What are the main use cases for Ethereum?

Decentralized Finance (DeFi)

1. Ethereum enables peer-to-peer lending platforms where users supply and borrow assets without intermediaries.

2. Automated market makers like Uniswap operate entirely on Ethereum smart contracts to facilitate token swaps.

3. Yield farming protocols distribute governance tokens as rewards for providing liquidity to pools.

4. Synthetic asset platforms replicate real-world financial instruments such as stocks or commodities using ETH-based collateral.

5. Flash loans allow borrowers to execute complex arbitrage or liquidation strategies in a single transaction, with no upfront capital required.

Non-Fungible Tokens (NFTs)

1. Digital art marketplaces like Foundation and SuperRare rely on Ethereum’s ERC-721 standard to verify provenance and ownership.

2. Gaming ecosystems integrate NFTs as tradable in-game items, enabling cross-application interoperability.

3. Music creators mint limited-edition albums or royalties as NFTs, assigning programmable revenue splits directly on-chain.

4. Domain name services such as ENS issue human-readable addresses mapped to wallet addresses via Ethereum contracts.

5. Identity verification tools use NFTs to represent credentials like diplomas or licenses, controlled solely by the holder.

Decentralized Autonomous Organizations (DAOs)

1. Governance tokens issued on Ethereum grant voting rights over protocol upgrades, treasury allocations, and parameter changes.

2. DAO treasuries hold funds in multi-signature wallets governed by on-chain proposals and community ratification.

3. Membership-based collectives coordinate funding for open-source development through recurring token-weighted voting cycles.

4. Legal wrappers like Wyoming LLCs are paired with Ethereum-based voting mechanisms to align off-chain enforceability with on-chain execution.

5. Grants programs distribute ETH to contributors based on milestone completion verified by trusted oracles and community review.

Enterprise and Institutional Applications

1. Supply chain tracking systems record product origin, handling events, and certifications across global partners using immutable Ethereum logs.

2. Central bank digital currency (CBDC) pilots explore Ethereum-compatible sidechains for settlement efficiency and audit transparency.

3. Insurance protocols automate claims payouts when external data feeds—such as weather APIs or flight status services—trigger predefined conditions.

4. Real estate tokenization platforms fractionalize property titles into ERC-20 tokens, enabling secondary trading and compliance-enforced transfers.

5. Healthcare data sharing networks use zero-knowledge proofs on Ethereum to validate patient consent without exposing sensitive records.

Frequently Asked Questions

Q: Can Ethereum be used for payments like Bitcoin?Yes. Merchants accept ETH directly or via payment processors that convert it instantly to fiat. Its programmability supports conditional payments and recurring billing.

Q: Why do developers choose Ethereum over other blockchains for dApps?Ethereum offers the most mature tooling ecosystem, including Truffle, Hardhat, and Remix, alongside the largest pool of audited smart contract libraries and security researchers.

Q: Are all tokens on Ethereum the same?No. ERC-20 tokens represent fungible assets like stablecoins; ERC-721 tokens are non-fungible and unique; ERC-1155 supports both types in one contract, optimizing gas usage.

Q: How does Ethereum handle scalability concerns for high-frequency applications?Ethereum uses layer-2 solutions like Optimism and Arbitrum, which process transactions off-chain and post cryptographic proofs to the mainnet, drastically reducing fees and latency while inheriting base-layer security.