Tokens are digital units that represent assets or rights within a blockchain network, and are used for various purposes such as trading, decentralized finance (DeFi), digital gaming, and digital ownership. Tokens differ from cryptocurrencies like Bitcoin (BTC) in that they are often built on existing blockchain networks like Ethereum, using standards such as ERC-20 or ERC-721 (for non-fungible tokens - NFT).
Some of the prominent types of tokens include:
1. Governance tokens: Allow holders to vote on decisions within projects (like the UNI token from Uniswap).
2. Utility tokens: Used to access specific services within the platform (like LINK in Chainlink).
3. Asset-backed tokens: Represent real assets such as gold or traditional currencies (like USDT or USDC).
Tokens play a central role in the cryptocurrency ecosystem, representing tools for investment, financing, and innovation within digital markets.
#DeFiTokens
