Glossary · T
Token
A digital asset issued on an existing blockchain (as opposed to a coin, which is the native asset of its own blockchain). Tokens can represent governance rights (UNI, AAVE), staked positions (stETH), ownership shares (LP tokens), or almost any other value. Most DeFi tokens are ERC-20 tokens on Ethereum.
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How Token works in practice
A token is an asset issued on an existing chain rather than being that chain's native currency, following a standard interface so wallets and contracts can handle any of them uniformly.
Worked example
ETH is Ethereum's native asset; USDC is a token contract on Ethereum. Sending ETH updates a native balance, while sending USDC calls a contract that updates its own internal ledger.
Figures are illustrative and chosen to be checkable, not live market data.
The mistake that costs people money
Ticker symbols are not unique and anyone can deploy a token using any name. The contract address is the only identifier that means anything — always verify it from an official source.
Token: common questions
- What is Token?
- A digital asset issued on an existing blockchain (as opposed to a coin, which is the native asset of its own blockchain). Tokens can represent governance rights (UNI, AAVE), staked positions (stETH), ownership shares (LP tokens), or almost any other value. Most DeFi tokens are ERC-20 tokens on Ethereum.
- How does Token work in practice?
- A token is an asset issued on an existing chain rather than being that chain's native currency, following a standard interface so wallets and contracts can handle any of them uniformly.
- Can you give an example of Token?
- ETH is Ethereum's native asset; USDC is a token contract on Ethereum. Sending ETH updates a native balance, while sending USDC calls a contract that updates its own internal ledger.
- What do people get wrong about Token?
- Ticker symbols are not unique and anyone can deploy a token using any name. The contract address is the only identifier that means anything — always verify it from an official source.