TOKEN

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DEFINITION

Tokens are objects similar to coins, although they have no value on their own. This is because the tokens are issued by a private entity for a specific use and low-value materials are normally used in their preparation.

This means that, in most cases, the creation of a token stems from a private need and therefore has little value. However, their value can be very high within the community that makes use of them. This is precisely what happens in cryptocurrencies, where tokens like Bitcoin are widely accepted and represent high value.

In fact, the launch and presentation of tokens has become very popular, as it is an elemental part of the Initial Coin Offering (ICO).

TYPES OF CRYPTOGRAPHIC TOKENS

1) Security Token: These are similar to any other known token, but tied to traditional security (values) and their characteristics.

2) Utility Token: They are application or user “tokens”. They allow future access to the products or services offered by a company. Therefore, they are not created to be an investment.

3) Equity Token: They are a very special type of token closely related to security. These work like a traditional stock asset. They represent ownership of some third-party asset or company. In addition, its value is associated with the success or failure of said property.

TOKEN STANDARDS

1) ERC-20: This is the most popular standard. They are fungible tokens (that is, they can be exchanged between them) and they implement an API for their development through smart contracts. This standard allows the interaction of smart contracts and DApps, facilitating the creation of an interoperable ecosystem.

2) ERC-721: It is the most widely used standard for the creation of NFTs. This standard allows to implement unique characteristics to each unit, making them unique and cannot be changed by another.

3) ERC-1155: This is a type of token that can mix the characteristics of ERC-20 and ERC-721 tokens.

4) SLP: The native standard of the Solana ecosystem. This has a unique feature and that is that they are usually compatible with the ERC-20 and ERC-721 standards.

5) BEP-20: This is the Binance Smart Chain (BSC) standard and offers a flexible framework for the development of utility tokens, stablecoins and even NFTs.

6) TRC-10 and TRC-20: this is the native standard of the Tron network, with multi-smart contract capability and some unique features such as low gas rates or interoperability.

7) ERC-20 Waves: This is a version of the Ethereum standard developed by Waves for the development of enterprise-level decentralized applications. It offers interoperability capabilities with different protocols and exchanges.

8) NEP-5: This is the standard for the native tokens of the NEO blockchain. This standard has a particularity and that is that all tokens contribute in some way to the development and expansion of the NEO ecosystem.