The Different Types of Tokens

As we talked about in our previous articles, tokenization allows people to make an asset digital as well as make it accessible and liquid.

But, what is the nature of these tokens?

A token is a value, an asset. A cryptocurrency which runs on blockchain and undergoes to the blockchain rules.

Why is it so accessible and liquid?

The blockchain technology allows you to make transactions through its “blocks” which register each exchange of value happening at this moment.

In theory, a block is created every 10 minutes on the Bitcoin Blockchain.. Most banks takes at least two working days to do a money transfer.

CURRENCY TOKEN

More commonly known as cryptocurrencies they are the most used tokens of the crypto world.

Bitcoin, Litecoin, Monero are examples of a classic cryptocurrencies.

They are classical units that can be transferred. They could be exchanged for goods and their value is determined by the ask and the offer of their market. Unlike common currencies like Euro and US Dollars, called FIAT currencies, they do not have a centralized entity which can “print” more units out of nothing to manipulate the price. These types of tokens represent outstanding debts and liabilities. They take their value from the debt, its interest and the creditworthiness of the debtor party.

UTILITY TOKEN

Think of a coupon. A coupon has a monetary value only for its determined environment, that could be a shop, a platform or other spots in which it could be exchanged. An example for this are iTunes or Amazon gift cards.

The coupon is useful in order to receive a particular good or service only in places that recognize it.

Utility tokens works similar. Most of times utility tokens are the “fuel” for that specific platform that assures a determined service. Think of Binance, that will make his “Binance Coin” token as utility for his environment.

Exactly as a coupon, Utility tokens don’t have a monetary value and would be deviant to speculate on its value.

These tokens are not related to the performance of the issuer company and are not made for speculation. Neither are they regulated by a financial institution, since they are not financial instruments.

SECURITY TOKENS

Security tokens are what the blockchain ecosystem is longing for a couple of years.

These tokens represent a traditional security and, as traditional securities, are regulated by financial institutions.

The regulation assures that the token is a financial instrument and ensure its correlation with parameters that can raise its value.

These tokens are what the blockchain ecosystem was searching from the last big bubble.

The security tokens give confidence to investors because their nature is validated by a financial institution and there is a small probability to occur in scams.

So, what is the TaoToken?

The TaoToken is a security token that assures you rights on the TaoDust’s dividends.

Thanks to our business model, the Tao Token owner will have rights on each company that has undertaken an equity crowdfunding campaign with the TaoDust platform.

How?

TaoDust ltd. will collect a percentage of the tokenized equity of each company in order to lower the entry barrier.

As a consequence, TaoDust has rights on the dividend of each crowdfunded company. In fact, the more successful companies we will have on our platform, the higher will be our investors return!

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