Crypto Academy Season 3 Week 8 - Beginner's Course | Understanding Tokens/ Teacher: @reminiscence01/Student: @ franklin.tsosa/20-08-2021
1)What do you understand by Token and give an example of at least 5 tokens and identify the blockchain it is built on. ( give at least 3 different Blockchains).
2)What is the difference between a token and a coin?
3)Explain the different categories token listed below and explain its features[
Utility tokens
Security tokens
Equity tokens
Non-fungible token (NFT)
- 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).
- 1)What do you understand by Token and give an example of at least 5 tokens and identify the blockchain it is built on. ( give at least 3 different Blockchains).
It can be understood as defined by different authors that a token represents a unit of value that is created according to the business model. They already relate this terminology in the world of cryptocurrencies, the token represents the crypto which is created in a chain of blocks which has a native unit.
In this digital age, issuing a cryptocurrency represents an ability to go beyond the banks, which are placed in the market through blockchain technology. The biggest example related to the subject is Bitcoin, which is a token that has an accepted value in a community that is based on the blockchain. A token is more than a currency since it can be given more uses as an asset that represents a value in the world market.
Cristina Carrascosa is an expert in the commercial area and defines it as what it will serve for what the person or organization that designs and develops it decides. The 'tokens' admit several layers of value inside them, so it is whoever designs it who decides what a specific 'token' has inside.
Examples of tokens and their respective blockchains:
Tether - Ethereum Blockchain: (Tether is one of the most popular stablecoins (stablecoins) with the largest market capitalization that exist today). It also operates for other blockchains such as: Tether Omni (Bitcoin), Tether Liquid, Tether TRC20 (Tron), Tether in EOS, Tether in Algorand, thanks to its consolidation and strategic spaces.
Uniswap -Ethereum Blockchain: One of the most famous decentralized exchange (DEX) protocols operating on the Ethereum blockchain called Uniswap. Uniswap is much more than a DEX, in fact this protocol provides many other additional functions for users of DeFi on Ethereum. It even recently launched its governance token called UNI with which it seeks to boost growth and interest in the platform.
Wink - Tron: WINk's native token called WIN is based on the TRC-20 protocol of the TRON network. WINk runs a reward scheme known as WinDrop, which rewards users who hold the WIN token.
TWT - Binance Chain: with the symbol $ TWT it is a utility token that can only be used within the application. This will be used to incentivize all users in the Trust Wallet community. Its mission is to provide everyone with access to cryptocurrencies and educate through the ownership of their first cryptocurrency. What are your use cases? The main one is to be a governance token, which will be used by anyone who wants to participate in decision making to add new support functions, tokens and blockchain products.
Everipedia - EOS: the world's first encyclopedia to use blockchain, born in 2014 as a decentralized alternative, more modern and inclusive than Wikipedia, since on this platform content creators obtain rewards based on their knowledge and contributions through the token IQ, based on the EOS blockchain, which also offers various benefits within the platform.
- 2)What is the difference between a token and a coin?
The fundamental difference between the two is that while the currency is issued by a national or provincial authority and is compulsory, the token lacks legal tender and only has the guarantee of the particular issuer or establishment that uses it.
In the virtual world of tokens and cryptocurrencies, when we delve into it, we find that they are forms that have many similarities since both are marketed through the network through blockchain technology but it should be noted that there are notable differences.
Recall that a token is based on an already existing blockchain on the network, while a cryptocurrency has its own blockchain format serving as a native crypto, for example: TWT that operates on its own Binance Chain blockchain.
Translating these words to the understanding of the general public, a cryptocurrency has its own blockchain and obtains its value as a result of people's investment in that crypto, while a token can be integrated into the blockchain of any crypto on the that does not have a control. so many small tokens may not have the financial means to function and establish themselves in the world market.
In summary, tokens cannot be used to transfer coins in the blockchain, while the case of a coin can be given a more open use, being able to transfer tokens. A clear example of this that many of us know is that of tron which can be used to transfer winks in the blockchain.
- 3)Explain the different categories token listed below and explain its features[
- Utility tokens: A utility token is created in a blockchain to develop a project as it develops. This translates as the expectation of use in an ecosystem, providing a means to encourage user participation and also allow for transparency in the operation. They are generally used to raise funds to promote a project by issuing coins through ICOs.
Among its most relevant functions is that users can participate in the project thus obtaining votes for decision-making in addition to being the most popular type of tokens.
- Security tokens: They are the most traditional assets present in a blockchain which are backed by a traded asset.
This type of tokens often represents the capital and participation in the profits of an organization or entity which are governed by security protocols, being more strict to be able to offer this type of token.
Security tokens are translated into having participation in a company where a chain of blocks operates and the holders are entitled to the profits of the project.
Among its functions we can name that the transparency they provide is the most transparent and the holders have property rights, in addition they are not mutable and are financial investments such as buying shares in a company.
Equity tokens: The so-called capital tokens are tokens that represent the ownership of an asset, such as the shares of a company. They share certain similarities with security tokens and are also known as user tokens giving the individual access to future services or products.
Holders of this token receive benefits from the project and also acquire voting rights and participate in decision-making.
In their functions we can name that they are executed as actions representing a certain percentage of a company and their value strongly depends on the success or failure of the project.
- Non-fungible token (NFT): It is the most active trend in the cryptographic world today. They are known as NFTs which are publicly authenticated in blockchain technology that serves as a signature to certify who owns it. It is not fungible which means that it is unique and has no similar replacement making it totally unique.
Some NFTs can be physical, that is, they can be touched, it is tangible like a painting or a card, while others are digital as is the case with video clips or tweets and the boom of today where many of the young people today make life that are network video games.
Some of its characteristics are that they are unique and cannot be exchanged and also that they can be traced on the blockchain.
- 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).
Uniswap started in the mind of Vitalik Buterin in a work posted on the Ethereum Research forum. Under the name of "Improving front running resistance of x * y = k market makers", Buterin showed how Ethereum and its smart contracts could be used to build advanced financial systems for market makers. This thread created a huge discussion about the possibilities, among which one answer stands out, that of Hayden Adams. Adams was a young developer in the Ethereum community, who was working on a market maker implementation like the one shown by Buterin.
Uniswap is also open source, which means that anyone can run their own decentralized exchanges by copying the codes.
Uni token allows holders to participate in the governance of the platform and also in decision-making through a governance vote. Its automated protocol has solved the problem of liquidity, buyers and sellers do not have to wait for an opposing party as long as there is sufficient liquidity in the group. In Uniswap distribution, 60% goes to Uniswap users, 21.5% to team members, 17.8% to investors, and 0.65% to advisors.
It is a type of standard token within Ethereum and of these types of tokens there is a great variety. In fact, there are currently more than 420,000 different ERC-20 tokens on Ethereum, which gives us an idea of the huge ecosystem that exists. Precisely this point, which led Uniswap to its immense success: there is an immense community that needs this exchange functionality and, if you can make money with it, all the better.
Thanks to this, something exceptional is achieved: allowing Uniswap to carry out exchanges that can then be transferred to other cryptocurrencies. And, although the exchange is not direct, this offers a unique range of opportunities, which not only Uniswap has taken advantage of. In fact, it is thanks to things like these that the DeFi or Decentralized Finance ecosystem has not stopped growing from 2019 to the present day.
First of all, we have that Uniswap was created as an AMM protocol (Automated Market Maker or Automated Market Maker). This means that Uniswap is able to allow its users to create markets from which third parties can benefit.
Second, the creation of these pools allows the protocol to amass liquidity to allow rapid exchange of assets. This exchange system is controlled by smart contracts (like the rest of the Uniswap protocol functions), giving rise to its DEX functionalities. And finally, building around these two functions a complex system of rewards, decentralized governance and complementary functions within the increasingly relevant DeFi ecosystem.
Their objective is to address liquidity challenges by incentivizing liquidity, in addition to promoting community growth by offering users a fully decentralized platform. All this eliminating the risk of losing your assets if the exchange is hacked.
In the following image we can see according to the exchange coingecko.com, that as of August 21, 2021 it has a market value of US $ 28.70, with a market capitalization of US $ 14,903,560,161 with the amount circulating of 519,857,388 and its position in the crypto ranking is number 11.
In the following image we can see according to the exchange coingecko.com, that as of August 21, 2021 it has a market value of US $ 28.70, with a market capitalization of US $ 14,903,560,161 with the amount circulating of 519,857,388 and its position in the crypto ranking is number 11.
Without a doubt, it can be concluded that it has been a journey to inquire, investigate, cite and read this content, which I have managed to assimilate through the development of each of the questions requested by the teacher @reminiscence01, whom I congratulate for the content that I provide. of great quality. I hope to comply with the assignment, and to the last week of the academy without more than attacking the work of all of you who make the academy possible. THANK YOU EVERYONE FOR BEING HERE.
Hello @franklin.tsosa , I’m glad you participated in the 8th week of the Beginner’s class at the Steemit Crypto Academy. Your grades in this task are as follows:
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