Token

A digital asset created on an existing blockchain rather than its own native chain.

A token is a digital asset created on top of an existing blockchain using that chain's smart contract functionality. Unlike coins (which are native to their own blockchain), tokens ride on another blockchain's infrastructure.

Token vs Coin

Coin: Has its own blockchain (BTC on Bitcoin, ETH on Ethereum, SOL on Solana).

Token: Built on another blockchain (USDT, UNI, LINK — all ERC-20 tokens on Ethereum).

Token Standards

ERC-20: The most common fungible token standard on Ethereum.

BEP-20: The equivalent on BNB Chain.

SPL: Token standard on Solana.

ERC-721: Non-fungible token standard (NFTs).

ERC-1155: Multi-token standard supporting both fungible and non-fungible tokens.

Types of Tokens

Utility Tokens: Provide access to a product or service.

Governance Tokens: Grant voting rights in a protocol.

Security Tokens: Represent ownership in real-world assets.

Frequently Asked Questions

What is a crypto token?

A token is a digital asset created on an existing blockchain using smart contracts, unlike coins which have their own blockchain. USDT, UNI, and LINK are tokens built on Ethereum. Tokens can represent utility, governance, or ownership rights.

What are the different types of tokens?

Main types include utility tokens (access to a service), governance tokens (voting rights), security tokens (represent real-world assets), stablecoins (pegged to fiat), and NFTs (unique digital assets). Each serves different purposes.