Types of Crypto Assets

 

A good understanding of the types of crypto Assets will help us to identify the uses, characteristics and similarities of the types of assets under certain different circumstances.The major crypto assets are divided by CoinDesk’s Digital Asset Classification Standard into a few helpful categories and these categories are discussed below:

Cryptocurrency
Cryptocurrency refers to digital money that runs on private blockchain technology. In a league of its own, Bitcoin (BTC) is the most well-known cryptocurrency. Litecoin (LTC), Monero (XMR), and Bitcoin’s copy which are Dogecoin and Bitcoin Cash are examples of altcoin (that is alternative coins to Bitcoin).

Smart Contract Platforms
 These are the ‘Layer 1’ or foundational blockchain operating systems that other cryptocurrency programs are created upon. With the ERC-20 standard, Ethereum is the market leader in this niche, however, there are several others, which include the following: Cardano (ADA), BNB Chain (BNB), and Solana (SOL).

Decentralized Finance (DeFi)
One of the most effective applications of blockchain technology is decentralized finance (that is what DeFi stands for). These are the majority of DeFi initiatives, such as Uniswap (UNI), Aave (AAVE), Compound (COMP), Yearn Finance (YFI), and Balancer (BAL). These platforms have their native tokens which are used for operation on the platform.

Stablecoins
Stablecoins coins are digital tokens and they have their value tied to a traditional or fiat currency. In most cases, stablecoins are tied to the US dollar, gold and other tangible, valuable assets. Stablecoins are designed to operate as a bridge between cryptocurrencies and the traditional currencies, giving crypto investors a secure place to safe-keep or protect their money or reduce the risk of losing the value of money through inflation.

Non-fungible Tokens (NFTs)
These investments typically reflect something irreplaceable and have a unique worth. The replacement of your Bitcoin with another would not bother you, but each NFT has a unique identity and selling price. NFTs can represent actual or digital products like luxury items, works of art, or intellectual

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