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

Still in the Season 3 of Steemit Crypto Academy, its the 8th week with amazing lectures. Here's my entry to the homework task of Prof. @reminiscence01 on the lecture 'Understanding Tokens '.

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)

TOKENS

Tokens in the Crypto world are unique virtual currency which are created in an existing blockchain, they don't have their own blockchain.

Tokens represents an asset or an investor's stake for a particular purpose in their blockchain.

Tokens are created for the development of a cryptocurrency project, and they are also used for investment purposes, for trading, for purchasing and storing of value.

Tokens are been spread through the process of initial coin offering (ICOs)

Types of Tokens

1. Reward token
2. Utility tokens
3. Non-fungible token (NFT)
4. Equity tokens
5. Security tokens
   These types of tokens will be discussed in question number three.

Examples of some tokens and the blockchain they are built on

TOKENS	THE BLOCKCHAIN THEY ARE BUILT ON
1. Bancor (BNT)	Ethereum blockchain
2. FTX Token	Binance Chain
3. Klever	Tron
4. Everipedia	EOS
5. Basic Attention Token (BAT)	Ethereum blockchain
6. Tether	Ethereum blockchain
7. Uniswap	Ethereum blockchain

2)What is the difference between a token and a coin?

Difference between token and coin

TOKEN	COIN
1. Tokens don't have their own blockchain, they are built on an existing blockchain. An example is the Tether token built on Ethereum blockchain	1. Coins exist on their own blockchain, they are the native coin of a blockchain. An example is the Bitcoin on the Bitcoin blockchain.
2. Tokens are very easy to create.	2. Coins are very difficult to create as it takes only individuals with programming experience to be able to do so.
3. Tokens are been spread through the process of initial coin offering (ICOs)	3. Coins become known through mining.

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 created by users in a blockchain with the hope of developing a project on the blockchain. The creation of the utility token helps them to access specific services and products on the blockchain, and by so doing

For instance, a user can deposit Bitcoin for a smart contract to be performed on the Bitcoin blockchain.

SECURITY TOKENS

Security tokens are regarded to as digital transformation of traditional assets in a blockchain.

Security token connects digital tokens and the traditional assets.
Just like traditional stocks and share, holders of security tokens are entitled to receives profits from the projects on the blockchain and they also have ownership rights.

EQUITY TOKENS

Equity tokens share the almost the same policy with security tokens.
Just like the security token, the equity tokens are like traditional assets. They are created to play the role of a share in the digital world. Holders of equity token have ownership rights and are entitled to receive profits from the project.

NON-FUNGIBLE TOKEN (NFT)

Non-fungible tokens are unique items (it could be goods and services such as photos, videos, audios etc.) which are represented digitally on a blockchain. These unique items can not be interchange with others because each unique item has its own value.
Holders of NFT have ownership rights.

Features of a Token

• Tokens are used for investment purposes as well as for trading purposes.
• Tokens are non-governmental and therefore decentralized.
• It is used to store value.

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).

I'll be writing on Uniswap token

Source

Uniswap (UNI)

The Uniswap platform is a decentralized system built on Ethereum blockchain. UNI is the native token of the platform. UNI function through Ethereum since its an ERC-20 token.

It was created in 2018. The Ethereum developer Hayden Adams created the Uniawap platform. The Uniswap was at first known as Unipeg.

Uniswap has gained popularity due to the role it plays in automated token trading. This automated protocol also solve the issues of liquidity.

Uniswap took forward step in September 2020 in the aspect of creating and awarding its own token (UNI). This attracted many users to tje platform.

The total supply of the UNI token is 1 billion which was mint at genesis. And the Uniswap token is presently distributed as follows;

• 60% to Uniswap goes to users
• 21.51% goes to team members
• 17.8% goes to investors
• 0.69% goes to advisors.

Uniswap’s token is available on major exchanges such as Bianance, Coinbase Pro etc. for trading (buying and selling).

The Exchange contract and the Factory contract are the two smart contract Uniswap operate on. The exchange smart contract is used for swapping of token while the factory smart contract is used in the platform to introduce new tokens.

Fundamental analysis of Uniswap token (UNI) on CoinMarketCap

Uniswap (UNI) is rank #10 on CoinMarketCap
Uniswap Price at the time of his research was $30.97 with a Market Cap of $18,191,047,498; a Volume of $480,515,232, and a Total Supply of 1,000,000,00.

Features of the Uniswap

• It is built on the Ethereum blockchain, which means it depends on Ethereum to function.
• It is a decentralized platform.
• The uniswap token is tradable.
• It operates on Exchange contract and the Factory contract.
• It operates using an automated protocol which solve the issues of liquidity.

Aim of the project

As a decentralized system, the uniswap platform aims at community growth and self sustainability.
It also solve liquidity issues by operating as an automated market maker.

Conclusion

It was indeed a wonderful lecture as I have come to understand tokens the more.
Thanks; Prof. @reminiscence01 for the lecture.

Cc:-
@reminiscence01