ᴛⷮoͦᴋⷦeͤn are issued via smart contracts with Initial Coin Offer (investments) and represent a value associated with a good, service or right. Some concepts to keep in mind are: 𝕝𝕚𝕢𝕦𝕚𝕕𝕚𝕥𝕪 (thanks to which they can be easily transformed into current currency or cryptocurrency), 𝕕𝕚𝕧𝕚𝕤𝕚𝕓𝕚𝕝𝕚𝕥𝕪 (allows the subdivision of the token / coin into fractions, i.e. submultiples), 𝕖𝕩𝕔𝕙𝕒𝕟𝕘𝕖𝕒𝕓𝕚𝕝𝕚𝕥𝕪 (allows for the purchase and sale of the subsequent transfer of ownership).
Thanks to smart contracts it is also possible to carry out automated events. Examples are payments that occur when certain conditions are met (for example, on a musical level, I get paid if my song reaches 10,000 plays).
Other financial instruments to be explained are:
-𝑪𝒖𝒓𝒓𝒆𝒏𝒄𝒚 (coin and token act as digital currency, the value of which is established by the market).
-𝑺𝒆𝒄𝒖𝒓𝒊𝒕𝒚 (represents the value of an underlying asset. The possession of a token does not imply a share owned by the "issuing" company).
-𝑬𝒒𝒖𝒊𝒕𝒚 (similar to the previous one but implies, for the owner, a share of ownership)
-𝑼𝒕𝒊𝒍𝒊𝒕𝒚 (coupons that can be spent within the ecosystem of a platform for the purchase of goods and services)
-𝑫𝒆𝒃𝒕 (tokens representing underlying debts, similar to bonds)
Thomas Euler classifies tokens into five dimensions.
The dimensions are complementary, since many tokens can fall into all these dimensions. For example, Ether is a native, hybrid network and also a cryptocurrency.
The classification currently clearer and more precise is that of the paper "To Token or not to Token: Tools for Understanding Blockchain Tokens", written by Luis Oliveira, Liudmila Zavolokina, Ingrid Bauer and Gerhard Schwabe:
-Cryptocurrencies (they are or aspire to become global digital currencies)
-Equity Token (gives the holder rights on capital gains, such as profit sharing)
-Funding Token (financing vehicle for the project team and the community, perceived as long-term investment)
-Consensus Token (guarantee data validation and consent in the blockchain)
-Work Token (compensation to users who complete certain actions or exhibit a certain behavior)
-Voting Token (confer voting rights on their owner)
-Asset Token (represent ownership of an asset)
-Payment Token (payment instruments within a platform / ecosystem)
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