It's incredible how easy it is to create colored coins on the current devnet. That's amazing! And those coins are treated just like normal iotas. Has any other chain accomplished to publish colored coins? I'm aware of Bitcoins colored coins but I've never seen one. It looks like the whole industry went for tokens on the smart contract platform.
It is much easier and cheaper to create an endless amount of ERC 20 tokens (if you want to create an ICO, etc) And so those ERC 20 have their total own tokenomics in supply and value. A colored coin in Bitcoin or IOTA is always pledged to the real asset prize (as a minimum price) and is taken out of the total supply. So advantages are surely a much higher security as ERC cloned tokens, as the colored coins are handled totally on Level1 in Bitcoin or IOTA and so there is no chance that the creator or the SC is putting backdoors in the code to rugpull, or doubles the supply whenever he wants. So when its a bout real world asset representation on L1 in Crypto the colored coin is the way to go...Bound to the price of the real coins as minimum and cannot be inflated - so can represent a unique real world asset much more secure.
In addition, it also is worth mentioning that ERC 20 tokens is its own ledger with the rules defined by the smart contract, so it is a very flexible approach. That is why the whole market moved to that direction. However, it is non scalable by its nature because access to ERC 20 contract is strictly serialized, globally. Besides, ERC 20 tokens never leave the ERC 20 contract. Meanwhile, IOTA colored tokens are scalable and move between addresses in parallel. ERC20 is a bank, while colored tokens is a cash