Hello dear students and professors. I deeply enjoy these classes as I've gained so much knowledge though I knew nothing of cryptocurrency before. Here is my homework post for Professor @reminiscence01.

Understanding Tokens by @rosita-nkefor

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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)

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A token as used in cryptocurrency can be defined, as a virtual or digital asset which is built on an already existing blockchain. It is used to fund the ecosystem of the project, perform services and govern the ecosystem.

Thus, tokens are not native to the blockchain they are using. Tokens came about because creating a new blockchain requires a lot of knowledge, resources, time and money.

• PixelTile token on the Cardano blockchain
• Wirex Token (WXT) on the Stellar blockchain
• CAKE on the Binance Smart Chain
• TRC-10 on the Tron blockchain
• Huobi Token on the Ethereum blockchain

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

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Though often used interchangeably, tokens are different from coins.Coins can be seen as the digital version of money. They are created in such a way that they store value over time just like real money. Meanwhile tokens are created to perform actions in the ecosystem of a project.
Differences between Tokens and Coins

Tokens	Coins
Tokens give access to services and also represent shares	Coins are just used as a method of payment
Tokens have a particular use in the project it was created for	Coins are used independently
Tokens are created daily so the supply is unlimited	Coins have a limited supply
You can buy tokens with coins	You cannot buy coins with tokens
You need a standard templatefrom a blockchain based platform that allows creation of new tokens to make a new token	You need to have a new code or modify an existing code just to create a new coin

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3) Explain the different categories token listed below and explain its features.

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a. Utility tokens: Utility tokens are those initial tokens issued to investors at the start of the project so as to fund the project. They are given out in exchange for other cryptocurrencies.

• They provide the holder with a stake in the project which is equivalent to the amount of tokens they hold.
• They give the holder theright to participate in the decision making of the ecosystem.
• They can be exchanged or swapped for other cryptocurrencies.
• They can also be used in the ecosystem as payment services.

b. Security tokens: Security tokens are like digital stocks.

• They allow investors who are holders to own some of the shares of the company.
• Security token holders have voting rights when it comes to the decision making.
• Holders of such tokens are able to receive dividends from all profits made by the company.

c. Equity tokens: These tokens are used to stand as a share in the company. That is, they are a way to calculate percentage of ownership.

• They give the holders voting rights in the decision making process.
• They also permit holders to receive dividends from the company's profits.

d. Non-fungible token (NFT)*: An NFT can be described as a unique digital asset. Non-fungible or unique in the sense that one NFT can never be the same as another NFT. It could represent videos, pictures, etc.

• It is unique and not interchangeable.
• It gives the holder proof of ownership without interfering with the copyright.

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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).

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CAKE Token

CAKE is a token built on the Binance Smart Chain. It was created as the governance token of PancakeSwap and is it's native token. PancakeSwap is a decentralized exchange where one can exchange BEP-20 tokens with ease.

CAKE is used solely on PancakeSwap. The project here can be seen as exchanging BEP-20 tokens and the ecosystem for this is PancakeSwap.

PancakeSwap is both an automated market maker and a decentralized application, that permits to earn fees for staking, lending and farming the tokens.

• It can be farmed by adding liquidity to the exchange pool.
• It is a deflationary token.
• It allows holders to buy tickets and partake in the lotteries.
• It gives it's holders the right to supervise the addition of new tokens pools into the protocol.
• It allows holders who stake the tokens to farm in other pools such as Syrup pools.

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Conclusion

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• Tokens are digital assets built on existing blockchains with specific functions to the project for which they were created.
• Tokens can be categorised into utility, security, equity, and non-fungible tokens.

I hope my post provided sufficient knowledge on the questions asked.

Thank you all for reading.