Token
Digital units of value built on existing blockchains, representing assets, utilities, or stakes in decentralized ecosystems.
What is Token?
A token is a digital unit of value built on a blockchain, representing assets, utilities, or stakes, distinct from native coins like BTC or ETH. Tokens enable fundraising, decentralized finance (DeFi), and real-world asset representations(RWAs). They leverage underlying networks for security and interoperability, powering decentralized applications (dApps) and ecosystems.
People sometimes refer to all digital assets as tokens, though technically tokens are built on existing blockchains while native coin have their own blockchain networks.
Related Terms
Money Markets
Financial markets for short-term borrowing and lending, typically under one year, involving instruments like repos, commercial paper, and CDs.
Memecoin
A digital asset inspired by internet memes or viral trends, driven by community hype rather than utility, and known for extreme price volatility.
NAV
Net Asset Value - the per-share value of an investment fund's assets minus liabilities, calculated daily to determine share prices.
Rug Pull
A scam in the digital asset space where developers or promoters of a project abandon it after raising funds, leaving investors with worthless tokens or assets.
RWAs
Real-world Assets tokenized on blockchain for fractional ownership, liquidity, and transparency, bridging traditional and decentralized finance.
Thick Market/Thin Market
A thick market has many participants trading high volumes, ensuring robust information aggregation; a thin market has few participants and low volumes, risking inaccurate predictions.