A crypto token is a unit of value that operates on an existing blockchain, often representing assets or interests like access to services, ownership of digital art, or company shares. Tokens are also used to raise project funds through Initial Coin Offerings (ICOs).
Tokens can be programmed with unique features that broaden their applications. For instance, Non-Fungible Tokens (NFTs) are individually distinct and cannot be exchanged with other tokens. Security tokens function similarly to traditional securities like stocks and bonds, enabling the sale of company shares or other enterprises without intermediaries.
Common token standards include ERC-20 and ERC-721. ERC-20 tokens are interoperable within Ethereum’s ecosystem of decentralized applications, while ERC-721 tokens are specifically designed to be non-fungible.
Token supply is the total number of tokens a project has at its inception and is a key metric in determining a crypto’s market capitalization and economic size. Different types of token supplies include Initial Token Supply, Current Token Supply, Total Token Supply, Maximum Token Supply, Unlimited Supply, and Minted Tokens. These concepts are fundamental to understanding the token economy.
