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
Liquid Staking
A staking mechanism on Ethereum where users receive derivative tokens representing their staked ETH, allowing them to use these tokens in DeFi activities while earning staking rewards.
Gas Cost Complexity
The variable and cumulative transaction fees on blockchains that complicate liquidity provision and trading in DeFi.
Gnosis Safe
A multi-signature smart contract wallet on Ethereum for secure, shared management of digital assets with customizable approval thresholds and recovery options.
Bitcoin (BTC)
The first and most valuable decentralized digital currency, created by Satoshi Nakamoto in 2009.
Isolated Margin
Margin allocated to a single position, limiting risk to that position alone.
Capital Inefficiency
The underutilization of provided liquidity in DeFi protocols, where most capital remains idle across unused price ranges.