Decentralized Finance: How to decide between Crypto Token and Coin
Crypto token and crypto coin are sometimes used interchangeably but in actuality, they have some fundamental differences. More specifically, crypto token is a digital currency, whereas a crypto coin is a digital asset.
A crypto token is a unique digital code created and stored on blockchain infrastructure for use as a medium of exchange in transactions such as buying or selling goods and services, repayment of debts etc. It is issued on an existing blockchain network, and as such, depends on the underlying network’s framework
A crypto coin is its own blockchain network and has full control over its own issuance and circulation. Bitcoin (BTC) and Ethereum (ETH) are examples of crypto coins.
How is the price set?
The price of tokens is determined by market forces of demand and supply if the supply is finite. A token’s value can rise or fall depending on its popularity or utility in real life.
Most crypto tokens are developed to be used within ecosystems that require a certain amount of tokens to operate within them. This will increase their value as the utility behind the token is adopted.
How do the use-cases of coins and tokens differ?
The differences between the two can be found in their underlying technology. The crypto coin uses blockchain only, while the crypto token is built on top of an existing blockchain but also has its own features that are not available in most blockchains and tokens (for example, a shared ownership investment platform).
In UniLion, one of our core mission statements is to protect our community and reduce risk exposure from token price fluctuations. To ensure this, we have issued a finite number of tokens ($LION) and implemented price volatility protections via an anti-whale mechanism for further confidence.
Join us on our journey in implementing the Ultimate DeFi Shared Ownership model and defeat the whales.
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