Token
A digital asset issued on an existing blockchain, representing value, ownership, or utility within a specific ecosystem.
A token is a digital asset created and managed by a smart contract on an existing blockchain — as opposed to a coin (like ETH or BTC), which is native to its own blockchain. Tokens inherit the security of their host chain and don't require building independent infrastructure.
ERC-20 is the dominant token standard on Ethereum and EVM-compatible chains. It defines a common interface that allows wallets, DEXs, and other protocols to interact with any compliant token without custom integration work.
Tokens serve many purposes: governance (voting rights in a DAO), utility (paying fees within a specific protocol), security (representing shares), or purely speculative. Understanding which category a token falls into is essential for evaluating its fundamental value.