Protocol coins or tokens are digital tokens that are needed to access the service which the underlying protocol offers.
Generally, the dApps are the creator on these protocols similar to the dApps like they are built on top of the Ethereum protocol.
These protocols are often referred to as blockchain protocols residing on top of the current protocol layers of the internet as expressed below –
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What Could Be Done Then?
Now, it is imperative to discuss some of the blockchain protocols as well as their protocol coins since this is an opportunity to capture their right value for the future.
Also, investing in protocols was not possible before the introduction of cryptographic tokens and blockchain. That is the reason why one should make the best of this opportunity.
1. 0x (ZRX)
The 0x protocol is a sort of decentralized exchange protocol for ERC20 tokens. It is an open-source protocol that has its native protocol token known as 0x.
The founding team of 0x believes that there will be many dApps and various protocols which may need to interact with each other and then synergize to offer the best service to their user in the future.
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2. Loopring (LRC)
It is an open-source, decentralized exchange protocol to exchange ERC20 tokens. Loopring combines the off-chain order books with on-chain settlement contracts to make successful trades. This blockchain-agonistic protocol can be deployed on different blockchains like NEO, Ethereum, EOS, QTUM, etc. as long as they are capable of running blockchain smart contracts on them.
Lisk does this by providing a powerful Lisk core and SDK, and the primary chain which is fueled by LSK tokens. This works like gas on the main chain as well as a sidechain for performing operations.
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This protocol is a Decentralized Storage Network construction perfectly built on a blockchain with Filecoin-FIL. It is mainly a marketplace protocol where clients spend FIL for storing as well as retrieving information from the decentralized network and miners earn FIL by storing data for their clients.
As one of the oldest protocols in the market, Ethereum is the first blockchain project to have conceptualized the idea of blockchain protocols which are more than just currency. This project aims to make Ethereum as the world’s only computer where the gas is paid in Ether (ETH).
The official Ethereum project site says –
“Ethereum is a decentralized platform for applications that run exactly as programmed without any chance of fraud, censorship, or third-party interference.”
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Blockchain technology and cryptographic tokens have introduced a new breed of protocols to the world. These protocols can easily be monetized and proven helpful in creating tremendous value for human beings.
But, making an authentic protocol with adjusted incentives and game theory is burdensome. That is the reason a large number of these protocols are bound to come up short which gets out for additional alert while speculating or investing in them.
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