What would happen after SEC Approval of Ethereum Spot ETFs? Read on as we offer Ethereum price predictions and suggest trading strategies that you can adopt.

 of an Ethereum Spot exchange-traded fund (

) by the SEC has continued to stir anticipation in the crypto community. The 

 on January 10, 2024 has raised hopes for similar products linked to 

. However, recent delays in the SEC's decision-making process have introduced uncertainty, with major players like 

This article analyzes the potential outcomes of the SEC's decision on Ethereum Spot ETFs, as well as its impact on Ether's price. Learn winning trading strategies on Bybit, depending upon your view of post-approval trends.

An Ethereum Spot ETF is an investment vehicle that tracks the price of 

. It allows investors to gain exposure to Ethereum without directly owning or storing the cryptocurrency themselves. Investors buy shares in these funds rather than purchasing Ether directly from cryptocurrency exchanges. Unlike 

, which derive value from futures contracts, Ethereum Spot ETFs are hedged by Spot ETH tokens. As a result, the ETFs can mirror Ether’s real-time market price.

Why Is Everyone Excited About Pending SEC Approval of Ethereum Spot ETFs?

The excitement surrounding the pending SEC approval of Ethereum Spot ETFs stems from the potential for this investment vehicle to provide easier access to Ethereum's price movements for both retail and institutional investors. Anticipation was initially high after the SEC approved Bitcoin Spot ETFs on January 10, 2024, leading many to believe that similar products backed by Ethereum would follow suit. However, recent delays in the SEC's decision-making process have added to the suspense and speculation around the approval of Ethereum Spot ETFs.

Investors are particularly eager because SEC approval of Ethereum Spot ETFs would provide a regulated way to gain exposure to Ether. Spot ETF approval could open up new avenues to investment for both institutional and retail investors.

Despite initial optimism, recent news indicates that the SEC has been delaying decisions on 

 from major players like BlackRock, Fidelity, VanEck, Franklin Templeton and Grayscale. These delays and uncertainties in the SEC's decision-making process have dampened expectations, raising fears that the SEC may not approve these ETFs as quickly as initially hoped.

Post–Ethereum Spot ETF Approval Price Prediction: Three Potential Outcomes

The recent surge in Ethereum's price, as it briefly crossed the $4,000 mark in March 2024, has been fueled by a mix of factors, 

 surrounding the possible approval of an Ethereum Spot ETF. This bullish trend has sparked optimism within the crypto community, with experts foreseeing further price surges if the Spot ETF applications get the green light. Against this backdrop, all eyes are on the SEC’s upcoming decision, slated for May 2024, regarding the approval of Ethereum ETF applications from issuers like Fidelity, ARK 21Shares and Hashdex. 

As the anticipation mounts, traders may want to consider potential outcomes, which could fluctuate based on market expectations, regulatory clarity and general sentiment. 

Here are three potential scenarios that could unfold following the approval of an Ethereum Spot ETF, and how you can navigate each one in your favor.

Bullish Post–Ethereum Spot ETF Approval Price Prediction

For several reasons, approval of an Ethereum Spot ETF could fuel bullish market sentiment. First, it would offer a regulated and straightforward path for retail and institutional investors to tap into Ethereum's potential without dealing directly with cryptocurrency complexities. This newfound accessibility could trigger a surge in demand, potentially driving up Ethereum's price. Also, the approval itself could serve as validation for Ethereum's legitimacy and its potential for wider adoption, instilling further confidence among investors.

Optimal ETH Option Strategy: Bull Call Spread

If you're bullish on Ethereum, a bull call spread could be an optimal strategy. Here's how it works: You purchase a 

. Simultaneously, you sell a call option, at a higher strike price, that's out-of-the-money (OTM). Both 

This strategy allows for profit if Ethereum's price rises beyond the cost of the call spread, while limiting your potential loss to the net premium paid. It can be a cost-effective way to benefit from bullish movements with a known maximum risk.

To execute a bull call spread strategy on Bybit, purchase a near at-the-money ETH call at a strike price of (for this example) $3,200, expiring at the end of June. Next, sell an out-of-the-money call option with a higher strike price, such as $3,800. Ensure both options have the same expiration date. The net 

Your payoff is based on the change between Ethereum's price and the strike prices of the options. If you buy a $3,200 lower strike call and sell a $3,800 higher strike call that costs $200, here’s an analysis of potential profitability. 

:(Higher Strike Price − Lower Strike Price) − Net Premium Paid =

Lower Strike Price + Net Premium Paid = $3,200 + $200 = $3,400

Bearish Post–Ethereum Spot ETF Approval Price Prediction

Several factors could contribute to negative market sentiment post–Spot ETF approval. For instance, approval could lead to selling pressure, as investors who’ve been waiting for the news sell their holdings. This increased supply could outpace demand, driving down the price of Ether. In addition, approval could signal a saturation point in the market, leading investors to take profits and exit their positions. 

The SEC has been investigating Ether to determine whether to classify it as a security because of its transition to a 

 consensus mechanism, which has implications for more stringent regulation. If an ETF approval is accompanied by negative news regarding security classification or other concerns, it could dampen investor sentiment and contribute to a bearish market outlook for Ethereum.

Optimal ETH Option Strategy: Bear Put Spread

The optimal ETH option strategy on Bybit for a bearish outlook could be a 

 at a higher strike price and simultaneously selling a put option at a lower strike price, both with the same expiration date. A bear put spread allows investors to profit from a potential decrease in Ether's price, while limiting their downside risk. 

This strategy is cheaper than buying a put option by itself and benefits from the price of ETH falling, in addition to the time decay of the short put option.

To execute a bear put spread strategy on Bybit, buy an ATM or OTM put option strike price, such as $3,000, and simultaneously sell a put option with a lower strike price, for example, $2,500. Both options should have the same expiration date. The net delta is around 0.2.

Your payoff is based on the change between Ethereum's price and the strike prices of the options. If you buy a $3,000 higher strike put and sell a $2,500 lower strike put that costs $250, here’s your potential profitability:

(Higher Strike Price − Lower Strike Price) − Net Premium Paid =

Higher Strike Price − Net Premium Paid = $3,000 − $2,500 = $500

Neutral Post–Ethereum Spot ETF Approval Price Prediction

In a scenario where the price of Ethereum post–Ethereum Spot ETF approval is neutral, the market sentiment could be balanced, for various reasons. The approval of Ethereum Spot ETFs might be expected by the market, leading to a lack of significant price movement. Additionally, investors might adopt a wait-and-see approach to assess the actual impact of the approval on Ethereum's price, resulting in a temporary equilibrium between buying and selling pressure.

Optimal ETH Option Strategy: Cash-and-Carry Arbitrage Trade

A strategy you can use on Bybit when your position is neutral is that of cash-and-carry 

. The anticipation of Ethereum Spot ETF approval could prompt Futures contracts to trade higher than Spot. To execute a market-neutral trade, traders sell their ETH Futures against buying Spot. 

To execute this ETH trade on Bybit, buy ETH for $3,150 (for example) to establish your long Spot position. Then, sell an equivalent number of ETH June Futures for $3,156. You may then profit from the $6 difference between Futures and Spot.

What if the SEC Doesn’t Approve Ethereum Spot ETFs?

The crypto market is a complex ecosystem, and regulatory decisions are just one of many influences on market dynamics. SEC denial of Ethereum Spot ETFs may lead to a temporary setback for both Ether's price and 

. Investors anticipating the approval may react by selling off their positions, causing a short-term decline in Ethereum's price. 

While some experts believe that the market has already priced in the possibility of Ethereum Spot ETF rejection, many still believe a refusal could cause a short-term dip in prices. The absence of an Ethereum Spot ETF could limit the accessibility of Ethereum to traditional investors, potentially slowing down the influx of institutional capital into the cryptocurrency market.

SEC rejection of an Ethereum Spot ETF could signal regulatory uncertainty and hesitation toward cryptocurrencies, affecting not only Ether but also other digital assets. Such lack of approval could affect investor confidence in the crypto market as a whole, leading to a period of volatility and cautious trading.

Overall, the failure to approve an Ethereum Spot ETF could result in a short-term price drop for Ether, increased market uncertainty and a potential slowdown in institutional adoption of cryptocurrencies.

As the excitement builds around the potential approval of an Ethereum Spot ETF, investors are exploring ways to maximize their exposure to Ethereum. 

 presents an attractive investment opportunity for those interested in staking ETH and earning yields. 

 ETH through Bybit Savings allows investors to earn a yield on their holdings, providing a steady source of passive income. It offers both flexible and fixed-term products, granting investors the flexibility to select the staking option that aligns with their investment strategies. 

Bybit Savings ensures competitive and guaranteed 

s, delivering attractive returns on staked ETH. These features make Bybit Savings a popular choice for investors seeking to seize potential market opportunities post–ETF Spot approval and maximize their returns while staking Ethereum.

Here’s how you can get started staking ETH and earning yield with Bybit Savings:

With the SEC's decision on Ethereum Spot ETFs approaching, traders and investors are preparing for potential market volatility and price movements. Whether the ETFs get approved or not, strategies are available to navigate different market scenarios effectively. From bullish to bearish or neutral outlooks, several strategies can take advantage of market movements after either SEC ETF approval or rejection.

Additionally, exploring opportunities such as staking ETH through Bybit Savings can provide alternative avenues for maximizing returns in the dynamic crypto market. 

Ready to trade Ethereum and seize potential opportunities post–ETF approval? 

 today to explore a range of trading options and investment opportunities.

Intermediate

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Ethereum Price Prediction: How to Trade ETH After SEC Approval of Spot ETFs

We project a low chance of Ether Spot ETF approval by the SEC in May, mainly due to regulators' silence.

What’s Happening Now With the SEC’s Expected Approval of Ether Spot ETFs?

Ether Spot ETFs would track the performance of Ether, directly holding ETH. They differ from Ether Futures ETFs that are available in most markets, which require the periodic rolling of futures contracts and can possess tracking errors. Please refer to this 

The firms applying for listing Ether Spot ETFs in the U.S. are BlackRock, VanEck, ARK 21Shares, Grayscale, Fidelity, Invesco and Galaxy Digital (through a joint proposal), in addition to Franklin Templeton. 

The U.S. SEC has postponed its decision several times because it claims to need more time to consider the applications. However, the deadline for the earliest applicants, BlackRock and Fidelity, is one month away (May 23, 2024). 

It’s widely perceived that SEC rejection would lead to legal action from the applicants.

The market has been building up its anticipation of Ether Spot ETFs since the approval of the listing of Ether Spot ETFs in January 2024.

However, SEC Chair Gary Gensler said at that time that the Bitcoin Spot ETF approvals shouldn't "signal anything about the commission’s views as to the status of other crypto assets under the federal securities laws."

What’s the Chance of SEC Approval of Ether Spot ETFs in May 2024?

Ether’s price surged immediately after the approval of Bitcoin Spot ETFs back in January, and the market anticipates approval of Ether ETFs in the U.S. later this year. However, remarks from SEC Chairperson Gary Gensler on multiple occasions this year have dampened expectations.

In our view, the chance of Ether Spot ETF approval remains dim — despite Hong Kong’s surprising approval of them in April — as the agency is likely to stick to its own assessment before approving Ether Spot ETFs . 

ETH/BTC Ratio from July 2023 to April 2024. Source: Bybit

The dwindling ETH/BTC ratio also illuminates the lowering probability of Ether Spot ETF approval in the U.S., which has dropped below 0.05 —a multi-year low — as shown above. 

Open interest by strike price (ETH options with May 10, 2024 expiration dates). 

Open interest by strike price (ETH options with May 31, 2024 expiration dates). Source: Coinglass

However, the market hasn’t given up, as reflected in the exercise price of ETH options expiring before and after the deadline for the SEC’s decision on ETH Spot ETFs. The exercise price of calls expiring on May 10, 2024, centers on a $3,300~$3,400 interval, while the exercise of calls expiring on May 31, 2024 is remarkably higher, falling between $3,600 and $3,800.

 a substantial increase in Ether’s position by institutions as Bitcoin’s outperformance against Ether continues to test new lows. This suggests that institutions may have prepared for the approval of Ether Spot ETFs, at least in the medium term, following the approval of Bitcoin Spot ETFs.

The key consideration by the SEC lies in whether the ETH token is a security or commodity. Simply put, a token closer to the definition of security might have a higher chance of approval, as the SEC may determine it to be in compliance with Federal securities laws. 

 (PoW) models with no yield generation and is considered the most decentralized cryptocurrency due to its diverse user base. SEC Chairperson Gary Gensler has 

 several times that PoW tokens are unlikely to meet the definition of securities under federal laws. As Ether shifts from PoW to 

 (PoS) in 2021, Ether has a higher chance of qualifying as a security and less chance of getting approved.

In addition, the concentration risk of Ether staking could make it look more like a security. 

 of the total staked ETH on the network. However, the popularity of restaking in recent months may erode Lido’s dominance, and may indirectly ultimately lead to the approval of Ether Spot ETFs in the U.S.

What Makes the SEC’s Approval So Important?

Regions with Approved Bitcoin and Ether Spot ETFs (as of April 23, 2024).

Although Hong Kong is likely ahead of the U.S. in launching Ether Spot ETFs, as their approvals are expected to be completed by the end of this month (April 2024), not many markets worldwide are offering them yet. 

Despite the U.S, not being the first mover, the impact of approval in the U.S. market would likely be more profound due to the nation’s sheer capital size. Bitcoin Spot ETFs have attracted capital of more than $54 billion so far, leaving other markets in the dust in terms of size since their launch there three months ago. As such, it’s expected that Ether Spot ETFs would bring more capital than any of the existing legalized markets combined. 

If Ether Spot ETFs Are Approved, How Much Capital Can They Bring? 

Source: Compiled by Bybit (data as of April 23, 2024)

Based on the performance of Bitcoin Spot ETFs so far, it’s estimated that Ether Spot ETFs would accumulate at least $16 billion in capital.

Source:Compiled by Bybit (data as of April 23, 2024)

Nonetheless, if the SEC allows a version of staked Ether ETFs, the expected AUM is beyond imagination, as the current native yield from Ether staking amounts to 3.3%, higher than many of its competing asset classes.

Could Approval of Spot Ether ETFs Trigger Another Crypto Rally?

The possible approval of Bitcoin Spot ETFs in September 2023 reversed Bitcoin's bearish trend, creating a new all-time high right after the actual ETF approval. Bitcoin's outperformance gave rise to an ensuing rally from other tokens, as speculation arose from upbeat market sentiment. As Bitcoin Spot ETF approval hit the headlines, new investors were tempted into the cryptocurrency and sustained the rally.

UST Market Capitalization. Source: CoinGecko (as of April 23, 2024)

The above chart indicates the market capitalization of USDT, the largest cryptocurrency. The increase in its market cap arises from increasing supply as it’s pegged to the U.S. dollar. Historically, the increasing supply coincided with the surging price action of the broader cryptocurrency, as the supply represents the on-chain capital. 

Therefore, the possible approval of Ether Spot ETFs will likely sustain the current bull market. New investors are expected to inject new capital into the crypto market, further boosting the supply of USDT. What’s more, approval could spur the broader price increase of Ethereum ecosystem tokens, primarily DeFi and 

Advanced

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What’s the Chance of Ether Spot ETF Approval by the SEC in May? Can the Market Sustain Another Rally?

Tuna Chain is a modular Layer 2 solution that functions on Bitcoin while also integrating with Ethereum. Learn more about how it works in this article.

 is rightfully known for its security through its use of 

 offers greater versatility. Until recently, blockchain projects had to choose between the two. Now, however, a hybrid solution is available that blends the benefits of both of these leading blockchains and takes a bold leap into the future.

 that functions on Bitcoin while also integrating with Ethereum.

) is strongly rooted in elevating the user experience (UX). Bitcoin is the most trusted cryptocurrency, largely due to the recognized strength of its security protocols. However, while it excels in security, it lacks the versatility that ultimately fosters innovation. In this regard, Ethereum is viewed as a superior blockchain. 

Tuna Chain’s modular Layer 2 solution works on Bitcoin through a 

 hybrid layer while offering Ethereum functionality. It uses 

-powered modularity to minimize transaction costs. At the same time, this modularity improves both trust and efficiency. Tuna Chain currently supports Solana, Ethereum and Bitcoin transactions. It works with Bybit, Phantom, MetaMask, UniSat Wallet and OKX Wallet.

Tuna Chain is a new project that was established by three unknown individuals, known under the names of Tuna Nigiri, Tuna Sushi and Tuna Sashimi. Each team member brings their unique experiences and knowledge with blockchain, cryptography and 

 to move Tuna Chain forward. Tuna Chain is financially supported by BSC News, Normie Capital, Serafund, ArkStream Capital, Cogitent Ventures, MH Ventures and other angel investors. After its Ocean Festival and Ocean Trio, Tuna Chain now has over 1.3 million wallets connected on the Tuna Chain Testnet, with a total 

The purpose of Tuna Chain is to bridge the gap between Bitcoin and Ethereum. Although Bitcoin’s chain boasts superlative security, it lacks the versatility that Ethereum’s 

 provides. As a hybrid Layer 2 solution, Tuna Chain’s primary goal is to blend the two. By doing so, its founders want to push the envelope on the future of blockchains and provide a better UX.

Tuna Chain’s functionality is based on three core features: the Toro native 

, Celestia-powered modularity and a hybrid ZK-OP layer. With the Toro stablecoin, users can purchase new digital assets through the overcollateralization of their BTC supply. Meanwhile, Celestia-powered modularity improves data availability, and the ZK-OP hybrid layer executes smart contracts with fast, secure transactions.

Rollup Solutions and Operational Mechanism of Bitcoin Layer 2

Layer 2 solutions similar to those found on Ethereum enhance Bitcoin's scalability, using technologies such as 

 (ZK). Tuna Chain enhances Bitcoin's transaction capacity by integrating optimistic rollup technology into its Layer 2 framework.

Securing Native Assets on Bitcoin: Leveraging Taproot's Upgrade

 upgrade into the Bitcoin network marks a significant advancement in the security of its native assets. This update incorporates advanced cryptographic techniques, such as Schnorr Signatures, MAST and Tapscript. To further secure these assets, Tuna Chain has implemented a multisignature security model and is exploring the addition of external validators to its network security protocols.

Tuna Chain processes transactions through a detailed system that begins with the precise arrangement and execution of transactions. These are then reliably recorded on 

's data availability layer and conclusively verified on the Bitcoin blockchain. Verifiers are essential to the chain's integrity, quickly producing fraudproofs to address any transaction discrepancies and ensure the network remains secure and reliable.

Tuna Chain is a next-level Layer 2 solution that moves blockchain into the future. Each of its core features provides unique benefits to support a superior UX. 

Tuna Chain uses Celestia-powered modularity to optimize its Layer 2 functionality. Specifically, this modularity is supported by Layer 2 data management that enhances trust, improves efficiency and reduces transaction fees.

The ZK-OP Layer is Tuna Chain’s hybrid Layer 2. This layer utilizes a dual-phase architecture that integrates Ethereum’s benefits with those of Bitcoin. By doing so, it empowers smart contracts and accelerates secure transactions.

 is a grand opening event celebrating Tuna Chain’s launch. During this grand opening, the first round of TUN tokens will be distributed. Distribution cap for this initial release is based on 

 growth driven by the community, and could range between 2% and 21%. The token supply increases by 2% as each new milestone is achieved.

, the setup experience for new community members, consists of Calm Waters, Whimsical Tides and Majestic Depths. With Calm Waters, new users can receive 60 points for following Tuna Chain on social media and linking their wallet. Additional points are available by referring friends to Tuna Chain. Whimsical Tides, the testnet phase, is still in development along with Majestic Depths.

In the first quarter of 2024, Tuna Chain successfully completed several milestones, including the launch of the Tuna Testnet — Alpha, Ocean Trio Points campaign, Ocean Festival (which highlights the TVL) and the rollout of the TunaChain Explorer. 

Moving into Q2 2024, progress is ongoing with significant developments. Tuna Chain’s team is currently deploying an optimistic rollup (OP)-based Mainnet, establishing a native bridge from Bitcoin to the Tuna Mainnet, launching a Mainnet decentralized exchange (

), and developing a modular data availability (DA) layer.

Tuna Chain functions with three primary tokens: TORO, TUNA and WOOG. Each serves a different and integral role.

TORO, Tuna Chain’s native stablecoin, helps users transform their BTC into their choice of high-yield digital assets. This is accomplished seamlessly and with full transactional stability. The user doesn’t need to liquidate the BTC to complete the transaction.

 of Tuna Chain, is used for various purposes, such as revenue generation, funding builders and contributors, benefiting token holders, incentivizing users and community members, and promoting community engagement within the Tuna Chain ecosystem.

TUNA has a total token supply of 210,000,000.

 token that acts as the primary ticket into the Tuna Chain ecosystem. Only 200 of 1,000 available WOOG tokens were distributed at the BRC-20 Launchpad event. The remaining WOOG will be distributed only when they’re activated by external forces.

Looking to get your hands on the TUNA token? Bybit will soon offer it via our 

In the meantime, you can also purchase TUNA through 

WOOG tokens grant access to the Tuna Chain ecosystem. Of the total supply of 1,000 tokens, only 200 are currently scheduled to be released. These tokens are exclusively available through the 

. There’s a purchase limit of one WOOG token. While 800 WOOG tokens will remain, they’re sealed, and their release isn’t scheduled. You must have an active Bybit account with a funded wallet to participate in the event. 

TUNA tokens play a fundamental role in governance of the Tuna Chain’s unique hybrid Layer 2 chain, designed to deliver the benefits offered by both Bitcoin and Ethereum. Tuna Chain is presented as the future of blockchain, and is poised to change the blockchain landscape in exciting ways, which could place a premium on TUNA tokens. 

As an investment, TUNA should be purchased conscientiously because the value of the tokens will decrease when additional tokens are released, even for a short period of time. In addition, all cryptocurrencies are speculative in nature, with a risk of partial or complete loss. Therefore, 

 cryptocurrencies before making an investment.

Tuna Chain is a hybrid Layer 2 solution that provides a much-needed service in the blockchain world. By bridging the gap between Bitcoin and Ethereum, it allows users to enjoy the best of both worlds. In doing so, it has the potential to move the dial forward significantly in blockchain technology. Moving forward, Tuna Chain is a platform worthy of attention.

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Tuna Chain (TUNA): Reinventing Bitcoin With a ZK-OP Approach

We'll guide you through step-by-step to opening an account on Bybit to start your crypto trading journey now.

With more crypto projects being launched by the day, many traders are eager to jump on the bandwagon and take advantage of these potential investment opportunities. If you’re one of them, consider riding the crypto wave with Bybit! But before you do so, be sure to 

 first. Read our detailed guide on how you can create a Bybit account to start your trading journey today!

There are two ways for you to create a Bybit account. You can choose to sign up with your email address, or with your mobile phone number, whichever is more convenient for you to use. You can also choose to sign up on your desktop or on your mobile phone. 

Please note that if your country falls under Bybit's 

, you will not be able to sign up with Bybit. 

Choose your preferred method of signing up: 

. Then, input the necessary details accordingly. 

Note that the Referral Code field is optional and can be left blank.

 will pop up. If you’re not from any of the countries listed, click on 

Complete the reCAPTCHA verification and enter the verification code that you’ve received based on your preferred method of registration. 

, you’ll receive the code in your email inbox or spam/junk inbox. If you’ve selected 

, you’ll receive an SMS code on your mobile device.

Note that the Referral Code field is optional, and can be left blank.

A window showing a list of restricted countries and regions will pop up. If you’re not from any of the countries listed, select 

Complete the reCAPTCHA verification and input the verification code that you’ve received based on your preferred method of registration. 

Once you’ve successfully registered, you can proceed to 

You can either deposit your crypto into your Bybit account from an external wallet or another crypto exchange, or 

on Bybit to start trading. There are several ways to buy crypto on Bybit. You can do so through 

 (via credit/debit card or third-party payments like Google Pay), 

After you’ve funded your account, you can proceed to explore the various Bybit products available — such as the 

Now that you’ve learned how to create a Bybit account, you can explore the Bybit platform and make trades whenever you spot potential investment opportunities. In addition, stay tuned to our 

 for educational materials to aid you in your crypto journey.

Beginner

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Bybit Sign-Up: How to Create a Bybit Account (Step-By-Step)

web3

Explainers

ERC-5169 is an Ethereum token standard that facilitates the creation of tokens with embedded scripts that contain executable programming logic.

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The year 2015 witnessed a true revolution in the blockchain industry when 

 they’re based on, DApps introduced the capability to execute programming logic directly on the 

. Over the following few years, Ethereum’s platform continued to drive innovation by unveiling a succession of crypto token standards.

The foundational ERC-20 standard, which underpins DApp functionality, was formally endorsed in 2017. That same year, the platform announced another game-changing innovation — the ERC-721 

 (NFT) standard. Two years later, the ERC-1155 multi-token standard was introduced on the blockchain by the 

 (ENJ) gaming platform. These advancements in token standards and their underlying technologies continue to support the functionality of the world's largest smart contract chain.

Ethereum’s dedication to token standard innovations hasn’t diminished. In 2023, a new standard — ERC-5169 — was adopted specifically to support smart tokens. The ERC-5169 token has executable scripts and programming logic embedded within it. Its potential to completely change the way Ethereum tokens and DApps are used could lead it to emerge as a key bridge between the worlds of 

ERC-5169 is an Ethereum standard for the development of tokens that include embedded executable scripts. 

The script code within an ERC-5169 token turns it into a truly “smart token.” Such tokens are capable of executing complex actions, such as interacting with external platforms and devices, or carrying out rule-based operations which were previously only possible via the use of smart contracts.

The ERC-5169 token standard was first proposed in May 2022 by Smart Token Labs, an Australian blockchain technology startup founded in 2017. Smart Token Labs has also introduced a couple of associated technologies — the TokenScript development framework and the Smart Layer distributed network — to facilitate the launch and management of smart tokens.

ERC-5169 is a unique token standard because it represents the first proposal in the history of Ethereum — or the entire blockchain industry, for that matter — to attach executable code to a single token. The standard has the potential to drastically alter the way that entire ecosystems of DApps, smart contracts and blockchain crypto tokens are utilized. That’s because ERC-5169 essentially enables tokens to act as self-contained mini DApps, without the need for smart contract–based apps we’re accustomed to.

Thanks to the executable programming logic attached to individual ERC-5169 tokens, the standard can be used to create crypto assets that can interact not only with other tokens and blockchain platforms, but also with external Web 2.0 websites, devices and products.

ERC-5169 can also facilitate the development of dynamic and complex crypto tokens, such as dynamic NFTs. While such NFTs currently utilize smart contracts for their functionality, the ERC-5169 standard makes it possible to embed the entire code responsible for dynamic changes into a token. This lets an NFT travel across different platforms that might not be compatible with each other, while still retaining all of its dynamic properties.

How Does the ERC-5169 Token Standard Work?

The ERC-5169 standard adds a new function, 

, to the token’s smart contract — the piece of code on the blockchain that allows you to issue and manage the token. This scriptURI() function contains a reference to an executable code that the ERC-5160 token can include. In this way, the token becomes a self-contained asset with embedded programming logic — essentially a mini-DApp.

The standard’s creator, Smart Token Labs, also offers two critical technologies that allow ERC-5169 tokens to interact with external web3 and Web 2.0 environments — TokenScript and Smart Layer.

TokenScript is a code framework that provides tools to create a front-end interface and functionality for external apps and programs to interact with ERC-5169 tokens. While the actual token contains the necessary code and programming logic, TokenScript translates these into usable functions and interfaces, adjusted for the app that utilizes the token. In essence, TokenScript is a middle layer between the end-user and the ERC-5169 token they interact with.

As a connecting layer between users and ERC-5169 tokens, TokenScript also provides additional functions to extend and modify how users interact with their tokens.

ERC-5169: Bridging Web 2.0 and Web3 With Dynamic Tokens

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