Technology

Tokens

Tokens are programmatic digital assets: they represent ownership, utility, or value on a blockchain, with rules defined by a smart contract like the ERC-20 standard.

Tokens are programmatic digital assets representing value, rights, or utility on a blockchain network (e.g., Ethereum). They are distinct from a network's native coin (like ETH) because a smart contract, such as the widely adopted ERC-20 standard, defines their rules, supply, and functionality. We categorize them by function: *Utility Tokens* grant access to a service (e.g., Filecoin's FIL for storage); *Security Tokens* represent ownership in an underlying asset (e.g., tokenized real estate); and *Governance Tokens* provide voting rights in a DAO (e.g., Compound's COMP). They are also classified by interchangeability: *Fungible Tokens* (interchangeable, like USDC) or *Non-Fungible Tokens (NFTs)* (unique, representing single assets like digital art).