Steemit Crypto Academy Season 3 Week 8 - Beginner's Course | Understanding Tokens by @ladyofpolicy

[Image source](https://blog.bitnovo.com/en/what-is-a-token/

Hello everyone in cryptoacademy and special regards to professor @reminiscence01 for such wonderful teachings this week at least my knowledge about token has been expanded.

Having gone through this week's lectures and with the little knowledge I grabbed from the topic I will proceed and answer the questions that follows.

Question no. 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)

What is Token?

In a lay man's understanding,token simply means an object that represents something which means that token is not the main subject here but rather it's a representative of something.

Now,coming to the cryptocurrency world,
Tokens are simply unique virtual currency that are created in an already existing blockchain, which means that they don't have their own blockchain.

Since cryptocurrency is a digital currency,tokens is what represents the asset an investor staked for a certain purpose in a blockchain.

Tokens usually function a fund raising medium for crowd sales through the process of Initial Coin Offering (ICO) for the purpose of funding the development of project. Also,tokens can be used for investment purposes,trading,purchasing and storing of value in the blockchain.

• Examples of tokens and the blockchain they are built on

Examples of Token	Blockchain they are built on
• Uniswap	Etherum blockchain

• Klever	Tron
•Everipedia	EOS
• Bancor (BNT)	Etherum blockchain
• Tether	Etherum blockchain
• Wink	Tron
• TWT	Binance chain
• BTT	Tron
• Pancakeswap	Binance Chain

Question no. 2

What is the difference between a token and a coin?

There are many differences which exist between a token and a coin and below are the few ones I can mention.

Token	Coin
• A token does not have it's own blockchain,it is built on an already existing blockchain.	Coin can exist on its own because it has its own blockchain and it serves as a native currency of that particular blockchain.
• Tokens can easily be created,it doesn't require too many programming work.	Coins are hard to create because it requires too many planning and programming by different experts.
• Tokens cannot be used for the transfer of coins in the blockchain.	Coins can be used in transferring tokens in the blockchain.
• Tokens are distributed through the initial coin offerings.	Coins are gotten or issued through mining.
• Tokens are totally dependent on the blockchain	Coins are independent of the blockchain.

Question no. 3

Explain the different categories token listed below and explain its features.
•Utility tokens
•Security tokens
•Equity tokens
•Non-fungible token (NFT)

• UTILITY TOKENS

Utility token is a type of token which is still under development. It has the ability to give it's holder access to a particular product or service which a company has to offer to it's users but in the future. It is created by users in a blockchain with the mindset of developing a project on that particular blockchain.
This means that utility tokens are not produced for the purpose of investment but rather for granting access.
An example of this kind of token is Filecoin.

• FEATURES OF UTILITY TOKENS.

• It is futuristic.
• Built mainly for access granting.
• Not meant for investment

• SECURITY TOKENS

This type of token are regarded as digital transformation of traditional assets in a blockchain. This type of token also connects the digital tokens and traditional assets together.
It can be issued on a blockchain as an external assert.Just like traditional stocks and share, holders of security tokens are entitled to receive profits from the projects on the blockchain and they also have ownership rights. The value of security tokens originates from a tradable external asset.

• FEATURES OF SECURITY TOKEN.

• Easy to trade on.
• It is less volatile.
• It can easily be regulated.
• The smart contracts are affordable.

• EQUITY TOKENS

Equity tokens shares similarity with security tokens because they behaves like the traditional stock assets.
Equity tokens refers to digital tokens created in the blockchain and issued to the users to represent an equity share in a firm. Holders of equity tokens have both ownership right and at the same time they are entitled to receive points from the project.
Most times, a third party property, asset, or venture is represented by an equity token.

FEATURES OF EQUITY TOKENS.

• Holders has ownership rights.
• There are no intermediaries .
• To an extent,it is programmable.

• NON-FUNGIBLE TOKENS(NFT)

Non-fungible tokens are unique goods and services that represented digitally on a blockchain.
These unique items can not be interchanged with others because each unique item has its own value.
NFTs unique goods and services can either be photos, artworks, games etc. Holders have proof of ownership and they also have ownership rights.

FEATURES OF NFTs.

• They are unique in their own special way.
• They cannot be divided or neither can it be broken into bits.
• They are scarce which is why their value keeps on going high.
• Holders of NFTs has ownership rights.
• There is no secret in NFTs which means that it's very transparent.

• Question no. 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).

For the sake of this homework,I will talk about "Pancakeswap"

Image source

• About Pancakeswap.

Pancakeswap is a type of DApp and also a decentralized exchange (DEX) which gives it's users opportunity to trade different crypto coins and tokens without the interference of a third party or an intermediary. It is totally decentralized and because of that it is not under the control of any central body or any government policies. It is built on the Binance Smart Chain (BSC) and It's token is called CAKE

• AIM

DEX are built on different smart contracts blockchain so they they rival each other with different twists, upgrade and development. Rather than Ethereum, pancakeswap is built upon Binance Smartcoin and and as a result of this, the trading fee rate is very minimal. Although Ethereum has gained more ground than BSC but Pancake is really making wave already in the Crypto space and among other DEX.

PancakeSwap makes it's transaction fees smaller,and its service is fast as well and at it
offers many more promising features with the aim of becoming major over DEXs that are Etherum based.

• FEATURES AND USE CASES.

• FARMING

This is a very unique feature which is offered by Pancakeswap.
Just as the name implies,you can decide to put your cake into liquidity pools which is just like planting a seed,then enable traders to borrow your cake and just sit and watch as your rewards comes in to you. Also you can decide to haven't your reward or not its all upto you.

• STAKING

This is a feature that is known offers by many protocols today.
Just as the name implies,in pancakeswap,you can decide to stake your cake in order to earn rewards and you can also decide to take your reward from the pool at your desired time.

• LOTTERY

With your Cake, you can access a lottery on PancakeSwap. It takes hours for every lottery session which offers you a four digit combination at random. This feature imitates the real life lottery where your ticket needs to tally with the four digit combination which is given. Also rewards are earned if at least 2 given digits appear.

Screenshot from coinmarketcap
The Pancakeswap CAKE is positioned as the 30th crypto token in the crypto ranking with a market cap of $5,075,478,232 and a circulating supply of 211,658,090,Cakes. It's Market price at the time of writing is $23.98