Coins vs Tokens: Understanding the Difference with TON
🪙 as an Example
If we keep it simple:🔘Coin (Toncoin) – A native blockchain asset, fully autonomous and independent.
🔘 Token (Jetton) – A digital asset built on an existing blockchain, similar to renting infrastructure.
🔘 Examples of jettons in the TON network: NOT, DOGS, PX, BUILD, WOOF, MAJOR, and others. These tokens use Toncoin as the foundation but function as separate digital assets with different purposes and utilities.
Now, let’s break down the main token categories using examples from TON:Platform Tokens:
⚫️ These tokens support decentralized applications (dApps). A good example in the TON ecosystem is deDust, a decentralized exchange (DEX). deDust utilizes tokens in the TON network for swaps and other operations.
Security Tokens:
⚫️ These tokens are a digital representation of real-world assets. For example, if someone creates a token backed by shares in a business or real estate, that would be a security token. In TON, such projects are still emerging, but the principle remains the same: security tokens must be backed by real value.
Transactional Tokens:
⚫️ These tokens are designed for fast and low-cost payments. In the TON network, Toncoin itself serves this purpose. It is used for transaction fees, transfers, and staking.
Utility Tokens:
⚫️ These tokens serve specific functions within a platform or service. For instance, if a token were introduced exclusively for Telegram Premium subscriptions, it would be a utility token. It has a defined use case and does not function as an independent currency.
Governance Tokens:
⚫️ Think of these as voting power in the crypto world. Holders of governance tokens can participate in a project's decision-making: voting on upgrades, directing development, and deciding resource allocation. Imagine holding tokens for a DeFi project in TON that lets you influence which new features get added or how profits are distributed. More tokens mean a stronger vote.
Sometimes, token categories overlap—one token can serve multiple functions. For example, JUP on Solana is used both in DAOs and as a platform token.
Now you know the difference between coins and tokens! The key is understanding what you’re buying and why! 😊
Credit: NightCompany🤫
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