Steemit Crypto Academy Season 3 Week 8 (Beginner course)- Understanding Tokens by @swaylee

Introduction

Hello Steemians, I'm here today to present to you the 8th week of season 3 in the crypto academy. This is the last assignment for this season and also my first assignment in this community. I will be looking into tokens in the crypto world. Let's get right to it.

For the first question, we have

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

In terms of crypto currencies, tokens are digital assets or crypto currencies which are built on an already existing blockchain. Transactions in a blockchain are stored in such a way that they are linked across all the other networks on the blockchain making it nearly impossible to cheat or hack the system. This makes creating your own blockchain a rigorous and time consuming task so instead of making theirs, they are allowed to create their tokens on already existing blockchains. The tokens are distributed to the public/investors through an Initial Coin Offering. An ICO from what I understand are kind of like what happens when a business sells stocks to outsiders as a way of raising money for their business or something related but in this case they sell their tokens to investors inorder to raise money, people who buy said tokens are said to be investing in the company. Now we would be looking at some examples of tokens and the blockchain they are built on.
Some types of tokens include reward tokens, currency tokens, utility tokens, security tokens and asset tokens.

TOKENS	THE BLOCKCHAIN THEY ARE BUILT ON
1. Shiba Inu (SHIB)	Ethereum blockchain
2. BitTorrent (BTT)	Tron blockchain
3. TrueUSD	Ethereum blockchain
4. Telcoin	Ethereum blockchain
5. Uniswap	Ethereum blockchain
6. PancakeSwap	Binance smart chain (BSC)
7. JulSwap	Binance smart chain (BSC)

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

Talking from experience, alot of us both crypto literate and crypto illiterate myself included tend to just refer to everything as a coin, be it DeFi, be it tokens which is not proper, here I will be looking at the differences between coins and tokens in the cryptocurrency world.

TOKEN	COIN
1. Tokens gain attention and are used to raise money through ICOs	Coins gain attention through mining and are not used to raise money through ICOs instead they can serve as a means of payment during ICOs. eg some companies accept Ether and bitcoin as payment from investors during ICOs.
2. Tokens are dependent on another blockchain	Coins have their own independent blockchain eg Ethereum blockchain and Ether( it's native currency).
3. Tokens are easier to create owing to the fact that they have a blockchain which they can depend on	Coins are much more difficult to create because they have to create their own blockchain
4. Examples of tokens include julD, FTX token, OKB, Tether USD	Examples of coins include ripple (XRP), tron (TRX), Ether (ETH)
5. Since they are built on an existing blockchain, when one wants to send a token from one wallet to another, he would have to pay a little fee depending on the blockchain. Eg I was sending my julD from my token pocket to my trust wallet, I had to pay a little transaction fee in BNB.	When transferring a coin from one wallet to another, you just lose a fragment of the total amount being transferred due to transaction fees.

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

Utility tokens

As the name implies utility meaning getting satisfaction from a product or service. When funding a business, company or project funds would be needed so the company will try to raise funds so they issue utility tokens which investors buy at ICOs giving the investor some rights in the company's affairs. Utility tokens can also be used to purchase products and services from the company. Some examples of utility tokens include funfair, brick block, Basic Attention Token (BAT) etc

some features of utility tokens include

• They can be used to purchase goods and services in the future
• They are decentralized and are not monitored by the government

Security tokens

For easier understanding of these tokens, I will use an instance where a company issues shares or stocks to the public for interested investors to buy that way the investors get a say in the company's affairs while the company gets the needed funds but imagine instead of having to use stocks they use tokens. Security tokens are just like digital assets. Due to past scam events in ICOs, security tokens are sold to the public through STOs (Security token offerings) which make them more secure.

Some features of security tokens include

• Both government and businesses can issue them
• They are backed by law
• Once the are lost or stolen, there is nothing that can be done

Equity tokens

What alot of people don't know is that an equity token is a type of security token. They are similar to regular stocks but differ in the process of transferring ownership and recording transactions. A regular stock would be recorded on paper and a certificate would be given to the stock holder to show the stock he owns but in the case of equity token, they are recorded on every single system in the blockchain. An example of such token include the private elephant equity coin.

some features of equity tokens include

• They are sold through ICOs
• They give their holders voting rights in the company's affairs and a share the company's decision making process.

Non-fungible token

This particular token piqued my interest alot. These are digital assets that represent actual real life objects. Its really amazing. Imagine wanting to sell of an artwork, a song, a game skin even a tweet so you digitalize them and sell them once sold, the buyer has the right to do whatever they want with it since it's officially his. Non-fungible as the name implies meaning it can't be exchanged with another NFT of it's kind. Eg I can exchange one ripple for another ripple or exchanging 1 naira for 1 naira hence making them fungible but I can't exchange one NFT art for another art as they differ in value hence they are Non-fungible.

Some features of NFTs include

• They are usually created on the Ethereum blockchain
• The are created in a similar way to basic crypto currencies
• Once sold, the new buyer has rights over the token.

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).

Shiba Inu (SHIB)

Also known as the dogecoin killer. A meme token created off the concept of a breed of dogs named Shiba Inu. It is believed that a person named Ryoshi is behind the origin of the coin. It was created in August 2020 on the Ethereum blockchain. In July 2021, it launched it's own decentralized exchange where they trade SHIB, LEASH and BONE. On the ShibaSwap, we can DIG (provide liquidity), BURY (stake the tokens) and SWAP the tokens and get WOOF (where you claim your returns). Ryoshi is said to have given locked half of the SHIB in UniSwap and burned the remainder to Vitalik, one of the co-founders of ethereum. Vitalik also donated a percent of his SHIB to help those suffering from covid-19 in india so it's supply was greatly reduced.

From the above screenshot, you can see the 24h price fluctuations of the shiba token, it's circulating supply, it's market cap and it's total supply.

features of Shiba Inu

Some features of the above mentioned token include:-

• It was modelled after the Dogecoin
• It's mascot is a japanese dog of the japanese shiba inu breed
• It has its own decentralized exchange, "ShibaSwap"
• It is built on the Ethereum blockchain network
• It can be bought and sold on exchanges like binance and crypto.com.
• Unlike some other cryptocurrencies, SHIB was intentionally make abundant with a starting supply of over 1 quadrillion.

Aim of the project

• It encourages growth and creativity by making holders bring out the creative views of life in them. They also donate to save the shiba inu breed of dogs.
  They also make use of the NFT art incubator.

Conclusion

Thanks to this assignment I was able to correct alot of wrong terminologies I used for certain cryptocurrency terms. I was also able to broaden my knowledge of tokens and several related things. Who would have thought the world had developed to such an era. Thanks for giving this assignment @reminiscence01 I'm looking forward to more assignments and corrections from any errors I could have made in this assignment.