Key Points
- Ask Jon Cheney anything segment
- Rob Duffin co-founder of Mixtape on as a special guest for episode 2
- We discussed the origins of Mixtape and their upcoming token and what makes these tokens different from the rest
Types of Tokens
There are various kinds of tokens. And because tokens rely on programmable code, developers can customize and tweak this code to do an infinite amount of things. As a result, it can be difficult to categorize tokens, but most fall into a few notable groups
Governance tokens are one category. Owners of governance tokens can vote on decisions within various decentralized finance applications (dApps). The more tokens one owns, the more power their vote holds. A popular example of a governance token includes decentralized exchange Uniswap’s token (UNI). Voting topics can include fee prices, upgrades to the network, and reward quantities.
Most tokens fall in the category of utility tokens. There are a multitude of utility tokens that each have unique purposes. Chainlink (LINK) incorporates real-time data like traffic and weather into smart contracts. Arweave (AR) is a new, secure data storage solution that incentivizes users to store data for long periods of time. Users are rewarded with an AR token the longer they store data.
One of the most popular utility tokens are non-fungible tokens (NFTs). NFTs use smart contracts to prove ownership. Most use Ethereum, but other blockchains like Tezos (XTZ) and Solana (SOL) have expanded their NFT networks as well.
Perks of Tokenizing
Developers choose to tokenize for many reasons. First, it is simple and fast. By using tokens, a new blockchain doesn’t need to be created. Designing a blockchain is extremely tedious and demanding.
In addition, since tokens use another cryptocurrency’s blockchain they do not need to start with a small user base. Blockchains become more secure and reliable with more participants. Instead of trying to find new participants, tokens can utilize existing blockchains like Ethereum or Binance Smart Chain that have plenty of users.
Listen to the full webinar to get all the details