🔹 What is a Token in Crypto? Simple Explanation

In the world of blockchain, a token is a key element. Unlike a native cryptocurrency (like BTC on Bitcoin or ETH on Ethereum), a token is a digital asset created on an existing blockchain.

✅ Types of Tokens

Utility Token

They provide access to a specific product or service. Examples: BNB (fee discounts on Binance), MATIC (used on the Polygon network).

Security Token

Represent traditional assets (stocks, bonds) in digital form. Regulated by financial authorities.

Governance Token

Allow voting on the decisions of a decentralized project. Example: UNI for Uniswap.

Stablecoin

A token pegged to a stable currency (e.g., USDT, USDC) to avoid volatility.

NFT (Non-Fungible Token)

A unique, non-interchangeable token, often used for digital artworks, game items, or tickets.

🔁 What are Tokens used for?

Participating in an ecosystem (payments, rewards, access to features)

Governing a community project (DAO)

Representing assets (financial or digital)

Exchanging value quickly, transparently, and without intermediaries

🎯 In summary: A token is a versatile tool at the heart of the Web3 economy. It can represent value, rights, or assets. Understanding tokens is understanding the foundation of today’s and tomorrow’s blockchain projects.