Crypto-token

A crypto-token is a digital asset, usually based on blockchain technology, representing ownership, access, or utility. Unlike cryptocurrencies such as Bitcoin, crypto-tokens are designed for a broader range of applications, including representing shares in a company, access rights to a service, or even loyalty points. They're created through Initial Token Offerings (ITOs) and can be used to fund projects or traded on cryptocurrency exchanges. The value is often tied to the underlying project's success.

Crypto-token meaning with examples

• Many companies are issuing crypto-tokens to raise funds through ICOs, allowing investors to purchase tokens that grant them voting rights or access to future services. These tokens function like digital coupons and are then used to stimulate the growth of their business. If the business fails, then it becomes a worthless token.
• Decentralized finance (DeFi) platforms use crypto-tokens to represent ownership in liquidity pools and facilitate lending and borrowing activities. Users deposit their tokens in exchange for receiving rewards. They also use tokens in the governance model, so they can vote on different matters and the future of that specific project.
• Non-fungible tokens (NFTs) are a specific type of crypto-token representing unique digital assets such as art or collectibles. These unique tokens can be traded or bought on digital market places. This shows that crypto tokens are not just a tool for economic gain but can be artistic as well.
• Utility tokens grant users access to a specific service or product within a blockchain-based ecosystem. These tokens are generally a key component of a specific dApp or ecosystem of applications. These digital resources allow users to experience this service.