Crypto Academy Season 3 Week 8 - Beginner's Course | Understanding Tokens | By @nackasnelson

Greeting steemians
It's a please to continue with this great course which talks about the understanding of tokens which was taught by prof @reminiscence01 which was well understood and I pray it shows on my work.

Tokens can be defined as digital assets that require an already existing platform such as ethereum in other to operate and exist.

A token is a quantified unit of value and also tokens are generic and fungible. Generic meaning can be used to define any form of value while fungible implying it is exchangeable between specific forms of value.

Traditional monetary currencies are not fully fungible as they are many circumstances where one can't exchange monetary currency for other forms of value
For E.g likes on social media may have a certain value but typically can't be exchanged directly for its monetary currencies. A token differs from the traditional monetary currency in that it is more generic. Tokens are used to account for values such as natural capital. Tokens are digital and programmable enabling one to specify certain rules for that token and have the rule executed once exchanged thus enabling the possibilities in its usage. Tokens shift our value model from a single to a multiple value model but still holds the possibilities of exchange between them.

With ease in creating new tokens because they are being built on already existing blockchains making it lease costly and can be done by anyone who can make use of an Exthereum or Neo network. Different

As of today, coinmarketcap.com has listed 100 new tokens. Already are many tokens existing on platforms existing

• Utility tokens

     Utility tokens are uploaded into a protocol of an already existing blockchain to access the protocol services, products, and applications. These tokens give its holders access to the company utilities such as its products or services. These tokens can be used to pay for some services within their specific ecosystems.
  

• Security tokens

      Security tokens are created for investments and may sometimes represent property interest. Holders of security, tokens receive profits and possess ownership right to the blockchain. Security tokens represent the stake in foreign assets and to an organization, they can serve as a bond or stock. These tokens act as a medium of connection between traditional and digital assets. 
  

• Equity tokens

      Equity tokens and security tokens share similar policies where they show owner over an asset. It's almost like the traditional asset meaning its holders have some form of ownership in their investments.
  

• Non-fungible token(NFT)

      None-fungible tokens are unique digital representations. Each of the NFT represents a specific asset so has no standard value. None fungible tokens are special for ownership rights, authentication, and identification.
  

Features of a Token

1. Tokens are decentralized means there's no middle man
2. Token are transparent as transaction details are displayed.
3. Tokens are tradeable can be bought and sold
4. Tokens store value

image source

Aave is a decentralized market platform that is built on the Ethereum blockchain which enables its, users, to earn on deposit also allowing them to lend and borrow other types of crypto assets to the users.
In year 2017, Aave was launched by Stani Kulechov in Switzerland it beginning as ETH with its native name LEND raising an initial coin offering of $16.2 million. Later it was rebranded to Aave when it was switched to a liquidity pool model with the developers launching the Aave protocol in 2020 the developer's idea was to create a platform where its users could borrow and lend assets.

Aave Token

This token plays a great part in the governance of the Aave platform giving its users the right to vote on its policies.

At the time of the screenshot, the token had a price of $409.89, and it ranks 28 with a market cap of $5,286,069,276 and a volume of $379,143,900 and a circulating capital of 12,962362.55Aave, and a total supply value of 16,000,000.

This token can be purchase on exchanges like Binance, OKEx

Features of the Aave token

• It's a decentralized lending system that allows users to deposit and borrow as well as earn crypto assets.

• Aave participants receive fixed and variable interest rates.

How Does Aave Work

Aave is a lending pool system whereby users deposit the funds they want to lend which are then collected in the pool, with the borrower having to deposit something higher than what is to be lent to him. The fund is then requested as a flash loan. That is before borrowing a $50 loan a deposit higher than $50 has to be made as collateral to the system. As the transaction gets to complete a fee of 0.09% is being added to the flash loan as it returns.

Aim of Aave

Aave aims at creating an algorithmic loan market in where users can do 2 things

1. Creating liquidity by investing money in pools that will offer loans to others users thereby receiving interest as a liquidity provider.

2. Aave aims at creating a platform being able to offer loans with a variety of collateral and operating on policies to meet up with its users' needs.

The importance of know the difference between tokens and coins for crypto investors is very important for a successful investment.
Am taking this opportunity to thank prof @reminiscence01 for the wonderful and clearness in the lectures