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Monday, 29 September 2025

Cryptocurrency Overview: Layers, Purpose, and Analogies

Cryptocurrency Overview: Layers, Purpose, and Analogies

Token (Symbol - Name - Layer) Purpose / Use Case Known For Analogy (Role in Ecosystem)
BTC - Bitcoin - Layer 1Peer-to-peer digital currencyFirst cryptocurrency, store of valueGold – a store of value and hedge against inflation
ETH - Ethereum - Layer 1Smart contracts and decentralized applications (dApps)Leading platform for DeFi and NFTsOperating system for decentralized apps
XRP - Ripple - Layer 1Cross-border payments and remittancesFast, low-cost transactions, used by banksSWIFT replacement for global money transfers
SOL - Solana - Layer 1High-speed blockchain for dApps and DeFiFast transactions, low fees, Proof of HistorySupercomputer for real-time apps
ADA - Cardano - Layer 1Smart contracts and decentralized governanceAcademic rigor, energy-efficientResearch lab for blockchain innovation
LINK - Chainlink - Layer 2Decentralized oracle networkBridges real-world data to smart contractsAPI layer for blockchain
AVAX - Avalanche - Layer 1Scalable blockchain for DeFi and enterprise useHigh throughput, multi-chain architectureMulti-lane highway for blockchain traffic
XLM - Stellar - Layer 1Fast, low-cost cross-border paymentsFocus on financial inclusion and remittancesWestern Union for the blockchain age
BCH - Bitcoin Cash - Layer 1Peer-to-peer electronic cashFork of Bitcoin, faster transactionsDebit card – fast everyday payments
HBAR - Hedera - Layer 1Enterprise-grade public networkUnique hashgraph consensus, fast and secureCorporate-grade blockchain infrastructure
LTC - Litecoin - Layer 1Digital currency for fast paymentsFaster block times than BitcoinSilver to Bitcoin’s gold
DOT - Polkadot - Layer 0Interoperable multi-chain networkConnects multiple blockchainsInternet router for blockchains
UNI - Uniswap - Layer 2Decentralized exchange protocolLeading DEX on EthereumAutomated crypto vending machine
AAVE - Aave - Layer 2Decentralized lending and borrowingFlash loans, liquidity poolsCrypto bank for loans and deposits
NEAR - NEAR Protocol - Layer 1Scalable dApp platformDeveloper-friendly, shardingToolbox for building scalable apps
WLD - Worldcoin - Layer 2Global digital identity and financial networkIris-based identity, universal basic incomePassport for the digital economy
POL - Polygon - Layer 2Ethereum scaling and infrastructureLayer 2 solution, low feesExpress lane for Ethereum
ATOM - Cosmos - Layer 0Interoperable blockchain ecosystemHub-and-zone modelBlockchain translator. Internet of blockchain
ALGO - Algorand - Layer 1Scalable smart contracts and paymentsPure Proof of Stake, fast finalityRacecar for fast and final transactions
SKY - Skycoin - Layer 1Decentralized internet and mesh networkingSkywire projectDIY internet infrastructure
CRV - Curve DAO - Layer 2Stablecoin-focused decentralized exchangeLow slippage swapsCurrency exchange booth for stablecoins
GRT - The Graph - Layer 2Indexing protocol for querying blockchain dataPowers many dAppsGoogle Search for blockchain
SNX - Synthetix - Layer 2Synthetic asset issuance and tradingOn-chain derivativesLab for creating synthetic financial instruments

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