The “cryptocurrency” term is usually referred to as a digital payment instrument. In a technical sense, not all crypto assets can be considered currencies. In fact, blockchain-based assets fall into two main categories: coins and tokens.
Coins are what we mean by cryptocurrencies in general, i.e. they are used for payment settlements. Tokens have a wider scope of application and serve specific purposes. To put it in a real-world setting, a token could be a lottery ticket, a club membership, a bonus in loyalty programs, proof of ownership, a share of a company, or a bond. Depending on the intended use, tokens can be classified as follows:
Payment tokens – similar to coins, they carry out payment functions
Utility tokens – these are native crypto units within a given blockchain project
Security tokens – they represent a digital version of conventional securities
Non-fungible tokens (NFTs) – they serve as proof of ownership and are often used by creative people, collectors, or gamers.
Let’s narrow our topic down to utility tokens.
Simply put, a utility token is a digital asset backed by a blockchain project. This type of token grants certain benefits to its buyers. For example, utility tokens give their owners voting rights or discounts within a crypto ecosystem. Additionally, they are used for staking where the PoS mechanism is applied, which allows you to get a dividend based on an annual percentage rate (APR).
Another important feature of utility tokens is their investment potential. These crypto assets have a limited supply so their value varies depending on the demand/supply ratio. A smaller supply of tokens in circulation in a high-demand environment drives their prices up. Apart from that, the attractiveness of a utility token derives from the popularity of a crypto project. A token of a flourishing and future-proof company is likely to be a sought-after asset.
A clear-cut example of a utility token is BNB – a native token of Binance crypto exchange. It is a multi-purpose digital asset that can be used for a variety of purposes, including transaction fees, a collateral in DeFi lending markets, or as a payment instrument. The immense popularity of Binance naturally causes its tokens to skyrocket in price.
In this article, I have picked five most promising utility tokens that do not require massive investments at the moment but can turn out to be a lucrative asset in the future. However, you need to understand that I have no intention of providing you with investment advice or solicitation. Make sure you research an asset well before investing.
APECoin is an ERC-20 governance and utility token used within the APE ecosystem to empower a decentralized community that is a pioneer in Web 3.
ApeCoin is the ecosystem’s governance token, allowing its holders to participate in ApeCoin DAO. Additionally, APE is a utility token that gives all its participants access to a shared and open currency. Thirdly, ApeCoin gives users access to certain parts of the ecosystem that they wouldn’t have otherwise, including exclusive games, merchandise, events, and services. Lastly, ApeCoin is an incentive tool that encourages third-party developers to participate in the ecosystem by integrating APE into their services, games, and other projects.
Bored Ape NFT owners were given the opportunity to claim free APE, with over 119 million tokens claimed thus far. That is over $1.6 billion at the time of writing this article.
It has risen from a low of $6.21 to an all-time high of $17.17 before retracing to $10.72 at last check. That’s a 58% increase in just 24 hours. The popularity of ApeCoin is expected to increase along with its price.
APE has just become available for buying and exchanging on ChangeNOW, which was one of the very first crypto exchange platforms to list it. So, those less fortunate who don’t own Bored Ape NFTs and cannot obtain ApeCoin for free can get APEs on the ChangeNOW website or in its mobile app. Another convenient tool for buying and storing ApeCoin is NOW Wallet.
Golem is an open-source platform for accessing digital resources. It is a kind of a decentralized supercomputer with its users performing two roles: Requesters who buy extra IT resources and Providers who sell them. Golem uses a decentralized marketplace to facilitate this exchange. The platform is home to a large community of developers who create broad-ranging products such as machine learning apps, data analytics, CAD simulators, or image and video rendering apps.
GLM is an ERC-20 token, meaning it is based on the Ethereum network. Within the platform, the token serves as a payment instrument in peer-to-peer transactions for renting or consuming the computer power. Besides, GLM is listed on many crypto exchanges, including Uniswap, Binance, and Huobi.
GLM remained essentially unchanged over the past year. On March 12, 2021 it was quoted at $0.49 versus $0.48 as of March 12, 2022. At the same time, the token demonstrated strong performance by the end of 2021.
NOW Token (ChangeNOW)
NOW is a native token of ChangeNOW, an instant crypto exchange and processing platform. It is a fast-developing crypto project that has over 3 million customers. With exchange operations as a primary activity, ChangeNOW offers a wealth of supplementary services thus forming a full-fledged crypto ecosystem. Among other things, the platform facilitates airdrops and token swaps, provides crypto loans, and supports an in-house crypto wallet.
Participants in the NOW ecosystem have a lot to gain from the token, as the developers have furnished it with many perks. First off, NOW tokens are accepted as a fee for listing custom tokens on the platform. Second, you get a discount on the NOW Node service that provides access to full Nodes and blockbook Explorers via API. Third, NOW tokens are used to pay for business promotion including SMM advertising, guest posts, and other promotional materials.
In addition to the above-said use cases, NOW can serve as an investment tool. It is listed on Binance and Uniswap exchanges and comes in two types: NOW (ERC-20) based on the Ethereum Network and NOW (BEP-2) based on Binance Chain. ChangeNOW offers generous ROI for staking that amounts up to 25% annual interest.
NOW Yearly Performance Overview
Year-on-year, NOW price almost tripled: from $0.03 as of March 12, 2021 to $0.08 on March 12, 2022. Starting from August 2021, the token has been showing a steady upward trend.
Basic Attention Token, or BAT, is a native token of the blockchain-based digital advertising platform. The core idea of the project is to reward publishers for their content and viewers for their attention. The BAT developers intend to solve problems of online advertising such as privacy issues, ad abuses, or security risks. They have developed the Brave Browser where users can watch ads and get paid with BATs for that. This way, publishers monetize their content and reach the target audience while viewers benefit from it.
BAT serves as a payment instrument for running advertising campaigns. That’s where the use case of this token ends. Still, it is a rather popular digital asset for investing, having #78 market rank according to CoinMarketCap. BAT is listed on major crypto exchanges including Binance, Coinbase, ChangeNOW, Bithumb, and Huobi.
BAT was trading at $0.832377 at the time of writing. Compared to last year, it lost 32.3%. But the past seven days have seen it gain a substantial 21.1%.
Fantom is a smart contract platform providing ledger services. It offers solutions intended to develop new DApps and simplify the integration of existing DApps while focusing on three aspects: scalability, security, and decentralization. Fantom also prioritizes speed, handling transactions in merely a second.
FTM is an ERC-20 token that has several use cases. First, users who want to run their own validator node based on the PoS mechanism should have at least 1 million FTMs. Additionally, the token is accepted as a network fee. Moreover, FTM holders have a voting right within the ecosystem. It is also possible to stake the tokens and get returns that amount to 14% APR. However, the reward can decrease if the number of participants in the staking rises.
Starting from September 2021, FTM has been steadily following a bullish trend. On March 12, 2021 the token was traded at $0.39, and the price jumped to $1.19 in a year.
MATIC is a native token of Polygon, a platform for creating scalable DApps. The platform is aimed at establishing a network of Ethereum-compatible blockchains. Its users have a suite of tools at their disposal that enables them to create high-performance blockchains and DApps.
Polygon uses the PoS mechanism meaning that its participants are required to stake MATIC tokens in order to validate transactions in the network. The annual reward on staking is estimated at approximately 3.8%. Besides, MATIC is used as a gas token, i.e. it is accepted as a fee for conducting transactions or using the Polygon chains.
The 1Y chart of MATIC is mostly green. Indeed, it demonstrated a great performance, having jumped to $1.38 as of March 12, 2022 from $0.39 on the same day the previous year.
To make your choice easier, I’ve organized the above information in a comparison table:
*the rate is provided as of the time of writing
The success of a utility token directly depends on the success of the project it is backed by. Reputable crypto ecosystems with a strong community and positive reviews are sure to provide solid support to their native tokens. I have selected five projects that have gained a great deal of traction and have a large following. You should base your choice on careful analysis whether you choose the cheapest token with the highest ROI, such as NOW, or the biggest gainer, such as MATIC.
Investing in coins, tokens and other digital assets is highly risky and speculative. This article should not be construed as a recommendation or solicitation to invest in any particular token. You should decide whether you can afford to lose the money you are going to invest and consult with a professional before making any final decision. We make no warranties as to the accuracy or timeliness of the information contained herein.
Image source: pexels.com