Crypto glossary
Token (crypto token)
A crypto token is a digital asset issued by a smart contract on an existing blockchain, unlike a coin, which is the native currency of its own network.
A token is a unit of value recorded by a smart contract running on a blockchain such as Ethereum or Solana. The contract keeps track of who holds how many tokens and enforces the rules for transferring them. A coin, by contrast, is native to its blockchain and pays that network's fees: BTC on Bitcoin, ETH on Ethereum, SOL on Solana.
Because anyone can deploy a token contract, tokens represent a wide range of things: stablecoins, governance rights in a DAO, access to a service, shares of a liquidity pool, in-game items or tokenized real-world assets. Standards such as ERC-20 for fungible tokens and ERC-721 for NFTs let wallets and exchanges support new tokens without custom work.
In everyday use, coin and token are often used interchangeably. Creating a token is cheap and quick, which is why thousands of worthless or fraudulent ones appear, including copies that borrow the name of real projects. Checking the official contract address and what rights the token actually grants helps avoid fakes.
Example
USDC exists as a token on Ethereum, Solana and other networks; on Ethereum, sending it still requires paying the gas fee in ETH, the network's native coin.
Related terms
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