Homework Post for Prof. @reminiscence01 Beginner's Course / Understanding Tokens by @Tejumola
Good Evening Everyone,
What do you understand by Token and give an example of at least 5 tokens and identify the blockchain it is built on. ( give at least 3 different Blockchains)
Tokens are said to be a digital cryptocurrency that is created on an existing blockchain. It does not have a blockchain of its own because blockchain is expensive and it requires the user to understand coding and programming. I.e. a well-experienced person with high knowledge of coding and programming is required.
When a user is ready to create a new project in the crypto market is either he creates a blockchain which is like the foundation of a token, or he creates a token for his new project on an existing blockchain. The high level of understanding of both coding and programming and stress now makes blockchain to be difficult to create. So, instead of users starting with the creation of blockchain, users can build their token on an existing blockchain.
The token that is created by users for their project is issued out through ICO or presale to finance the project. The token that is created for the project serves as a stake because it is used to finance the project and governing token. The token is a digital asset that can be created by anyone making use of an established platform such as Binance chain or Tron blockchain. BitTorrent is an example of a Token that is built on the Tron blockchain.
Give an example of at least 5 tokens and identify the blockchain it is built on. ( give at least 3 different Blockchains)
| TOKENS | BLOCKCHAINS |
|---|---|
| Uniswap (UNI) | Ethereum |
| Cake | Binance chain |
| Wirex Token (WXT) | Stellar |
| Terra (LUNA) | Bitcoin |
| Pixel Tile | Cardano |
| BitTorrent | Tron |
| Thor chain | Binance chain |
| WINKlink | Tron |
What is the difference between a token and a coin?
Token and coin are different. Though they are somehow similar, someone without the knowledge or understanding of the two will think they are the same thing because they are both digital assets that can be stored in a wallet, can hold value, and also can be traded. So, I will be explaining some differences below.
| TOKENS | COINS |
|---|---|
| Tokens are known by users through ICOs. | Coins are mostly distributed to users through mining. |
| Tokens can represent shares and also give access to services. | While coins are used as a payment method or processing payment. |
| Tokens are created daily. So, they are unlimited. | While, Coins has limited supply. |
| Tokens are created for particular use in the project. | while, coins are used independently. |
| The tokens are easy to create because they can be created on an existing blockchain. | While, Coins are difficult to create. |
| Tokens are built on another blockchain. | Coins are native to its blockchain. |
Explain the different categories token listed below and explain its features.
* Utility tokens
* Security tokens
* Equity tokens
* Non-fungible token (NFT)
- Utility Tokens -
This is a special token that is issued to the investor at the beginning of a project. It helps in the capitalizing and financing of projects. These tokens are not designed as a traditional currency but they stand as the right to use or allows users to have access to the company service or product. It is also a token that is used for participation in mass sales just to raise capital.
- Security Token -
A security token is a token that is issued on a permissioned blockchain, which represent a stake in a foreign stock or assets. An Organisation or business entity can also provide security tokens that can serve the same purpose such as stock, bonds, and so on.
- Equity Token -
An equity token is a token that serves more like a traditional token but is just that the equity token holder owns some form of ownership in a way that the token they have represent how much ownership they possess. Equity tokens may be in different forms such as stocks, futures, tokenized real estate, and so on. This token, which is an equity token can also represent third-party assets, venture property, and so on.
- Non-fungible token (NFT)
NFT are similar to cryptocurrency because they are both built using the same kind of programming as a cryptocurrency but NFT are not like normal cryptocurrency such as Bitcoin, Ether and so on. NFT is a digital unique token that can hold value as a form of art or culture and also as a cryptocurrency. NFT tokens can be traded. They are very special, they are created in a way that they can not be changed for some other fungible token. It is a unique token
Token is decentralized. i.e. they are not controlled by any authority or we can also say tokens are independent of any authority
Tokens can be traded. Such as buying and selling.
Make your research and write extensively on any token you listed in question one. (Must include features of the token, the aim of the project, Use cases).
Uniswap (UNI)
source
Uniswap (UNI) is a token that is built on the Etheruem blockchain. It is a decentralized token and also a uniswap native token. UNI is also regarded as a governance token. It is a token that gives rights to holders to vote on new development and change in the platform. Such as how minted token should be distributed to everyone such as the community and the development as well as to vote on any changes on the fee structure.
UNI tokens came into existence in September 2020. As at when I was doing my home UNI price was $28.66 with a total market cap of $16,849,143,763. UNI token is rated number 11 according to coinmarket. It has a circulating supply of 587,462,596 UNI.
coinmarket Features of UNI Tokens
It is built on Ethereum Blockchain.
Uniswap token can be purchased and can also be traded.
Uniswap exchange operates as an automated market maker.
Uniswap (UNI) can be referred to as a cryptocurrency and also a decentralized exchange.
Uniswap exchange makes use of its UNI token as a governance model.
Users or holders can stake their tokens in the liquidity pool and also vote when making governance decisions.
In conclusion, having a good understanding of both tokens and coins is very important because it will make one be able to differentiate between the two when they are in use and also understand how it works.
I want to use this medium to appreciate my amiable lecturer for this wonderful lecture. Thank you very much for reading through my post.
Hello @tejumola, I’m glad you participated in the 8th week of the Beginner’s class at the Steemit Crypto Academy. Your grades in this task are as follows:
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Thank you Prof.