Crypto Token
A digital asset built on an existing blockchain that represents ownership, utility, or governance rights.
What is Token?
A crypto token is a digital asset created on an existing blockchain network using smart contracts, as distinct from a coin, which is the native asset of its own blockchain (e.g., ETH on Ethereum, BTC on Bitcoin). Tokens are broadly categorized by function: utility tokens grant access to a product or service within a protocol; governance tokens give holders voting rights over protocol decisions; security tokens represent ownership of real-world assets such as equity or debt; and stablecoins are tokens pegged to a fiat currency such as the US dollar. Tokens can be fungible (interchangeable, like ERC-20 tokens) or non-fungible (unique, like ERC-721 NFTs). Because tokens piggyback on an existing blockchain's security and infrastructure, they can be created with relatively little technical overhead using token standards.
Example
UNI is the governance token of Uniswap, built as an ERC-20 token on Ethereum. UNI holders can vote on protocol proposals such as fee structures and treasury allocations. Despite being built on Ethereum, UNI is a token, not a coin — it depends on Ethereum for its underlying security and cannot exist independently.
Source: Uniswap Protocol Documentation