Best ERC-20 Tokens to Buy in 2024
If you’re looking for the best ERC-20 tokens, you probably already have some Bitcoin and are now exploring more investment opportunities. ERC-20 tokens can be a perfect next step.
Unlike Bitcoin, which is mainly a store of value, ERC-20 tokens are designed to work smoothly across various applications on the Ethereum network. They offer unique use cases in a rapidly growing space, making them a potentially great investment.
The following is a list of the best ERC-20 tokens to buy in 2024 based on factors that account for long-term stability and profitability.
What are ERC-20 Tokens?
Fabian Vogelsteller and Vitalik Buterin introduced ERC-20 tokens in 2015. These tokens follow a set of rules that make sure they work smoothly across various applications on Ethereum.
What makes ERC-20 tokens great is their standardization. They all follow the same rules. So, they can interact with any Ethereum-based service without extra programming. This isn’t the case for all cryptocurrencies. For example, Bitcoin might not work with an app built on Ethereum, which is why many people use Wrapped Bitcoin instead.
ERC-20 tokens use Ethereum’s existing infrastructure to execute many functions. They rely on smart contracts — self-executing contracts with the terms written into code — to handle transactions and enforce agreements.
ERC-20 tokens are the backbone of many transactions in decentralized finance (DeFi), like lending and borrowing platforms. They’re also used in gaming and NFTs, acting as in-game currencies or even representing ownership of digital art.
Check out our in-depth guide on ERC-20 tokens and how they work to learn more.
How to Choose the Best ERC-20 Tokens in 2024?
Picking the best ERC-20 tokens to buy in 2024 can be a bit tricky, but here are some tips to help you make a smart choice:
1. Technological Innovation and Uniqueness: Look for tokens that bring something new to the table. Maybe they improve scalability, speed up transactions, or offer cool features that stand out. A token with a tech edge is more likely to succeed.
2. Project Team and Backing: Check out the team behind the token. Do they have experience in blockchain or related fields? Are they well-known in the crypto world? Also, see if reputable companies or influential people support the project. A strong team and good backing can make a big difference.
3. Community Engagement and Support: A lively and active community is a great sign. Look at how involved the community is and how well they interact with the project developers. Good projects often have features that let community members help shape the project’s future. For instance, UNI has one of the strongest and most active communities since it’s tied to Uniswap, which is one of the biggest DEXs in DeFi.
4. Market Potential and Use Case: Ask yourself what real-world problem the token solves. Does it have a clear purpose and can it make a significant impact in its target sector? Tokens with strong use cases are more likely to provide value and succeed. For instance, Aave offers a decentralized lending and borrowing platform, providing an alternative to traditional finance for people who need it.
5. Recent Developments and Roadmap: Pay attention to what the project has recently achieved and what it plans to do next. Successful funding rounds, strategic partnerships, and important product updates are good signs. A solid roadmap shows the project’s future goals and how they plan to get there.
By considering these factors, you’ll be better equipped to find ERC-20 tokens that have strong potential for growth and success in 2024.
Best ERC-20 Tokens to Buy in 2024:
1. Tether (USDT)
Tether (USDT) was founded in 2014 by Brock Pierce, Reeve Collins, and Craig Sellars. It aims to provide a stable digital currency linked to the U.S. dollar. USDT became popular through its use on the Bitfinex exchange. As of March 2024, it is the largest stablecoin with a market cap of around $99 billion, making it the third-largest cryptocurrency overall.
USDT offers stable prices, which is great for trading cryptocurrencies, making cross-border payments, and providing financial access more efficiently than traditional money. While it’s an ERC-20 token, USDT is also built on other blockchains like Bitcoin and Tron, allowing it to be used across different platforms.
Tether’s key strengths are its price stability, high liquidity, transparency efforts, security, and easy accessibility.
However, there are some concerns about the transparency of its reserve backing, especially after the Terra collapse. In 2021, Tether paid $41 million to settle charges with the U.S. Commodity Futures Trading Commission for misleading reserve claims. Also, Tether’s close relationship with Bitfinex raises concerns about potential conflicts of interest.
Despite these issues, Tether remains the largest stablecoin by market cap and one of the best ERC-20 tokens to buy in 2024.
2. Polygon (MATIC)
Polygon, formerly known as Matic Network, was founded in 2017 by Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and Mihailo Bjelic in Mumbai, India. Initially called Matic Network, it rebranded to Polygon in 2021.
MATIC is both an ERC-20 token on Ethereum and a native token on the Polygon blockchain. You can easily switch between the two using bridges. They’re used for transaction fees, staking, and governance. As of March 2024, MATIC has a market cap of over $10 billion, ranking it among the top 25 cryptocurrencies worldwide.
Polygon tackles Ethereum’s challenges, like high transaction fees and slow speeds, by providing a Layer 2 scaling solution. This means transactions are faster and cheaper while still secure. How? Polygon uses a modified proof-of-stake system for quick, low-cost transactions and also enhances Ethereum with zero-knowledge proofs and sidechains.
Despite a security issue in December 2021 that led to the theft of 801,601 MATIC tokens, Polygon remains one of the best ERC-20 tokens to buy.
3. Wrapped Bitcoin (WBTC)
Wrapped Bitcoin (WBTC) was launched in January 2019 by BitGo, Kyber Network, and Ren. The main purpose of WBTC is to bring Bitcoin’s value and liquidity into the Ethereum ecosystem. This allows Bitcoin holders to use decentralized finance (DeFi) applications on Ethereum, something they couldn’t do before.
Learn more about wrapped tokens here.
But how do wrapped tokens work? WBTC is ERC-20 compliant and has a 1:1 peg to Bitcoin. This means each WBTC token is backed by one Bitcoin held in custody. New WBTC tokens are created when Bitcoin is deposited and later destroyed when WBTC is redeemed for Bitcoin. The total supply of WBTC matches the amount of Bitcoin held in reserve.
WBTC is managed by a decentralized autonomous organization (DAO) called WBTC DAO. This ensures transparency and trust in the system. Since Bitcoin is the biggest crypto right now, it only makes sense for WBTC to be one of the best ERC-20 tokens to buy in 2024.
4. Chainlink (LINK)
Chainlink (LINK) is an ERC-20 token that powers the Chainlink decentralized Oracle network. It was launched in 2017 by a team including Sergey Nazarov and Steve Ellis.
The LINK token is used to reward and pay the Chainlink Oracle network. This network provides real-world data to smart contracts on the Ethereum blockchain. For example, it can provide price data for assets like stocks or weather data for insurance contracts. This solves the problem of blockchains not having access to external data, making it possible for decentralized applications to get accurate off-chain information.
Key features of LINK include being ERC-20 compliant and having a fixed total supply of 1 billion tokens. LINK tokens are used to pay node operators who provide data to smart contracts. Instead of creating new tokens, the existing supply is redistributed to keep the network working smoothly.
Chainlink has not faced any major problems or risks and is a leading decentralized Oracle solution in the industry, making LINK one of the best ERC-20 tokens to buy in 2024.
5. Axie Infinity (AXS)
AXS is the governance token for the Axie Infinity game, playing a central role in the platform. Launched on the Ethereum network, AXS is an ERC-20 token secured by Ethereum’s Proof of Work consensus mechanism.
The total supply of AXS is 270 million tokens, with 147.2 million currently in circulation. AXS is distributed through rewards for participating in the ecosystem and supporting the network by running nodes.
Use Cases:
- Governance: AXS holders can vote on the game’s direction and important decisions. The goal is to fully decentralize governance by late 2023.
- Breeding Axies: AXS is used to breed new Axies, the digital pets players collect and battle within the game.
- Staking: By staking AXS, players can earn more tokens and participate in governance proposals. This feature launched in 2021.
- Purchasing Eligibility: Holding AXS may also be required to buy future Axies, land, and other items in the Axie Infinity ecosystem.
On a side note, Axie Infinity was involved in one of the biggest hacks in crypto history when $625 million was stolen from its bridge network, Ronin. But they soon took necessary steps to reduce losses and ensure future security.
While AXS has a more niche audience compared to some of the other best ERC-20 tokens, it still shows a lot of promise of growing in the near future.
6. Compound (COMP)
Compound was founded in 2018 by Robert Leshner and Geoffrey Hayes, while the COMP token was launched in June 2020. COMP is an ERC-20 token that uses a delegated Proof of Stake system.
The main goal of COMP is to support decentralized financial services, letting users lend, borrow, and trade cryptocurrencies without needing banks or other intermediaries. Moreover, COMP holders can vote on changes to the protocol, playing a part in its governance. Lastly, COMP is also used to pay interest to lenders and can be staked to earn rewards.
There is nothing really particularly unique about COMP, but what makes COMP one of the best ERC-20 tokens is that it nails the fundamentals.
7. The Sandbox (SAND)
The Sandbox is a decentralized gaming virtual world started in 2011 by Arthur Madrid and Sebastien Borget, while the SAND token was launched in 2020 to power the platform’s economy.
Sandbox aims to create a decentralized gaming metaverse where players can create, own, and monetize their virtual experiences, including buying virtual real estate, and SAND is used for all transactions within The Sandbox metaverse.
In The Sandbox ecosystem, SAND is used as:
- In-game currency: Players use SAND to buy in-game items like NFT assets for avatars, virtual land parcels, and other digital goods.
- Governance: SAND holders can vote on game proposals and new ideas, ensuring decentralized decision-making. Staking SAND is needed to vote or propose ideas, helping to prevent spam.
- Earning rewards: Players earn SAND by completing specific actions in the game, making it a play-to-earn experience that rewards active participation.
- Creating games: Users can create games within The Sandbox using VoxEdit software, even without coding skills, and are rewarded for their contributions.
- Staking: SAND holders can stake their tokens to earn yields and participate in governance. The yields are given in Gems and Catalysts, which are needed to create NFT assets.
If you’re a fan of virtual reality games and universes and believe this space will grow, SAND is probably one of the ERC-20 tokens to buy in this space.
8. Decentraland (MANA)
Decentraland is a virtual reality platform built on the Ethereum blockchain. It was co-founded by Ari Meilich and Esteban Ordano, starting development in 2015, while the MANA token was launched in 2017 after raising $24 million in an initial coin offering (ICO).
Sandbox and Decentraland have a lot of similarities. Much like Sandbox, Decentraland also aims to create a decentralized virtual world where users can create, experience, and monetize content and applications. Users can create and sell 3D content, trade virtual assets in a marketplace, and enjoy interactive applications.
MANA is the main token that you use to make transactions in this world. You can use it to buy virtual land (LAND), in-game items, and services. You can also stake MANA to participate in the Decentraland DAO.
However, unlike Sandbox, which is relatively stable, Decentraland has faced some criticism for its potential low user activity, as there are no clear reports of the actual daily active users of the platform.
This may be a red flag for some people from investing in the SAND tokens, even if it’s one of the top ERC-20 tokens in the space.
FAQ
How to buy ERC-20 Tokens?
To buy ERC-20 tokens, follow these steps:
- Choose a Crypto Exchange: Sign up on a reputable exchange like Binance, Coinbase, or Kraken. Check out our list of best crypto exchanges.
- Deposit Funds: Add funds to your account using a bank transfer, credit card, or other payment method.
- Buy Ethereum (ETH): Most ERC-20 tokens are traded against Ethereum, so purchase ETH first.
- Trade for ERC-20 Tokens: Use your ETH to buy the desired ERC-20 tokens on the exchange.
- Store Safely: Transfer your tokens to a secure wallet.
What is the best crypto wallet for ERC20 tokens?
MetaMask is a popular choice for its ease of use and browser integration. Ledger Nano X and Trezor are top hardware wallets, offering high security for long-term storage. Each wallet has its pros and cons, so choose one that fits your security and usability requirements.
Check out our list of best Ethereum wallets.
How many ERC20 tokens are there?
As of now, there are over 500,000 different ERC-20 tokens listed on Ethereum.
Which is better, ERC20 or TRC20?
The better choice depends on your needs: use ERC-20 for a larger ecosystem and security, and TRC-20 for cheaper and faster transactions.
ERC-20 and TRC-20 are both standards for creating tokens, but they operate on different blockchains. ERC-20 is on the Ethereum blockchain, known for its strong security, large developer community, and widespread use. TRC-20 is on the TRON blockchain, which offers faster transactions and lower fees.