A “flippening” of sorts has happened on the Ethereum blockchain. Data revealed in a Coin Metrics report this week notes that, for the first time, the number of ERC-20 transactions has surpassed the number of transactions done in ETH itself. And as popular as those tokens are, they could be on the verge of giving way to the newer class of non-fungible tokens.
So what does that mean? And why should anyone care?
The surge in transactions involving these types of smart-contract based tokens could be evidence that the Ethereum network itself is at last finding its footing with users, as evidenced by a variety of actual use cases.
Birth of a skinnable token
The Coin Metrics report, written by analyst Nate Maddrey, borrowed the term “flippening”—initially coined to describe the other cryptocurrencies overtaking Bitcoin in value—and applied it to what he termed a “transaction flippening” on the Ethereum network itself.
Maddrey looked back to the creation of the ERC-20 specification, which allowed Ethereum-compliant tokens to be created. While the ease with which these tokens could be minted contributed to the excesses of the ICO boom, the ERC-20 tokens have also created network value—and spawned an almost unimaginable amount of alt currencies.
In fact, by April of this year, more than 181,00 ERC-20 coins existed on the Ethereum blockchain, according to Investopedia.
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The Coin Metrics report divided those coins into three types—utility tokens, which allow the bearer to get services, such being able to bet in prediction markets via the Gnosis; exchange tokens, such as Binance’s BNB token (it later moved from Ethereum to the Binance exchange’s own blockchain); and everyone’s favorite, stablecoins, such as Tether and DAI.
It’s that last category—stablecoins—that, since mid-2018, have contributed most to the number of transactions happening on…