Crypto Academy Home Work Post Season 3 Week 8: Understanding Tokens
Hello professor! I am so glad to participate in this week crypto academy, this is my presentation
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About Tokens
Tokens can be termed as digital assets that are defined by a smart contract or project and belong to a blockchain address. People who have a private key to that address can only access the respective tokens, and these people are termed the owner or custodian of the token.
Tokens are merely assets or access rights and are also a key part of how the blockchain technology works and it also has much wider functionality. Even though it can not be a form of cryptocurrency that is backed by real-world assets known as stablecoin tokens.
Tokens always derive their value based on how useful they are and are usually built on the Ethereum blockchain since it offers many functionality terms and features, and they do not use them to reward miners.
Below are examples of tokens and their respective blockchains they are built on.
| Token | Blockchain |
|---|---|
| THORChain | Binance chain |
| Tether | Ethereum |
| Flamingo | Neo |
| TROY | Binance chain |
| WHALE | Ethereum |
| Wirex | Token |
| Stellar | Phoenix |
| Global | Neo |
| ZIMBOCASH | Tron |
| KARMA | EOS |
| JUST | Tron |
2)What is the difference between a token and a coin?
The difference between token and coin is as follows
| Token | Coin |
|---|---|
| Tokens do not have a blockchain network of their own. Thus, they are built on existing blockchain networks. | Coins have an independent blockchain network of their own. |
| Tokens are suitable for multiple needs. | Coins are used for processing payments. |
| Tokens do not require the solving of complex mathematical puzzles when creating tokens | Coins require the solving of complex mathematical puzzles when creating a coin. |
3)Explain the different categories token listed below and explain its features.
Utility tokens
Security tokens
Equity tokens
Non-fungible token (NFT)
Utility tokens
This can be termed as a token which is given out during crowd dales when a project executes an Initial Coin Offering (ICO). Utility tokens improve user experience by a way of giving rewards for particular things and also act as currency on the blockchain. Utility token owners enjoy the right to own a product and the right to vote in certain cases.
Though utility tokens do have value, they can not be termed as money as straightforward as a coin. The tokens are basically used to raise interest in products and for application in the blockchain ecosystems. Utility tokens do not grant ownership stakes or assets to their holders.
Security tokens
This can be termed as a device, either physical or digital, that enables two-factor authorization for a user to prove his/her identity in the login process. Before one is able to access a system, he/she must have a security token and data must flow between the user and the system to enable access and identities. Also, there is a need for users to secure their passwords from memory.
Equity tokens
This is a subcategory of the security token that is entitled to ownership rights. Equity tokens grant holders an ownership stake and it also enables more security and stability. Holders of equity tokens have part of ownership in their investments. Thus, each token they have represents a portion or percentage of their actual property and is recorded on a blockchain.
Before a person can issue an equity token, there are certain procedures he/she should follow. These are;
• Register on an exchange platform
• Declare commercial provisions
• Perform a pre-ETO
• Public offers
Examples of companies that manage their equity tokens by carrying out ETO are BF Token and Neufund.
Non-fungible token (NFT)
This is a unit of data that is stored on a blockchain. It is a cryptographic asset that is unique and unrepeatable and can not be copied, substituted, or subdivided.
NFT can be described as unique, transferable, capable of proving its scarcity, and indivisible. It also has a digital nature which makes no room for NFTs to be exchanged for one another. These tokens are typically held on the Ethereum blockchain.
Features
• Tokens have no central office from which they accept cash tokens. So, therefore, it saves as a decentralized.
• They can be transacted. Thus, one can buy and sell tokens.
•Tokens serve a multi-purpose. Thus, for investment and for trading.
4)Make your own research and write extensively on any token you listed in question one. (Must include features of the token, the aim of the project, Use cases).
Wirex Token
The Wirex Token is a stellar-based token which is used within the Wirex application and it is the first native cryptocurrency on the Wirex platform. It can also be found on other cryptocurrency platforms. This token is a unique cryptocurrency that powers the X-tras reward program and it is a multi-blochchain that is built on the Stellar Network and Ethereum blockchain to enable its maximum speed, efficiency, and flexibility. Wirex Tokens customers may earn up to 4% interest each time they use their cards, or even up to 12% yearly on their Wirex account balance. But one needs to have a verified account before he/she can purchase a Wirex Token. WXT can also be purchased on KuCoin, OKEx, and Houbi exchanges.
In June 2019, the Wirex Token exclusive had a pre-sale in just 15 minutes. In July 2019, the Initial Exchange Offering introduced its token (Wirex Token) to the world. In March 2021, they launched the X-tras, a futuristic reward programme which pays out in WXT, and in June, 2021, the last two months, 20% of the WXT was migrated to the Ethereum blockchain, which unlocked the DeFi world for Wirex customers.
screenshot from coinmarketcap
As shown in the screenshot above, the Wirex Token has
| Rank | #519 |
|---|---|
| Wirex Token Price | $0.0112 |
| MarketCap | $51,528,285 |
| Fully Diluted MarketCap | $111,576,261 |
| Circulating Supply | 4.60B WXT |
| 24/hr trading volume | 34,572,776 |
| Max Supply | 10,000,000,000 |
| Total Supply | 10,000,000,000. |
Features of Wirex token
It provides customers with access to the DeFi ecosystem.
• It also enables customers to unlock exclusive crypto rewards.
• It is a multi-blockchain cryptocurrency that is built on the Stellar Network and Ethereum blockchains to enable its maximum speed, efficiency, and flexibility.
The Aims of Wirex Token
The aim of Wirex Token is to enable users to transact crypto assets as easily as traditional currency exchanges, and they try to achieve this by allowing users to deposit crypto assets through smart contracts so that their traders can have access to them.
Conclusion
I would like to thank Professor @reminiscence01 for clearing our minds about the difference between tokens and coins in the lecture notes, and I am still ready to learn more from all the professors.
Thank you again Prof @reminiscence01.