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Utility tokens of L2 blockchains serve various purposes, from granting access to ecosystem offerings to paying fees and beyond. One such token that has been garnering significant attention lately is CHO. Serving as the backbone of Choise.ai, CHO already had numerous use cases. However, the announcement of Choise.ai’s upcoming L2 blockchain, Entropy, is supposed to give CHO a substantial boost. Other utility tokens with room for growth include ARB, OP, STRK, and IMX, and we’ll explain why we believe each of these tokens can explode in the medium to long term.
CHO (Entropy)
As mentioned above, Choise.ai announced the forthcoming launch of Entropy, an L2 blockchain focused on B2B and enterprise, and powered by AI. CHO will lay the foundation for Entropy’s long-term growth, fostering its scalability and sustainability.
This L2 will offer a no-code environment for those seeking to create, build, and flourish in the realm of Web3. This will be accomplished through the use of AI models for smart contract generation and optimization, completely eliminating human error, ensuring seamless operation, and reducing costs simultaneously. Additionally, developers will have the opportunity to monetize their AI models through integration with a blockchain-based AI model marketplace. This level of innovation has not been seen on any other blockchain, and it will be incredibly exciting to see how things unfold from here.
CHO holders will be given various kinds of benefits, such as access to new platform features, airdrops, partner rewards, and more. But that’s just the tip of the iceberg. Other perks of holding CHO include receiving up to 20% of Choise.ai’s B2B revenue through the soon-to-be-launched VLT token, which will be exclusively credited to CHO holders, giving a super boost to their staking income. CHO will also incentivize legitimate transactions within Choise.ai’s innovative Tringlr SMPC technology, which will serve as the base for ultra-secure digital wallets. Lastly, the token was recently launched on the BSC network, with a $500,000 prize pool for transfers to BSC, aligning with Choise.ai’s vision of supporting community programs and reducing transaction costs.
Given all this, it’s clear that CHO has potential matched by very few other tokens. It’s a hidden gem for anyone seeking tokens with great utility. And with the impending launch of Entropy, CHO is about to get to new heights.
ARB (Arbitrum)
ARB is the utility token of the Arbitrum Network, launched in May 2021 with the aim of enhancing scalability, speed, and cost-effectiveness compared to the ETH network. Indeed, Arbitrum can handle a high volume of transactions with minimal latency.
ARB tokens are also used for governance within the Arbitrum DAO and serve as rewards for validation nodes. Validators can stake tokens on the network, thereby enhancing its security.
Despite its strengths, ARB has encountered several challenges. For example, during the ARB airdrop scheduled for last March, a significant percentage of intended recipients, around 10,000, did not receive their tokens, while some who did were subject to high fees. Although the team resolved the issues, some participants were left with a bitter taste, leading them to exit the project.
OP (Optimism)
Optimism, another L2 solution, utilizes optimistic rollups, which are cheaper than pessimistic rollups, enabling smooth transaction processing without causing network congestion or exorbitant fees. These optimistic rollups ensure network security with most transactions being executed automatically, but if a transaction is suspected to be fraudulent, the system undergoes a verification process to confirm its legitimacy.
The OP token has two main functions: operations and governance. Holders can vote on upgrades and proposals, earn rewards for contributions to the network, and stake their tokens.
However, the main problem with this network, which you could already guess, pertains to security. While the fraud-proof scheme theoretically works, there are instances where fraudulent transactions or actions go undetected, leaving the network vulnerable to exploitation by malicious actors.
STRK (Starknet)
Starknet is a ZK rollup for Ethereum and a Layer 2 blockchain that ensures high performance, security, and low fees using the STARK cryptographic proof system. Although the blockchain is still in development, its native token, STRK, was airdropped to the community in February.
There’s a lot of excitement around Starknet, and its developer community is quite strong. Anyone looking to build on Starknet can find resources in their Developer Hub, and Cairo, the network’s native smart contract language, further simplifies things for developers.
Like most other L2 native tokens, STRK can be staked, used for governance, paying transaction fees, and maintaining the network. Soon, it is expected to release a range of data availability solutions and a permissionless sequencer and prover. Although the project overall seems promising, there are some posts on Reddit suggesting it could be a pump-and-dump scenario orchestrated by venture capitalists.
IMX (Immutable)
Immutable X is a Layer 2 scaling solution for Ethereum NFTs that supports both NFT minting and trading with no fees, is carbon-neutral, and incredibly fast, achieving up to 9,000 transactions per second.
What sets it apart from other NFT marketplaces is that trades are executed instantly, ZK rollups provide high security, it includes a built-in wallet, has a global order book that aggregates NFTs from different marketplaces, and offers APIs and SDKs that make it easy for developers to build Web3 apps.
The platform’s native token, IMX, is its first and native NFT. The IMX token is used for paying transaction fees, voting, and staking on Immutable X. These tokens can also be locked in staking pools. However, despite the project’s overall strength and the token’s potential, it may not appeal to people who are not interested in NFTs.
Summary
It looks like 2024 is the year of L2 native tokens, and since we’re almost halfway through, some of the listed tokens have already appreciated significantly, while others still have room to grow. However, among the five, it’s clear that CHO has the greatest utility. Entropy will offer a much broader range of possibilities compared to other L2s, making CHO a token with immense potential. At its current price, it’s definitely a steal and could be a good buy.
