Everything you need to know about tokens

Token use cases:

Utility tokens are one of the most popular token use cases. Holders can access a blockchain-based product or service, including payments. Some compare utility tokens to vouchers or coupons. For example, it can be “exchanged” for access to decentralized applications (dApps) or for smart contracts to be executed on the blockchain. Utility tokens are the most common type of use case, since because most of the initial offerings that took place during the 2017 initial offering boom used utility tokens.

Types of tokens

Fungible tokens VS. Non-fungible tokens

You’ve probably seen the NFT abbreviation quite a lot. NFT stands for a non-fungible token. There are, of course, fungible ones too.

Token functions

A Token’s contract can include a range of useful functions for token holders. Here are just a few of them:

  • Burn — calling to remove tokens from circulation in a bid to reduce the supply;
  • Pause. This function allows the owner to temporarily prevent all kinds of transactions;
  • Reflection of tokens refers to a function that redistributes token tax/commission on transactions among holders, with the process financed by a percentage tax on any transaction in the native token;
  • Auto LP saves up a certain token commission on the contract. Once a predetermined amount has been achieved, tokens will be added to the liquidity pool automatically;
  • Mint — emission of new tokens;
  • Auto burn is a function that burns a percentage of every transaction automatically.

Token standards

The framework behind the issuance of tokens differs for all networks. As a result, developers created guidelines for how these tokens are supposed to function. They are used for creating new tokens by the rules set out by the blockchain.

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