One of the most exciting aspects about being a cryptocurrency investor is that blockchain technology can be so interconnected and when you invest in one project, you may be getting exposure and indirectly investing in others. This is unlike the stock market which simply has companies that stand alone and then a variety of ETFs. Here are the top coins that are interwoven with others:
- Ethereum. When you invest in ETH, you are getting so much exposure to a massive ecosystem that is reliant on it. All L2s like Polygon, Immutable X, Arbitrum, Optimism and more coming out like Starknet and ZKsync all still process on their L1 which is Ethereum therefore providing more revenue to Ethereum in the form of fees. Even BASE which operates like an L3 on top of Optimism and therefore more indirectly ustilises ETH.
ERC-20 tokens with projects such as Chainlink, Quant and even Shib all use ETH gas when they are moved around on the blockchain. There are apparently about 450,000 ERC-20 tokens which is really insane. Although many of those projects are dead.
Chainlink. As an oracle, Chainlink helps provide off chain data from the real work to the blockchain in a decentralised way. After the introduction of CCIP, many projects are using LINK's oracles and are paying fees to do so. These include BASE, Optimism, Ethereum, Avalanche and many others. So when you invest in Chainlink, you are also exposed indirectly to the success of other projects (mostly L1s).
Atom. Although Atom used to be a stand alone coin representing the Cosmos ecosystem, it since has provided interchain security for new projects that utilise their validators and pay fees back to Atom stakers to do so. Neutron, Stride and Quicksilver do this and others will be joining later on.
BTC ordinals were recently high in demand and will maybe make a comeback later on.
What other coins can you invest in and be exposed to others in crypto?
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