Why Would People Use a Specific DAPP ERC20 Token When Ethereum is Already Available?

Hi and thanks for directing your question to me. The progression and evolution of blockchain technology have undoubtedly provided users with a plethora of choices. Ethereum, with its rich history and extensive feedback, is a powerful and versatile platform. However, many developers and users still opt to use specific DAPP ERC20 tokens. This article aims to explain why individuals and projects would choose a specific ERC20 token over the widely known Ethereum (ETH).

Understanding Ethereum and Its Limitations

Ethereum is indeed an incredible platform that has garnered a significant following and has been at the forefront of DeFi (Decentralized Finance) projects. One of the primary reasons for its popularity is its robust smart contract functionality. Smart contracts enable automated, transparent, and tamper-proof operations on the blockchain. However, using the Ethereum network to develop a custom smart contract for a specific application can be challenging and resource-intensive.

ERC20 Tokens: Customization and Specificity

ERC20 tokens, such as SALT or BANKEX, offer unique functionalities and innovations that are tailored to specific use cases. Let’s explore why developers and users might choose a specific ERC20 token when Ethereum is already available:

Automated Processes with ERC20 Tokens

The prime example of this is the SALT ERC20 token. Built into the SALT token is a sophisticated smart contract that automates a fiat to crypto loan process. This contract includes various features such as:

Fiat to Crypto Loan Process: Simplifies the lending process by enabling users to convert fiat currency into crypto assets with ease. Varying Escrows and Payment Schedules: Customizes loan agreements to fit diverse user needs. Platform Membership Section: Provides a platform for lenders and borrowers to interact, ensuring a transparent and secure transaction.

These features make SALT a unique and valuable tool for lenders and borrowers alike. The specific functionalities of the SALT token are unparalleled in the Ethereum ecosystem, making it a preferred choice for users who require this precise functionality.

Specialized Applications with ERC20 Tokens

Another example is BANKEX, which offers a smart contract that schedules inspections and registers real property to the BANKEX token. This token serves a specific purpose in the real estate sector by streamlining property management and reducing the need for paper-based documentation.

Investment Opportunities

For some individuals, the choice of using a specific ERC20 token is driven more by investment motives. Rather than viewing Ethereum as their primary trading platform, these users see ERC20 tokens as tokens to bet on the success of the project and the backing company behind the token. The value of these tokens can rise based on the project’s success, similar to how stocks in traditional financial markets are valued.

The Role of Ethereum as the Foundation

Ethereum itself serves as the base of nearly every startup in the blockchain space. It provides a secure and reliable infrastructure for launching and executing smart contracts. However, once an organization decides to develop a token for their specific needs, they can leverage the security and reliability of the Ethereum network. The security of the blockchain is already built in, allowing developers to focus on creating unique, tailored solutions within the Ethereum ecosystem.

Conclusion

In summary, while Ethereum is an incredible and versatile platform, specific ERC20 tokens offer unique functionalities, innovations, and tailored solutions that cater to the specific needs of users and projects. Whether it's automating processes with automated fiat to crypto loans or streamlining property management with real estate tokens, ERC20 tokens provide a level of customization and specialization that Ethereum alone cannot offer.

Choose the appropriate tool for the job, and you’ll be well on your way to maximizing the potential of your blockchain project or investment.

Happy HODLing!