The Ethereum blockchain processes information regarding ETH transactions and houses several applications that have solved issues existing in various industries. The immediate connect has proved to be a boon for modern industries during the Bitcoin Era. The Ethereum Blockchain has rightfully earned its nickname “the mother of all dApps or decentralized apps.” Some of the decentralized apps include DAOs (Decentralized Autonomous Organisations, ICOs (Initial Coin Offerings), and NFTs (Non-Fungible Tokens). These applications enhance security, access, and efficiency across different industries. Let us talk about this in detail and understand the different utilities of the Ethereum Blockchain.
The mechanism behind Ethereum blockchain
The utility of ETH tokens is well communicated to the public. It enables developers to develop new tokens based on ETH, which are used to decentralized power Apps over the blockchain. To do so, Smart contracts are put to use. Plus, the immediate connect helps modern businesses in the cryptocurrency era. Due to the Ethereum Blockchain’s permissionless nature, various developers have created and developed several applications, which has led to the generation of several billion dollars and has improved countless lives.
A DAO or Decentralized Autonomous Organization is based on a blockchain that does not have a central authoritarian body. They are managed by rules that are coded in the application. Blockchain security ensures better safety features on these applications. These applications are sourced openly and are governed by the community. Example of these DAOs includes the MolochDAO and MetaCartel. Thus, a DAO proves as a major use case for the Ethereum Blockchain.
Ethereum Token Launches
Initial Coin Offerings happen to be similar to Initial Public Offering, and token launches, which help raise funds for the blockchain, became popular during the Initial Coin Offering Boom. As more funds were raised, it allowed a paradigm shift and changed how ICOs raised funds. Ethereum can support the entirety of the blockchain industry, and it acts as the main fundraiser for the most significant blockchain projects. Therefore, Ethereum based Token Launches prove to be beneficial for the blockchain industry and are therefore considered as a major use case for the Ethereum Blockchain.
Non-Fungible Tokens or NFTs have become widely popular during recent times. NFT collections are raising millions of dollars for developers, allowing them to bring more innovation to the blockchain. NFTs include digital assets that are scarce and unique, finding utility in art, games, and other industries mainly associated with a luxurious lifestyle. NFTs started around 2017 when Cryptokitties launched digital cat collectibles and gained a lot of momentum in the market. However, the utilities of NFTs have evolved, and companies like the NBA, LVMH, and Ubisoft are testing the waters in the NFT space. These NFTs are minted by paying gas fees and traded between people to generate profits.
Stablecoins refers to cryptocurrencies that are relatively less volatile than most cryptocurrencies in the market. These cryptocurrencies do not usually provide the same returns as others like Bitcoin and Ethereum. The value of these cryptocurrency tokens is mostly pegged with the value of assets and Fiat currencies. There are currencies pegged with the US dollar and assets like gold. However, other Stablecoins are not pegged against such assets but maintain their stability algorithmically. Investors often use Stablecoins as a hedge against the volatility displayed by most cryptocurrencies.
DeFi (Decentralized Finance)
Decentralized Finance is one of the latest and most beneficial utilities of the Ethereum Blockchain. DeFi platforms based on the Ethereum blockchain allow people to access services like P2P loans, gaining interest over crypto possessions such as Stablecoins. DeFi platforms help people enhance their source of passive income. Some of the DeFi platforms that have gained popularity include Aave, MakerDAO, and Compound. As recorded in 2020, circulation of $4 Billion was observed in the Defi industry.
During the Bitcoin Era, blockchain technology is useful in different industries and allows developers to enhance and automate several processes. The Ethereum blockchain is a very useful Blockchains exist, and it houses several platforms that have helped people generate Billions and enhance their lives. Several DAOs, Defi applications, and Stablecoins present themselves as the key use cases of the Ethereum Blockchain. These utilities have allowed the crypto and blockchain industry to expand its horizons and help investors and developers generate funds.