The Etherium blockchain was created with a very different purpose than the Bitcoin protocol, it was designed not only to facilitate the creation and registration of its cryptocurrency " the Ether", but also to be able to create other types of cryptocurrencies and store information in an incorruptible and transparent way.Source: elconfidencial.com
ERC stands for "Etherium Request for Comments" which is the most widely used standard for creating new cryptocurrencies, although there are other protocols based on the Etherium.
Essentially, an ERC20 is a Smart Contract based on Etherium because it runs on its protocol (see Smart Contracts and Etherium) and the great benefit of this type of Smart Contracts is that they are made on an infrastructure already created, that is to say an ecosystem equipped with very useful tools to create it so that it is not necessary to build a new and different complementary blockchain for them, where would be necessary a great amount of resources.
This is a standard that is very adaptable to the requirements of developers and allows Dapps to be integrated into the same ecosystem that serves as tools to facilitate token exchanges between users or between different tokens using the same protocol. Most ICOs launched since 2017 and today this standard is still used to create and transfer these tokens. In addition, this makes the native cryptocurrency that supports this blockchain, the "Ether", stronger and more robust. The more tokens proliferate and the more uses are given to the Etherium blockchain, the more it enriches the ecosystem and the more value is added to the protocol.
This blockchain is being used for Decentralized Finances to raise funds by delivering a token in exchange and a return is offered later in the market, while the developers finance their work with the tokens collected to develop their applications and utilities. These developers have to know the language used in the Etherium protocol called "Solidity" which is open source that means that anyone with the right knowledge can use it and complete it to create something new based on the code base offered by Etherium.
In the face of these developments, more and more exchanges are including these tokens in their portfolios to attract new investors of different profiles since they are interested in these avant-garde technologies. And even they create their own tokens with relative success
Given the relative easiness to create these tokens, as the protocol offers incredible development facilities and ecosystem, many create empty content tokens to raise funds and then leave the supposed project. That's why we must study the ICO projects using the common sense, whether they are based on ERC20 tokens or not, before investing in them, because they must offer a real, marketable service that offers different features to others because it must be unique.
Below we will list ERC20 Etherium based token projects that have and have had a very remarkable trajectory. But first let's look at the Coin360 mosaic in the section on etherium-based tokens and we can see that there are thousands of tokens launched since the ICO boom back in 2017. The largest squares in the mosaic represent the most important ERC20 tokens by capitalization, representing high positions in the CoinMarketCap ranking.Source: coin360
*Note: The pinkish values reflect a general decline in most token values last week.
Let's list them in order of capitalization and importance following the first 10 tokens that are enclosed in the orange box in the image above:
1º) Blockchain link Chainlink (see the article on Chainlink). In the CMC ranking 6 (CoinMarketCap)
2º) CRO or Crypto.com token from the Exchange Cripto.com with rank 9 of CMC.
3º) USDC (Dolarcoin - see the article about stablecoins) This is a stablecoin that maintains a parity very close to 1 US dollar. Rank 17 of CMC.
4º) LEO: Unus Sed LEO, with the rank 20 from CMC.
5º) LEND: from Aave blockchain with rank 28 from CMC. (see Cripto market situation - 30/08/2020)
6º) MKR or Maker: with a rank 32 from the CMC.
7º) SNX or Synthetic Network Token: with a rank 33 from the CMC.
8º) OMG Network with a rank 35 from CMC.
9º) BAT: Basic Attention Token (see article on BAT), with a rank 44 from the CMC.
10º) TUSD: True USD token is a stablecoin with parity with the US dollar and with a rank 52 from the CMC.
And the question that arises now is, once we are interested in some of the thousands of tokens out there, how can we buy and store them?
Buying them is not very difficult because the most important exchanges offer them on their platforms and therefore have wallets to store them, but if we want to have control of our token balances, then the best option is to use a wallet that can be downloaded in our google chrome browser as an extension that has fox logo (or favicon). This wallet is called "Metamask". Once installed we can store Etheriums and all the ERC20 tokens that we want to acquire in such a way that in order to transfer them we have to use the same Etherium address starting with 0x... to send them. There is a version of this wallet for Android and iOS.Source: metamask.io
After all the experiences made with thousands of ERC20 tokens, one can conclude that this great tool of the Etherium blockchain ecosystem has become a fundamental element to finance projects using ICOs as a very successful means to do so.
This success was obvious when studies conducted after the great boom of the ICOs between 2017 and 2018, clearly showed that the capitalization of the ERC20 tokens increased much faster than the ETH market
Two years later this is still the case as thousands of ERC20 tokens have penetrated the market and a few hundred have achieved some prominence as it can be seen in the coin360 mosaic above.
Many of these tokens are projects with enormous potential and deserve to be analysed very carefully in order to include them in our portfolios and not only with speculative interest but to hold them for longer periods of time by observing how their ecosystems evolve.