*What is Crypto Token?
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Crypto tokens are units of digital value that are issued and managed on a blockchain network. They can represent any asset or utility, and can be used to: Record asset ownership, Create transparency, Exchange within a specific ecosystem, Represent assets such as real estate or stocks, Access a service or platform.

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- Payment tokens
A payment token is any digital representation of value that is expressed in units, is not denominated in any currency and is not linked to any currency by its issuer; acts as a medium of exchange; is accepted by society or part of society as payment for goods or services or to settle a debt; can be transmitted, stored or sold electronically; has other characteristics.

- Non Fungible Tokens (NFTs)
An NFT, or non-fungible token, is a certificate that proves that you own a unique object in the digital space. Non-fungible means unique and impossible to replace with another object. Each NFT contains a digital signature that makes the token unique, which exists in only one copy. All information about its author, buyer, and all transactions with it are securely stored on a blockchain.

- Stablecoins
Stablecoins are a form of price token whose price, in practice, ought to continue to be solid over time. These tokens are commonly backed by real belongings or funds (including short-term government bonds, fiat currencies, commodities, actual estate, and securities) or different crypto assets. They also can take the shape of algorithmic stablecoins (with a set of rules used to stabilize the volatility of the token’s value). While some of those stablecoins may additionally qualify as financial units or electronic cash according to some financial regulators , others may work beyond law and feature a distinct status.

- Decentralized Tokens (DeFi)
DeFi tokens are various digital currencies that are used on decentralized platforms to implement their functions and offerings and operate based on smart contracts. DeFi tokens are permissions for a user to access certain services of an application or an entire organization, also built on a blockchain. Good examples of this type of token are DeFi Coins or DeFi Yield.

- Utility Tokens
Companies issue digital assets called utility tokens to expand the ecosystems of their projects. Actually, the purpose of these tokens is to give users access to the company’s products. Investors that purchase a token for a specific project benefit from the company’s products. Purchasing an asset is a prerequisite for beginning to utilize the benefits of the project.

- Security Tokens
Digital counterparts of securities, security tokens verify ownership and grant the ability to engage in investment activities (profit shares, dividends, etc.). The tokens are exchanged on exchanges, and these rights are documented in a protocol. Security tokens adhere to the rules set forth by international financial regulatory organizations, such the Swiss Financial Market Supervisory Authority (FINMA) and the US Securities and Exchange Commission (SEC).

- Privacy Tokens
Privacy tokens are a class of cryptocurrencies that enforce private and anonymous blockchain transactions by hiding their origin and destination. To effectively maintain anonymity and intractability, privacy tokens use many strategies, the most popular of which are: stealth addresses, ring signatures, zk-SNARKs, or CoinJoin. Some methods include hiding the user’s real balance and wallet address and mixing multiple transactions to avoid blockchain analysis.

- Exchange tokens
Exchange tokens are digital instruments created by cryptocurrency exchanges for use within their financial infrastructure. Such tokens are used to maintain liquidity within the exchange and can be used to pay for various types of services, including transaction fees. One of the most famous examples of this type of token is the BNB token of the world’s largest cryptocurrency exchange, Binance.

- Governance tokens
Governance tokens are the cryptographic tokens used to represent voting on the blockchain, distributing decision-making power from a centralized entity to the entire community.For example, the famous savings protocol Compound troubles a COMP token to all customers. This token gives its owners a say in the process of modernizing Compound. Logically, it follows that the more COMP tokens the owner has, the more votes they will get.

- Wrapped Tokens
Wrapped tokens are a kind of virtual token whose rate is related to the price of any other digital foreign money at a 1:1 ratio. The principle behind wrapped tokens is that they “wrap” the original currency into a smart contract on their native network. Then, on the second blockchain, an equivalent of that currency is created, known as a “wrapped.” Wrapped tokens are useful when we move a currency created on one blockchain network to another and make transactions there.

Crypto Tokens vs. Cryptocurrencies: What’s the Difference?

There is a large distinction between a cryptocurrency and a token as cryptocurrencies contain their very own blockchain, whilst tokens are built on pinnacle of present blockchains. For instance, Bitcoin, Ethereum, and Litecoin are examples of currencies that have their personal ledger. Coins are used as a means of payment across independent blockchain networks and are used to make transactions. In turn, crypto tokens can be compared to securities or certificates of ownership. A crypto token is a digital representation of an ownership stake in a DAO, some digital commodity, or even a physical object (in the case of NFTs).

Tokens can be centralized or decentralized, depending on the structure of the project, which is another crucial distinction between them and cryptocurrencies. While decentralized tokens are managed by a distributed network, centralized ones are managed by a single entity.

Both tokens and coins are a vital part of cryptocurrency globally.. Tokens constitute belongings or utilities on a blockchain and are used for distinctive purposes. Coins, however, have their very own independent blockchain and function as a decentralized virtual currency. Understanding the distinction between these two terms is essential to effectively navigate the world of cryptocurrencies. Both tokens and coins have unique features and uses, but ultimately serve as innovative tools for value transfer and decentralized capital storage.

On the other hand, the process of issuing coins is gradual (the classic notion of mining is applied where the user contributes his computing power to open new blocks and develop the blockchain), while the creators of tokens issue the entire volume of coins at once, distributing them at will to perform certain tasks. The price of a token, like a cryptocurrency, depends on supply and demand, but not only on that. The price of this type of virtual asset can also vary depending on the conditions of the issue, which are of a different nature and determined by several factors.