Crypto tokens are like the Internet. They have different utilities and their utilities don't depend on how you define or classify them.
Trading, investment, governance and from internal to external platforms. I don't believe that you can find any token on the market that has only one utility, and only has internally ecosystem utility.
Topic: [EDU] Different Types Of Crypto Tokens Explained. (Read 104 times)
Just a few distinctions between the various types of crypto tokens, may seem unimpressive to veteran members who are well-versed in crypto, but it will serve as a good foundation for those new to the crypto world who have no idea what each token on the exchanges represents or which category it belongs to. I gave an example of each of the token groups because there were just too many to list. This is for educational purposes only; if you want to learn more, check out the resources below.
Platform Token
Chain.link
These Tokens are created to support a decentralized application on the blockchain, for example, uni swap, is it a centralized application that allows users to swap out Ethereum tokens for other Ethereum tokens. And even though they are a decentralized app, they also have their own token, the uni swap token is given out to those who invest in their platform, and it has the promise that eventually token holders can vote on changes in the future and maybe even earn some of the profits from the trades.
Security Tokens.
Blockchain.capital
The purpose of security tokens is to indicate ownership of another asset. For example, if you wanted to buy gold but didn't want to keep it, someone could design a token that is linked to the price of gold. So instead of owning the gold, you possess a representation of it, which is supposedly safer because hacking an Ethereum token is far more difficult than breaking into someone's home.
Transactional Tokens.
Ronin
Transactional tokens are used as a fast and easy way to transfer money. If we think of the coin DIA, it is currently pegged to the United States dollar and it's easy for people to pay for say maybe coffee or buying that shirt you like at the local store. You can use it the same as cash however, the expenses of it are super low.
Utility Tokens.
BasicattentionToken
Utility tokens, on the other hand, are tokens with a monetary value attached to their ownership. Basicattention is an Ethereum token that may be used to advertise on the brave browser, for example. To put it another way, if I wanted to promote this site on the brave web browser, I could easily do so using my BT token. In other words, utility tokens can perform functions that security tokens cannot. You can acquire and hold utility tokens, but they can also be utilized for commercial purposes.
Governance Tokens
MRK
Governance tokens allow token holders to vote on certain things. For example, uniSwap could be a governance token and a future version of the uni swap exchange. Token holders could choose to vote to raise the fee of a uniswap trade from point 3% 2.6%. And everyone with a token would be allowed to vote on that change. the decision with the most votes chooses the winner. so you actually have more voting power by holding more tokens. obviously, there's a pretty good reason to hold more tokens by holding more you can actually control the platform more but this comes up with the problem of the authority being centralized.
Summary
Platform tokens support Dapps built on the blockchain.
Security tokens represent legal ownership of a physical or digital asset.
Transactional tokens serve as units of account and are exchanged for goods and services.
Utility tokens are integrated into an existing protocol and used to access the services of that protocol.
Governance tokens fuel blockchain-based voting systems.
Reference Link 1 Link 2
Platform Token
Chain.link
These Tokens are created to support a decentralized application on the blockchain, for example, uni swap, is it a centralized application that allows users to swap out Ethereum tokens for other Ethereum tokens. And even though they are a decentralized app, they also have their own token, the uni swap token is given out to those who invest in their platform, and it has the promise that eventually token holders can vote on changes in the future and maybe even earn some of the profits from the trades.
Security Tokens.
Blockchain.capital
The purpose of security tokens is to indicate ownership of another asset. For example, if you wanted to buy gold but didn't want to keep it, someone could design a token that is linked to the price of gold. So instead of owning the gold, you possess a representation of it, which is supposedly safer because hacking an Ethereum token is far more difficult than breaking into someone's home.
Transactional Tokens.
Ronin
Transactional tokens are used as a fast and easy way to transfer money. If we think of the coin DIA, it is currently pegged to the United States dollar and it's easy for people to pay for say maybe coffee or buying that shirt you like at the local store. You can use it the same as cash however, the expenses of it are super low.
Utility Tokens.
BasicattentionToken
Utility tokens, on the other hand, are tokens with a monetary value attached to their ownership. Basicattention is an Ethereum token that may be used to advertise on the brave browser, for example. To put it another way, if I wanted to promote this site on the brave web browser, I could easily do so using my BT token. In other words, utility tokens can perform functions that security tokens cannot. You can acquire and hold utility tokens, but they can also be utilized for commercial purposes.
Governance Tokens
MRK
Governance tokens allow token holders to vote on certain things. For example, uniSwap could be a governance token and a future version of the uni swap exchange. Token holders could choose to vote to raise the fee of a uniswap trade from point 3% 2.6%. And everyone with a token would be allowed to vote on that change. the decision with the most votes chooses the winner. so you actually have more voting power by holding more tokens. obviously, there's a pretty good reason to hold more tokens by holding more you can actually control the platform more but this comes up with the problem of the authority being centralized.
Summary
Platform tokens support Dapps built on the blockchain.
Security tokens represent legal ownership of a physical or digital asset.
Transactional tokens serve as units of account and are exchanged for goods and services.
Utility tokens are integrated into an existing protocol and used to access the services of that protocol.
Governance tokens fuel blockchain-based voting systems.
Reference Link 1 Link 2
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