Cryptocurrency tokens are digital property which might be constructed on prime of an present blockchain community. Tokens have turn into a well-liked method for companies to lift funds by means of Preliminary Coin Choices (ICOs) and are used for quite a lot of functions akin to cost for items and providers, voting rights, entry to sure options, and extra. On this article, we are going to discover the several types of cryptocurrency tokens with examples for every.
- Utility Tokens
Utility tokens are used to entry or buy providers or merchandise inside a blockchain community. These tokens should not primarily designed as a retailer of worth or funding, however reasonably serve a particular perform throughout the community. Examples of utility tokens embrace:
- a) XCAD Community (XCAD): By tokenizing the interplay of every creator’s viewers and their content material, XCAD Community offers creators the DeFi instruments they should construct an economic system that rewards them for his or her efforts. The utility token used right here is XCAD.
- b) LunrToken (LUNR): The utility token Lunr was created for LunarCrush. A social intelligence software known as LunarCrush analyzes international social media knowledge to provide insights that cryptocurrency buyers can act on.
- Safety Tokens
Safety tokens characterize possession in an asset, akin to shares, actual property, or commodities, and are topic to authorities laws. Examples of safety tokens embrace:
- a) Polymath (POLY): Polymath is a safety token platform that permits the creation, issuance, and administration of safety tokens on the blockchain.
- b) Bcap (Blockchain Capital) (BCAP): Moreover, they’re a gaggle of businesspeople who work exhausting and invent new methods to make use of the enterprise mannequin. They developed the Safety Token in April 2017 after they established the BCAP, a tokenized enterprise capital fund funded by a safety token issuance.
- Fee Tokens
Fee tokens are designed for use as a method of trade for items and providers. These tokens are much like conventional currencies in that they’re a retailer of worth and can be utilized to make transactions. Examples of cost tokens embrace:
- a) Bitcoin (BTC) : Bitcoin is probably the most well-known cost token and is accepted by many retailers as a type of cost.
- b) Bitcoin Money (BCH) : With its fast transfers, small charges, secrecy, and elevated block dimension, Bitcoin Money (BCH) seeks to turn into a dependable type of digital money.
- Governance Tokens
Governance tokens are used to take part within the decision-making means of a blockchain community. Holders of those tokens can vote on proposals for community upgrades, modifications to the protocol, and extra. Examples of governance tokens embrace:
- a) Maker (MKR): Maker is a decentralized lending platform that permits customers to create stablecoins. Holders of MKR tokens can vote on proposals associated to the platform’s governance and danger administration.
- b) Rarible (RARI) : The RARI token is utilized by Rarible, a creator-focused NFT market and issuance platform, to empower customers who actively interact with the system. The RARI token, which is used to reward lively customers and for collaborating within the protocol’s governance, is an important part of the platform.
- Non-fungible Tokens
Non-fungible tokens are distinctive digital property which might be verified with the assistance of blockchain tech. They’re a kind of digital certificates of possession that may be purchased and offered like bodily property, akin to artwork or collectibles. NFTs can characterize a variety of digital content material, together with artwork, music, movies, and even tweets.
- a) “Everydays: The First 5000 Days” by artist Beeple, which offered for $69 million at a Christie’s public sale.
- b) NBA’s “High Shot”, which sells digital collectible highlights of basketball video games as NFTs.
Lastly, there are lots of several types of cryptocurrency tokens, every with their distinctive options and traits. These tokens have turn into an necessary a part of the blockchain ecosystem, enabling companies to lift funds and customers to entry a variety of providers and merchandise.
Disclosure: This isn’t buying and selling or funding recommendation. At all times do your analysis earlier than shopping for any cryptocurrency or investing in any tasks.
Picture Supply: Picture by Kanchanara on Unsplash // Picture Results by Colorcinch