Crypto Tokens: Nowadays, engaging in economic activity takes many forms. Usually, you can divide them into two primary categories: active and passive participation, which results in income. What do experts mean by passive income? Briefly, purchasing a company share means obtaining certain rights without additional movements.
A shareholder gets a voting right and an increase in the company’s profits. However, people often wonder how the scheme works with crypto companies. Crypto tokens exist for such cases.
What are Crypto Tokens?
If some Crypto Tokens are new, here is a quick explanation. Think of tokens as coins but with more control over them. First, the price of coins only depends on market changes. On the contrary, the token prices may rise or fall after the emission of other currencies.
Secondly, token emission and verification are under control, unlike cryptocurrency coins. In other words, these assets work like regular shares to crypto companies. Buying them allows you to:
- Store value
- Trade
- Invest
Numerous tokens from various companies exist currently. Yet, professional rankings help determine the most popular ones.
1. Tether USD
Indeed, any interaction with cryptocurrencies hardly excludes volatility. Fortunately for those who want to avoid instability, stablecoins have appeared on the crypto market. Tether USD is the earliest and most famous stablecoin globally. For the first time, people heard about it in 2014, and years later, USDT remains a leading token.
The market capitalization of this particular token exceeds seventy billion US dollars, which is a groundbreaking success! Why do so many people prefer USDT to other digital assets? Each Tether token allegedly has a backup of one US dollar. Since this fiat currency is one of the most stable globally, USDT isle.
Moreover, the connection to reliable fiat currency increases the liquidity of Tether, making it easy to exchange tokens for cash. Also, high demand for this asset provokes an upsurge in interest rates, so USDT investment is profitable too.
On the other hand, there is a dark side to the Tether situation. As much as this stablecoin is famous for its advantages, it still receives harsh criticism.
Experts distinguish such downsides as:
- Lack of transparency.
- Long-term unpredictability.
The Tether Limited company needs to prove that it possesses enough dollars to back up all tokens. In the past, the management actively avoided audits, so suspicions emerged. Apart from this fact, crypto scientists believe that Tether might cause a crisis in the future. Yet, USDT remains the current market leader.
2. Binance Coin
In like manner, Binance Coin attracts the attention of crypto enthusiasts worldwide. Although its capitalization is slightly smaller than USDT, this token wins in terms of reputation. Besides entering the market later, in 2017, Binance Coin already demonstrated stable financial results.
At the beginning of its history, the Binance token existed solely for transaction and trading fees in its home ecosystem. Later, it transferred from the Ethereum blockchain to the Binance Smart Chain. Another specific characteristic of this token is that part of it regularly disappears. How is that possible? In a nutshell, the company burns a share of Binance coins from time to time. According to the statistics, over thirty million tokens ceased to exist after such manipulations.
The remaining assets can serve numerous purposes, for instance:
- Investing.
- Donations.
- Making virtual presents.
- Booking hotels, etc.
Sadly, the US government accused the home company of tax evasion and money laundering. Despite this dark spot on reputation, the token shows stable growth. This fact shuts down any conversations about it being a financial bubble.
3. USD Coin
The third most popular token in the ranking by capitalization is USD Coin. It functions by the same principle as Tether but boasts particular advantages. As you have read before, Tether has reputational issues, making potential investors look for an alternative. In 2018, Circle collaborated with Coinbase to offer a unique alternative token.
Again, one USDC equals one US dollar, though you may divide it into smaller parts. Due to its simplicity, the token constantly gains users worldwide. Once somebody purchases USD Coin, they only need to transfer dollars to the company bank account.
After generating smart contracts, the company gives back an equal number of tokens to its clients. Tokenization is an easy and fast process, which makes it possible even for people without bank accounts or residency.
4. Binance USD
Luckily for investors who stress over exchange rates and a company reputation, Binance USD exists. Although this token is less popular than the three previous digital assets, it is a real safety net for people’s investments. Markedly, the Paxos company performs monthly audits for Binance to ensure its work is transparent. Indeed, you can barely find a token under more governmental regulations than BUSD.
Besides being 100% reliable, the token possesses the same benefits as its other legendary counterparts, including:
- Minimum volatility.
- Fast tokenization.
- Multiple possibilities for usage.
Furthermore, Paxos has the right to block Binance accounts in case of suspicious activity. Thanks to this policy, BUSD buyers stay safe and sound.
5. SHIBA INU
The SHIBA INU token proudly closes the ranking of the top five most popular tokens. Since its appearance, many have considered SHIB another meme coin, similar to Dogecoin. Surprisingly, the joke grew into a real deal as the token became the main topic of discussion.
At first, the secret author positioned SHIB as Dogecoin’s enemy. Even though people hardly accepted the token as worthy competition for other crypto assets, it gained over one million Twitter subscribers! Because experienced investors feared missing potential income, they boosted demand for SHIB tokens. As a result, SHIBA INU now has all the chances for future success.
Conclusion
Overall, the crypto market changes daily. Current token leaders are fighting to stay on top in this volatile environment. Luckily, investors are free to choose a safe place for their financial resources.