Unlike Bitcoin and Altcoins, tokens are not able to operate independently and are dependent on the network of another cryptocurrency. That means they do not have their own underlying DLT or blockchain, but instead, are built on top of an existing cryptocurrency’s blockchain.
Data from CoinMarketCap shows that there are at least 1496 tokens in existence, which are deployed on the blockchain platforms of 24 cryptocurrencies. Some prominent examples of different types of cryptocurrencies that host tokens include:
Ethereum – The Ethereum platform has by far the most tokens deployed on it. Tokens that run on Ethereum include Basic Attention Token (BAT), Chainlink (LINK), Huobi Token (HT), USD Coin (USDC), and hundreds of others.
Omni – Tether (USDT), the leading stablecoin and world’s most traded cryptocurrency, is a token that is deployed on Omni, along with three other tokens.
NEO – NEO is often referred to as the Chinese rival to Ethereum, and as a platform for smart contracts and DApps, it has many tokens deployed on it. Top examples of NEO tokens include Nash Exchange (NEX) and Gas (GAS).
TRON – As a leading platform for DApps, TRON has numerous tokens deployed on it, including BitTorrent Token (BTT), which can be used for faster downloads on the BitTorrent file-sharing protocol.
The top 5 tokens by market cap are Tether, UNUS SED LEO, Chainlink, Huobi Token, and Maker, all of which are deployed on the Ethereum blockchain apart from Tether which takes the top spot.
Tokens are much easier to create as you do not need to build a blockchain from scratch. You may have heard the phrase “tokenise the world,” which refers to the ability for tokens to represent almost any asset.
This is thanks to the use of smart contracts, and we have already seen tokenised versions of stocks, commodities, fiat currencies, other cryptocurrencies, property, and more. And the chances are, we have barely even scratched the surface yet as to what else can be tokenised.