Ethereum and Ripple dominate the field of utility tokens
Authors: Jan Spörer, Philipp Sandner
Last changed: 10th September 2019
Originally posted: 10th September 2019
Data from: 28th July 2019
Market capitalization of utility tokens in USD (July 2019). Figure and data provided by the International Token Standardization Association (ITSA) e.V.
You are invited to download this figure and distribute it or use it for your own purposes. This figure is free for use. For reference, please use “(TOKENBASE, 2019)” and “TOKENBASE, version of April 2019, International Token Standardization Association (ITSA), see www.itsa.global” in the footnote.
Ethereum and Ripple are by far the leading utility tokens. Ripple exhibits three times more market capitalization than the third-largest utility token, Binance Coin, which is closely followed by EOS.
Utility tokens are used to perform functions in more or less restricted domains. This means that utility tokens are not just used as a means of exchange (in contrast to crypto currencies such as Bitcoin), but they serve a purpose that goes beyond simple transactions. Holding (and spending) utility tokens may bring benefits such as the right to use the functionality that the network provides. The top 10 utility tokens are all, by a narrower definition, classified as settlement tokens (EPP22S classification from ITSA’s ITC framework). A Settlement Token is designed to serve for the settlement of transactions within the environment that the token was created for (e.g. purchase of goods or services in a third-party ecosystem).*
Ethereum, for example, is a standard that allows everyone to utilize the Ethereum mainnet for a wide range of complex transactions. Ethereum is famous for its potential to accommodate triggered transactions by using “smart contracts”. Ethereum could potentially play a major role in the Internet of Things and is central to the idea of Decentralized Autonomous Organizations (DAOs).
Ripple is the leading token for a payment protocol designed to settle foreign exchange transactions using a peer-to-peer approach, practically in real-time. Ripple is the third-largest crypto asset overall (taking all crypto assets into account, including non-utility assets). One of Ripple’s advantages is that is it promoted by a well-financed corporation (Ripple Labs) that offers accompanying solutions along with the XRP token. Ripple is already used by large-brand banks such as Santander.
This graphic was created with data from ITSA’s TOKENBASE framework. ITSA enables its members to access data relevant for a wide array of analyses.
* As such, a Settlement Token (at least partially) also fulfills the functions of money. In contrast to a Payment Token, however, it is not intended as a generic digital currency without a focus on a specific use case or environment, but for the settlement of transactions within a specified environment (e.g. decentralized network, third-party ecosystem or business relationship).
The International Token Standardization Association (ITSA) e.V. is a not for profit association of German law that aims at promoting the development and implementation of comprehensive market standards for the identification, classification and analysis of DLT- and blockchain-based cryptographic tokens.
So far various reputable organizations have already committed to join ITSA as associated founding members, reaching from corporates (e.g. Commerzbank’s Main Incubator, Bank Frick, MME, Börse Stuttgart) over associations (e.g. Bundesverband deutscher Banken, the German Investment Funds Association BVI), startups (e.g. Cashlink, solarisBank, CryptoTax, and Ambrosus) and universities (e.g. Frankfurt School of Finance and Management, University of Mainz, TU Munich, Hasso Plattner Institute or UCL Centre for Blockchain Technologies in London) to private members (one of the co-creators of the ERC20 standard).