Crypto Academy / Season 3 / Week 8- Homework Post for [@reminiscence01] Beginner's Course / Understanding Tokens by @obikay
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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)
Tokens can be defined as digital assets running on existing blockchain this simply means tokens are generated on platforms that are already in existence and they allow new cryptocurrency to be created and also acquire their prices as well.
When a new project idea wants to be launched into the crypto market, It can be done in two ways, which is the creation of a new blockchain (from the scratch) or the creation of a project that will run on a Blockchain that already exist.
It's more easier creating a token because it doesn't take the building of a blockchain from the start unlike the coin. Creating a token can be done by anybody making use of an established platform just like the Ethereum Network. This simply means it does not need altering the code in a protocol.
Presently, there are different blockchains to follow the needed standards in creating a new token.
It can be achieved with the smart contract technology, where programs on a Blockchain network are stored.
There exist many tokens which are already developed on platforms already existing.
| TOKENS | BLOCKCHAIN |
|---|---|
| Uniswap | Ethereum |
| BitTorrent | Tron |
| Thorchain | Binance chain |
| KARMA | EOS |
| WINKLink | Tron |
| FTXtoken | Binance chain |
| Aave Protocol | Ethereum |
| Everipedia | EOS |
What is the difference between a token and a coin
Sometimes, people misinterprete these two terms token and coins, meanwhile they actually have different meanings.
Tho, there are both known as cryptocurrencies. This two names often confuse people who new to the cryptoworld. Some get confused as to wanting to buy coins meanwhile they are buying token.
- The major dissimilarity with token and coin is this, coins been native to their blockchain but tokens been created Blockchain already existing. e.g Ethereum.
- Coins can serve as money, while tokens have order of uses depending on the project platform.
- Coins are used to purchase tokens, meanwhile tokens cant purchase coins.
- it's more easier creating a token than coin. Some complex mathematical issues needs to be solved via a way called mining, during creation of coin.
Explain the different categories token listed below and explain its features
Utility tokens:
Utility tokens stands as the right to use or give digital access to an application, services, products and are not designed as traditional currencies. Utility tokens gives the holders access over the future utility of a company, it might be a service or a product.
Security tokens:
security token a special token provided on a blockchain (permissioned/ permissionless) which represents a stake in foreign asset. A business organization can provide security token that can serve as bonds, stocks and some others
Equity tokens:
Equity token are tokens generally for claiming or showing ownership over an asset. It is almost the same as the traditional way, but these tokens posses some kind of documents in virtual form e.g digital certificate. Equity tokens can be in forms like stock, options contracts, Tokonized real estate, Tokonized companies.
Non-fungible token (NFT):
The Non-fungible tokens are tokens that portray special, collectible piece. They are special in a way that they cant be splitted or entirely changed for some other non-fungible tokens of the same. Let's say they are tokens that have no fungibility offering a various of special chances making use of blockchain technology. One of the known non fungible tokens is crypto kitties. They are unique and no two of it are the same.
Features of a Token
- Tokens can be acquired, one can trade them (buy and sell)
- Tokens are transparent.
- Tokens are Decentralized, this simply means is not been controlled.
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)
source
Aave a decentralized finance market platform which is based on the Ethereum blockchain that allows the lending and borrowing of different types of crypto assets to its users.
Aave was launched in the year 2017 by Stani Kulechov, it was at first created as ETHLend, with the native coin been LEND, with the initial coin offering $16.2 million was raised. The developer's idea was creating a market place that links the borrower and the lender. Therefore in 2020 it was relaunched with a new project name Aave.
AAVE Token
The AAVE token plays a major role to govern the Aave platform, permitting it's users voting on changes in relation to its policies.
| AAVE | Data |
|---|---|
| Price | $417.62 |
| 24/hr trading volume | $673,538,771 |
| Market Ranking | #27 |
| Marketcap | $5,408,167,559 |
| Circulating Supply | 12,949,961 |
| Max supply | 16,000,000 |
| Total supply | 16,000,000 |
source
It can be purchased from Exchanges like CoinTiger, Binance, OKEx
Features:
- it grants people access to lend and borrow from about 20 different cryptocurrencies of their choice.
- people who borrowed from the platform can rotate among variable and also fixed interest rates.
How Does Aave Work?
Aave ease loans in different cryptocurrencies, nevertheless as stated by the pool system, it's borrowers must make a deposit of collateral that is much more higher than what they borrowed. For instance, obtaining a $20 Ether loan, there must be a deposit of another cryptocurrency worth more than $20. There is an algorithm that spontaneously liquidates the borrower's collateral to know if the value has reduced from a particular rate. There are verified third party auditors managing the loan on the network by a smart contract.
Aim of Aave
AAVE aim is creating an algorithmic loan market place where people can achieve two purposes:
Investing of money in pools which tends to create liquidity. Which let's them to grant loans to other users, and get interest in form of liquidity providers.
Creating a market platform which can provide loans in different collaterals, and operating policies. Therefore adjusting to meet the needs of users and various markets.
For Beginner's who have plans of investing or becoming a crypto trader.
The need of knowing the difference between these two terms (tokens and coins) is very important and necessary. As to not decide wrongly which might result to big loss.
Thank you professor @reminiscence01 for the lecture
Hello @obikay, 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:
Recommendation / Feedback:
You have produced an amazing content on Tokens. Thank you for participating in this homework task.
Thank you professor
Steemit Crypto Academy is very good work where we can easily learn a lot of new things and you have done a good job with your homework which is very specific and clear answer. thank you very much for participating and hope you will get good support.