Steemit Crypto Academy | Season 3 Week 8 || Homework Post for Professor @reminiscence01 || UNDERSTANDING TOKENS by @a-lass-wonders
It is my pleasure to join with crypto academy dynamic homework courses and I take this as an opportunity to give my gratitude to professor @reminiscence01 who has given excellent lectures regarding tokens in the world of cryptocurrency. Please accept this as my homework submission.
Entire Question👇
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)
2)What is the difference between a token and a coin?
3)Explain the different categories of tokens listed below and explain their features.
- Utility tokens
- Security tokens
- Equity tokens
- Non-fungible token (NFT)
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).
Tokens are digital assets which built upon blockchains. The token is a representation of something in a particular ecosystem.
Basically, they are virtual currencies that exist on top of another blockchain to operate. Coz, tokens do not dominate their own blockchain unlike coins do have their own blockchain or platform. Tokens are also used to trade, purchase, and investment purposes.
There are lots of tokens that can be found on the website of https://coinmarketcap.com/ which requires different operating platforms.
EXAMPLE:
Coins and tokens both are digital assets built within blockchain but with many differences.
01) Utility token
There are many services that are offering by the blockchain and users who engage with the platform able to gain those services via exchanging and using this token.
With the anticipation of the project to obtain more profits, many crypto investors gain this token at the initial phase during ICO.
02) Security token
Security tokens act as an intermediary between cryptocurrency and conventional finance.
Similarly, these tokens are like digitized traditional stocks.
The owner of the token has a contract that is equal to owning shares among the ecosystem. It gives investment profits to the owner. Thereby owner is eligible to grant voting rights in the ecosystem as he/she owns a considerable fraction of shares.
03) Equity token
Equity tokens are like traditional assets same like security tokens. These tokens were created by most financial companies to denote a share in them.
Equity tokens offer the voting right to an investor. Thereby investors with equity tokens are eligible to make decisions in the underlying project.
At the same time, this token owner is able to obtain some amount of the company’s profit, as they owned a considerable share of company assets.
When dealing with these tokens, transactions have high transparency and transactions are inevitable.
04) Non Fungible token (NFT)
NFT are very unique cryptographic tokens and they appear digitally on a certain blockchain. Specialty is those unique characters are unable to interchange with others coz of their own value.
NFT holders have ownership rights and the value of NFT is higher compared to other tokens coz of its uniqueness.
NFT are comprised of uniqueness, transferable, inseparable and at the same time, they are able to reveal their insufficiency.
To answer this question, I’m using the Uniswap token.
Uniswap (UNI)
This is a decentralized platform built upon the Ethereum blockchain. The Ethereum blockchain developer created this platform in 2018. In previous Uniswap is called as Unipeg.
The native token of this is UNI that used to function via Ethereum blockchain since it is an ERC- 20 token. Uniswap yields fame coz of its automated trading of tokens which also settle problems of liquidity.
Uniswap builds upon diverse smart contracts. Initial premises of it,
It gives a new reward mechanism for those who engage in its services and Uniswap pools.
Grants on-chain governance system which is decentralized.
People who engaged with the project from the beginning are rewarded.
UNI token owns over one billion of total supply and currently, it is distributed as follows.
- 60% to users
- 21.51% to team members
- 17.8% to investors
- 0.69% to advisors
Uniswap has two major smart contracts.
The Exchange contract – for swapping of a token
The Factory contract - to introduce new tokens to the platform.
Basic analysis of Uniswap token using the website; https://coinmarketcap.com/
Uniswap rank is #11
CoinMarketCap Price of Uniswap was $29.01
Market Cap $17,258,287,618
This data was taken on 2021/08/21 at 8.45 pm from Sri Lanka time.
Features of Uniswap
Decentralized platform.
Tradable token.
Built upon Ethereum blockchain.
Solves the problems of liquidity.
Responsible to operate Exchange contracts and Factory contracts.
Aim of the project
It targets the self-sustainability and growth of the community since it is a decentralized platform.
It also helps to solve issues regarding liquidity.
Conclusion
This lecture proves the great and huge necessity to anybody who hopes to invest in cryptocurrency understanding about coins and tokens.
Again, I would like to offer my genuine gratitude to professor @reminiscence01 for delivering such a meaningful lecture.
GOOD LUCK AND HAVE A NICE DAY!!
- My achievement 01 post: here.
- My achievement 02 post: here.
- My achievement 03 post: here.
- My achievement 04 post: here.
Hello @a-lass-wonders, 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:
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