, listen up. After all, the #1 stock is the cream of the crop, even when markets crash.
Financhill just revealed its top stock for investors right now... so there's no better time to claim your slice of the pie.
See The #1 Stock Now >>The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.