Coinmetrics: Ethereum-based Tokens Have Seen Tremendous Growth Past the ICO Era


Ethereum, the second-largest cryptocurrency by market cap hasn't had quite an eventful year in terms of price rise or market dominance, but that has been the case for almost all the altcoins. The altcoin has failed to match its glory of its ICO era as well as its all-time high.

However, many analysts believe that Ethereum was overvalued in the ICO era, and today's market price is the real value of the altcoin. The second-largest altcoin might be overvalued as per some analysts, but there is no denying that Ethereum played a pivotal role in revolutionizing the crypto market with utility tokens. It was the first platform that allowed the tokenization of assets using smart contracts with the help of which almost any entity or asset can be digitized.

A recent report from Coinmetrics showed that Ethereum has grown tremendously after the ICO era. Ethereum network was the pioneer of standardizing tokens with the help of ERC-20 protocol. A standard protocol meant that various tokens based on ERC-20 tokens could be exchanged with each other or can be stored in wallets that support the protocol.

Coinmetrics launched a new metric called Network Value to Token Value (NVTV) ratio which pegs the market cap of native token of the network ETH against the market cap of ERC-20 tokens created on the network. The result showed that the NVTV value of ETH token has been on a steady decline, which is proof that the utility tokens created on the platform went on to do quite well in the market.

Another interesting finding of the study suggested that the declining ETH value on NVTV is mainly because of a selected type of ERC-20 tokens, stablecoins. Stablecoins has been increasingly used by various exchanges and different platforms to provide liquidity on its platform, and its rise has shown the importance of such standardized tokens.

The combined market value of Ethereum based tokens would have been significantly higher if Binance coin hadn't switched from ERC-20 to its native Binance chain. The growth and popularity of stable coins in the past year can be understood from the fact that on July 1st, 2018 the total market cap of stablecoins was $109 million which increased to $3 billion by November 10th, 2019.

Another boost to the Ethereum based tokens overall market value came from Tether USDT which has the largest market share among stable coins with quite a difference. Tether decided to move from a Bitcoin-based Omni protocol to ERC-20.

The main reason for such popularity for Ethereum based tokens is because of the utility factor. The network provides a common platform for anyone to create a token-based on a common protocol, which ensured that the token makers do not have to worry about creating their own market or product for being viable in the space.

Ethereum (ETH) Live Price

1 ETH/USD =$3,961.8173 change ~ 10.74%

Coin Market Cap

$458.78 Billion

24 Hour Volume

$26.75 Billion

24 Hour VWAP

$3.79 K

24 Hour Change

$425.48

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